The Get-Rich Pitch, Then the Letdown

"Not all loans with YSPs are abusive, but because they are permitted and easy to hide, unscrupulous brokers can make excessive profits without adding value to borrowers," according to a report by the nonprofit Center for Responsible Lending.

Is it a coincidence that when Lee finds himself accused of operating outside the law, he is quick to begin operating under a different name?

I don't think so.

Lee began operating as Financial Independence Group shortly after the Georgia Department of Banking and Finance issued a series of final cease-and-desist orders for several of his Duluth-based mortgage loan businesses.

Over the years, he has operated as Debt Elimination Group, Debt Management Consultants and the Processing Center.

Six days after the Maryland Division of Financial Regulation ordered Lee and Financial Independence Group to stop all mortgage-related business in the state, a new company called CashFlo Strategies was registered in Delaware.

Lee's business is now operating as CashFlo Strategies, according to company documents I saw.

Questions also surround the way Lee deals with licensing of his members to originate loans in Maryland. The state's Department of Labor, Licensing and Regulation's Division of Financial Regulation Enforcement Unit had been investigating whether Lee and his associates were licensed to originate loans. Over the course of nine months, Lee originated and closed 42 loans in Maryland without a license, the state alleges. As a result, Lee and his business were ordered to cease and desist from engaging in the business of mortgage lending in Maryland.

Investigators found that a dilapidated building in Baltimore was the business address that members listed on their license applications.

"It was a small single-family house in total disrepair," said Stephen Prozeralik, director of enforcement for Maryland's financial regulation division. "From the outside you would think it was an abandoned building."

Salespeople living in Maryland who applied for originator licenses claimed they would be working from Florida for 1st Continental Mortgage, a lender in Fort Lauderdale, Fla., investigators said the applications indicated.

When Maryland investigators contacted 1st Continental's president, Raymond L. Moatz III, he claimed he was not aware that a contract he signed with Lee meant that members of Financial Independence Group would be representing themselves as employees of his company to get licensed in the state. Moatz did not return my telephone calls for comment.