COMMONWEALTH OF MASSACHUSETTS COMPLAINT INTRODUCTION. 1. The Commonwealth of Massachusetts, by and through its Attorney General,

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1 COMMONWEALTH OF MASSACHUSETTS SUFFOLK COUNTY COMMONWEALTH OF MASSACHUSETTS Plaintiff, v. SUPERIOR COURT Civil Action No PINNACLE FINANCIAL CONSULTING, LLC, f/k/a PINNACLE FINANCIAL AND LEGAL SOLUTIONS, LLC a Massachusetts limited liability company; and ROBERT BURTON, an individual, Defendants, MAR SI PRIOR COURT-CIVIL MICHAEL JOSEPH DONOVAN OLERK/mASIS IRArr CITIBANK, N.A., Trustee-Defendant. COMPLAINT INTRODUCTION 1. The Commonwealth of Massachusetts, by and through its Attorney General, Martha Coakley, brings this action against defendants Pinnacle Financial Consulting, LLC ("Pinnacle") and Robert Burton ("Burton") (collectively "Defendants"), for engaging in unfair or deceptive acts and practices in connection with their charging of advance fees and providing dozens of Massachusetts consumers purported mortgage loan modification services, bankruptcy petition preparation services, and fmancial and investment advice. The Commonwealth is seeking preliminary and peimanent injunctive relief, restitution, penalties, costs, attorney's fees, and other appropriate relief pursuant to the Massachusetts Consumer Protection Act, G.L. c. 93A, 2 and 4.

2 2. With their loan modification and bankruptcy petition preparation services, Defendants have sought to capitalize on the foreclosure and economic crisis by preying upon homeowners who are facing the imminent loss of their homes. Defendants target distressed homeowners in Massachusetts who are often minority and/or non-native English speakers, and falsely represent that Defendants can negotiate loan modifications which will dramatically improve homeowners finances and/or otherwise save their homes from foreclosure. 3. After receiving advance payment, Defendants often fail to take any action to negotiate a modification, or are otherwise unable to successfully negotiate any modification to the homeowner s mortgage loan. When their loan modification efforts fail, sometimes just days before the distressed homeowner's home is scheduled to be sold at foreclosure, Defendants pressure distressed homeowners into paying Defendants thousands of dollars to file bankruptcy on their behalf in order to delay the foreclosure sale. Defendants' bankruptcy filings on behalf of consumers are often incomplete or consist of erroneous paperwork, ultimately resulting in the dismissal of the bankruptcy proceedings. Further, Defendants refuse to refund any fees despite having failed to provide any tangible benefit to homeowners. 4. Defendants are not licensed to practice law in Massachusetts. Nevertheless, Defendants falsely represent to homeowners that they provide the same legal services as licensed attorneys and law firms, but at a fraction of the cost. For their services, Defendants solicit and receive unlawful advance fees for loan modifications in violation of 940 C.M.R (2), and unlawful and excessive fees for the preparation of bankruptcy petitions. 5. Regarding their financial and investment advice, Defendants solicit funds from consumers and promise to invest the funds on their behalf in private placement, or non-public investment offerings, and promise great returns in a short period of time. After receiving 2

3 consumers' investment funds, however, Defendants fail to invest the monies as promised, and instead use the funds for their own benefit. Even after repeated demands, Defendants fail and refuse to return the funds to consumers. 6. Defendants conduct is unfair or deceptive and violates the Massachusetts Consumer Protection Act, G.L. c. 93A, 2 and 4; and Attorney General Regulations relating to Foreclosure Rescue Transactions and Foreclosure-Related Services, 940 C.M.R and JURISDICTION AND VENUE 7. The Attorney General is authorized to bring this action pursuant to G.L. c. 12, 10 and G.L. c. 93A, This Court has jurisdiction over the subject matter of this action pursuant to G.L. c. 12, 10, and G.L. c. 93A, 4 and personal jurisdiction over Defendant pursuant to G.L. c. 223A, 2 and Venue is proper in Suffolk County pursuant to G.L. c. 223, 5 and G.L. c. 93A, 4. PARTIES 10. The Plaintiff is the Commonwealth of Massachusetts, represented by Attorney General Martha Coakley, who brings this action in the public interest. 11. Defendant Robert Burton is a natural person who resides in Massachusetts, and is an officer and/or managing agent of Pinnacle Financial Consulting, LLC ("Burton"). Burton was also the officer and/or managing agent of two, now defunct, financial and investment planning businesses Pinnacle Strategic Investments, LLC, and The Pinnacle Asset and Capital Management Group, LLC. Pinnacle Strategic Investments, LLC, was organized on or about 3

4 April 30, 2008, and is listed on the Secretary of the Commonwealth's website as having been involuntarily dissolved by court order or by the Secretary of the Commonwealth on April 19, The Pinnacle Asset and Capital Management Group, LLC, was organized on or about September 20, 2004, and is listed on the Secretary of the Commonwealth's website as having been involuntarily dissolved by court order or by the Secretary of the Commonwealth on April 30, Defendant Pinnacle Financial Consulting, LLC, f/k/a Pinnacle Financial and Legal Solutions, LLC, is a Limited Liability Company organized and existing under the laws of the Commonwealth of Massachusetts ("Pinnacle"). Pinnacle's principal place of business is located at 170 Common Street, Lawrence, Massachusetts, Trustee Process defendant Citibank, N.A. is a banking institution with a principal place of business in New York, New York. One or more defendants, including Pinnacle Financial Consulting, LLC, maintain bank accounts at Citibank, N.A. The Commonwealth therefore requests that a Summons for Trustee Process issue against Citibank, N.A. pursuant to Mass. R. Civ. P. 4.2 as to all Defendants. FACTS A. Regulations to Prevent Unscrupulous Actors From Profiting From The Foreclosure Crisis. 14. During 2007, as the foreclosure crisis began to spread across Massachusetts and the nation, the Attorney General s Office saw an increase in unfair or deceptive conduct aimed at homeowners desperate to save their homes from foreclosure. Unscrupulous parties increasingly disseminated unfair or deceptive solicitations for the provision of foreclosure-related services. Some preyed upon homeowners by enticing them into unfair or deceptive foreclosure rescue transactions typically offering replacement financing or creative transactions to save the 4

5 home from foreclosure, but then misleading the homeowner into permanently transferring title to the rescuer or a third party. Others sought to obtain significant upfront fees, purportedly to assist homeowners in applying for loan modifications or refinancing, but failed to deliver on such promises of assistance. 15. To address these predatory practices, the Attorney General issued emergency regulations 940 C.M.R : Foreclosure Rescue Transactions and Foreclosure-Related Services which became final in August The regulations prohibit certain unfair or deceptive acts, including: offering or carrying out predatory, for-profit Foreclosure Rescue Transactions (940 C.M.R (1)); soliciting or accepting an advance fee in connection with offering, arranging, or providing Foreclosure-Related Services (940 C.M.R (2)); and advertising Foreclosure-Related Services without clearly and conspicuously disclosing the precise services offered by the promoter and how the promoter will assist persons to avoid foreclosure (940 C.M.R (c)). 16. Foreclosure-Related Services are defined as any goods or services related to, or promising assistance in connection with: (a) avoiding or delaying actual or anticipated foreclosure proceedings concerning residential property; or (b) curing or otherwise addressing a default or failure to timely pay, with respect to a residential mortgage loan obligation. 940 C.M.R In 2010, the Federal Trade Commission also issued regulations relating to mortgage relief services prohibiting, among other things, the solicitation and receipt of advance fees for loan modifications. See 12 C.F.R. 1015, et seq. 5

6 B. Defendants' Solicitation, Marketing And Performance Of Loan Modification And Bankruptcy Petition Preparation Services Is Unfair Or Deceptive In Violation Of G.L. c. 93A 2 and 4, And 940 C.M.R et seq. 17. Since at least 2007, Defendants have purported to provide consumers with a variety of services including bankruptcy petition preparation, and foreclosure related services whereby Defendants promise to help consumers avoid or delay foreclosure proceedings concerning residential property or otherwise address the default or failure to timely pay a residential mortgage loan obligation. 18. Often targeting minority and non-native English speaking consumers, Defendants actively seek out distressed homeowners who are facing imminent foreclosure of their homes and promise to help find "alternatives" to foreclosure. Affidavit of John Blais ( Blais Affid. ), 3-8, Ex. A (Bates 0011); Affidavit of William Mackay ("Mackay Affid."), 2-3, Ex. A (Bates 0008), Ex. B (Bates 0015). Defendants likely identify distressed homeowners from public records, including foreclosure notices published in local newspapers and periodicals. After identifying homeowners who are behind in their mortgage payments, Defendants make contact with the homeowners via telephone or in-person visits offering to help the homeowners save their homes from foreclosure. Affidavit of Patrick Verderico ("Verderico Affid."), 6. In their communications with homeowners, Defendants often direct homeowners to print and internet advertisements, including purported testimonials from past clients, that tout Defendants' specialized skill and ability to negotiate favorable loan modification terms on behalf of delinquent borrowers. Blais Affid., 8, Ex. A (Bates ); Mackay Affid. 2-3, Exs. A-B. 19. The U.S. Bankruptcy Trustee of Region 1, District of Massachusetts, has identified, and the Commonwealth is aware of, 107 bankruptcy cases initiated by Defendants, at least 27 of which had fundamental defects in the documents Defendants prepared and filed. 6

7 Mackay Affid. 8. Currently, the U.S. Trustee initiated disgorgement proceedings against Defendants for violation of 11 U.S.C. 110, the U.S. Bankruptcy Code section governing bankruptcy petition preparers ("the U.S. Trustee Action") in eight of these identified cases. The U.S. Trustee Action cases are as follows: In re Rosario, Case No HJB; Harrington v. Burton, Adv. Proc. No ; In re Lopez, Case No HJB; In re Lacroix, Case No HJB; In re Javier, Case No MSH; In re Moya, Case No HJB; In re Morillo, Case No HJB; and In re Morin, Case No MSH. Defendants have provided bankruptcy petition preparation and loan modification services to numerous other Massachusetts consumers. 1. Defendants Advertising Is False And Misleading 20. Through their advertisements, Defendants falsely represent that they are able to obtain dramatic reductions in homeowners mortgage payments by referring to examples of modifications Defendants purportedly obtained in the past. For example, in text captions for client testimonial videos posted by Defendants on YouTube 2, Defendants state the following: a. He couldn't be happier with the result of his Loan Modification. His payment dropped from $1450 to $950. Another great job by our loan modification team!!! b. After only a few months into the Loan Modification process. Her monthly House payment decreased from $2000 to $900 including taxes and insurance. A fantastic job once again by our Loan Modification team! c. After a longer then usual Modification process. Her new house payment is now only $1033. Lowered from an unaffordable $2600. An incredible job done by our Loan Modification Team!!! d. Moments after signing the permanent documents finalizing their Loan Modification. Their house payment went from $2900 to $1600. WOW!!! 2 (February 12, 2013). 7

8 e. Her mortagage payment was cut in half using the Loan Modification process. Visit f. He was not behind on his payments and was still approved for a Loan Modification cutting his mortgage payment in half!!! Visit us at Mackay Affid., 4-5, Ex. C (Bates ). 21. Likewise, during face-to-face consultations with homeowners, Defendants made both express and implied guarantees that Defendants could obtain dramatic reductions in mortgage payments for homeowners. Blais Affid. 6; Affidavit of Patrick Verderico ("Verderico Affid.") 8-11; Affidavit of Kimberley Morin ("Morin Affid.") 3-7, 14, Ex. A (Bates 0014). 22. In fact, Defendants failed to obtain loan modifications and/or failed to obtain modifications with the terms Defendants promised to obtain for the homeowners. Blais Affid ; Verderico Affid. 8-11; Morin Affid. 20, Defendants Misrepresent That Burton Is A Licensed Lawyer In Massachusetts, And That Pinnacle Is A Law Firm 23. Defendants are not licensed to practice law in the Commonwealth of Massachusetts. Nevertheless, Defendants represent to consumers during in-person communications that they are attorneys authorized to provide legal advice and services when, in fact, they are not. Verderico Affid. 8; Morin Affid. 3, 9, 15; Blais Affid. 4; Affidavit of Sean Hannan ("Hannan Affid."), Furthermore, Defendants falsely represent that they provide consumers with legal services and advice equivalent to what is offered by law firms, but at a fraction of the cost. For example, on Pinnacle's website ( (February 12, 2013)), Defendants state: 8

9 Helpful and Affordable Services You'll find that we charge much less than law firms and you receive the same high-quality home loan modification and tax strategy services. We pride ourselves on achieving positive results. That's why we work so hard on your behalf. Mackay Affid., 3, Ex. B (Bates 0013). 25. Defendants further deceive consumers into believing that Defendants provide legal services and advice by referring to Burton as "Robert Burton, J.D., CWM," and emphasizing that Burton attended law school. Defendants' website provides a description of Burton's credentials, including that Burton worked at the well-known law firm, Foley Hoag. Meet our CEO Robert Burton is the chief executive officer of Pinnacle Financial Consulting, LLC. He is a graduate of Stony Brook University where he earned his Bachelor of Arts in Political Science in Robert worked at 2 prominent Wall Street firms before starting law school in He is a 2005 graduate of the Massachusetts School of Law at Andover. After law school, Robert worked for Foley Hoag LLP, a law firm in Boston, and Deutsche Bank, the fifth largest investment bank in the world. Robert currently holds the Chartered Wealth Manager designation and is pursuing his Chartered Financial Consultant designation. Mackay Affid., 2, Ex. A (Bates 0011) At all times relevant to the Complaint, Defendants failed to disclose on their website the material fact that Burton is not licensed to practice law in the state of Massachusetts. 3. Defendants Misrepresent Their Loan Modification And Bankruptcy Preparation Services 26. During the loan modification process, Burton and Pinnacle made numerous misrepresentations to consumers and failed to deliver the promised services, including: 9

10 a. Leading consumers to believe they had a very good chance at obtaining loan modifications; (Blais Affid. 6; Verderico Affid. 6-11; Morin Affid. 3-7, 14, Ex. A (Bates 0014)); b. Promising to obtain significant reductions in consumers' monthly mortgage payments; (Blais Affid. 6; Verderico Affid. 10); c. Leading consumers to believe they needed to become delinquent on their mortgage payments to obtain favorable loan modifications; (Verderico Affid. 9; Morin Affid. 12); d. Making "money back guarantees" that they failed to honor; (Verderico Affid. 6, 10, 11, 12, 17-19, Ex. A); e. Falsely representing to have refunded loan modification fees to consumers and even providing fraudulent copies of checks they claimed to have sent when they never actually issued any checks; (Verderico Affid , Ex. D); f. Failing to provide consistent and thorough updates to consumers regarding the status of their loan modification and bankruptcy cases after promising to do so; (Verderico Affid ; Morin Affid. 36); g. Providing false updates regarding the progress of consumers' loan modification and bankruptcy proceedings; (Blais Affid ; Morin Affid ); h. Misrepresenting to consumers certain work had been completed for their loan modifications when, in fact, the work had not been completed; (Blais Affid. 9-14; Morin Affid ;) i. Informing consumers their loan modifications were pending when, in fact, they had already been denied; (Morin Affid ); and 10

11 j. Pressuring consumers into hiring Defendants to prepare and file bankruptcy pleadings after their loan modifications failed; (Morin Affid ); k. Leading consumers to believe that Defendants were authorized by law to prepare and file bankruptcy paperwork on their behalf without the consumers' input; (Morin Affid. 15, 33). 27. Defendants harmed consumers by inducing people who were already in vulnerable and fragile financial situations, to pay monies for services that Defendants could not and/or were not authorized to provide. Morin Affid. 37; Blais Affid Defendants caused consumers' financial situations to worsen, sometimes advising consumers to wait until days before their homes were sold at foreclosure, in order to induce consumers to hire Defendants to initiate bankruptcy cases on their behalf. Morin Affid Furthermore, in instances where Defendants advised consumers to become delinquent in their mortgage payments, Defendants caused consumers to incur attorneys' fees, costs and late fees associated with foreclosure proceedings that consumers may not otherwise have incurred. Verderico Affid. 16, Ex. C (Bates 17-19); Morin Affid Defendants Solicit Unlawful Advance Fees 28. Defendants routinely solicit and receive unlawful advance fees from consumers, ranging from hundreds to thousands of dollars, prior to completing any services. Where consumers express an inability to pay the entire fee up front, Defendants require that consumers pay the fee in monthly installments of $500, with the first installment due at or immediately after Defendants' initial consultation, but before Defendants have completed any services. Blais Affid. 7, 8, Ex. A (Bates 0009); Verderico Affid. 12, Ex. A (Bates 0010); Morin Affid , Ex. C (Bates ). 11

12 29. In pleadings filed in the U.S. Bankruptcy Court, Defendants admit to soliciting and receiving advance fees from at least two sets of consumers, the Rosarios and Morins. 7. During the May 10, 2011 meeting at Pinnacle, the Rosarios were told about the loan modification process and the services which Pinnacle could offer. The parties also discussed Pinnacle's fee for the loan modification services: $2,000 total, payable in four monthly installments of $500 each. The Rosarios agreed to retain Pinnacle for the loan modification services and made a $500 payment on the $2,000 total fee. (Exhibit B) (Emphasis added.) Mackay Affid. 6, Ex. D, Robert Burton and Pinnacle Financial Consulting LLC's Response to United States Trustee's Motion to Disgorge Compensation (Bankr. D. Mass., Case No HJB) (Bates ). 6. Mr. Burton and Pinnacle previously provided loan modification assistance services to Ms. Morin under a separate written agreement, for a total fee of $2,500. The loan modification services were separate and distinct from the subsequent bankruptcy petition preparation services provided to Ms. Morin by Mr. Burton and Pinnacle. (Emphasis added.) Mackay Affid. 7, Ex. E, Robert Burton and Pinnacle Financial Consulting LLC's Response to Amended Motion of the United States Trustee for Order Directing Disgorgement of Fees (Bankr. D. Mass., Case No MSH) (Bates 0106). 30. Defendants required the payment of advance fees as a condition to beginning any loan modification work on behalf of consumers. Verderico Affid , Exs. A and B; Blais Affid., 7; Morin Affid. 11, 17-18, Ex. C. The payments were not contingent upon Defendants' successfully obtaining a loan modification on behalf of the consumers. In fact, when consumers demanded refunds after failing to receive loan modifications, Defendants refused to provide any refunds, sometimes falsely stating that they never guaranteed a favorable outcome. Blais Affid

13 31. The Attorney General regulations prohibiting the solicitation and receipt of advance fees for Foreclosure-Related Services contain a narrow exception for attorneys licensed to practice law within Massachusetts. See 940 C.M.R (2). At all times relevant to the Complaint, Defendants were not licensed to practice law in Massachusetts. C. Defendants' Solicitation, Marketing And Performance Of Investment Services Is Unfair Or Deceptive In Violation Of G.L. c. 93A, 2 And Defendants purported to offer financial and investment advising services through several entities, including Defendant Pinnacle Financial Consulting, LLC, and defunct entities such as Pinnacle Strategic Investments, LLC, and The Pinnacle Asset and Capital Management Group, LLC. Defendants intermingled the assets of all such entities, including depositing funds payable to one entity into the bank accounts of another entity, and issuing checks from one entity to cover the obligations of another entity. Hannan Affid., 9, 14, Exs. D, G. 33. Defendants solicited funds from consumers under the false pretense that they would invest the funds on the consumers' behalf. After receiving consumers' investment funds, however, Defendants failed to invest the monies as promised and misappropriated the funds for their own use. 34. In one case, Ariel Castillo, an active duty Army chaplain, gave $25,000 to Defendants to invest on his behalf in While Defendants represented to Mr. Castillo that they would invest his money in a diversified portfolio of publicly traded securities, Defendants did not do so and misappropriated Mr. Castillo's funds for their own use. From 2007 to 2012, Defendants continued to represent to Mr. Castillo that they were investing his money in his best interests. It was not until 2012, after Mr. Castillo returned from an overseas deployment and Defendants refused to return his investment money, that he discovered Defendants misappropriated his funds. Affidavit of Ariel Castillo ("Castillo Affid."),

14 35. In another case, Defendants promised to double the money of Burton's neighbor, Sean Hannan, over 30 days through a private placement, or non-public investment offerings. Defendants failed to double the investment principal, as promised, and returned only $5,500 of the $40,000 they received from Mr. Hannan despite repeated demands. Hannon Affid CAUSES OF ACTION COUNT I Unfair or Deceptive Acts or Practices in Violation of G.L. c. 93A, 2 and 4: Unfair Or Deceptive Solicitation, Marketing Or Performance Of Loan Modification And Bankruptcy Petition Preparation Services (Against all Defendants) 36. The allegations contained in paragraphs 1 through 35 of the Complaint are hereby re-alleged and incorporated by reference herein. 37. Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4 by: a. Making misleading, unfair or deceptive statements via print, internet and inperson communications to homeowners, including and without limitation, statements that: i. Falsely representing that positive results are likely or practically guaranteed; ii. Falsely representing that homeowners are unlikely to obtain a modification without the assistance of sophisticated financial or legal professionals, like Defendants; iii. Falsely representing that Defendants will provide legal services to homeowners when in fact Defendants are legally prohibited from providing legal services; or 14

15 iv. Misrepresenting the amount of work, or nature or character of the work Defendants performed for a homeowner; v. Falsely representing that homeowners will receive loan modifications when, in fact, Defendants have not begun the process, have unnecessarily delayed the process, or have already received notice that the modification request was rejected; vi. Falsely representing that consumers should ignore foreclosure notices or other communications from mortgage lenders; vii. Pressuring consumers into hiring Defendants to prepare bankruptcy pleadings and file bankruptcy on their behalf after a loan modification attempt fails; viii. Falsely representing that consumers needed to become delinquent on their mortgage payments to obtain favorable loan modifications; ix. Falsely representing that Defendants would refund all of the fees paid by a consumer in the event that they were unable to successfully obtain a loan modification; x. Misrepresenting that Defendants refunded loan modification fees to consumers when they had not; and b. Subjecting homeowners to harassment or intimidation when homeowners seek a refund or inquire or complain regarding Defendants services. 38. Defendants knew or should have known that, by making misleading, or false statements via print, internet and in-person communications to homeowners in connection with 15

16 Defendants' loan modification and bankruptcy petition preparation services, Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4. COUNT II Unfair Or Deceptive Acts Or Practices in Violation of G.L. c. 93A, 2 and 4: Soliciting And Receiving Unlawful Advance Fees For Loan Modification Services In violation Of 940 C.M.R (Against all Defendants) 39. The allegations contained in paragraphs 1 through 35 of the Complaint are hereby re-alleged and incorporated by reference herein. 40. Defendants solicited, arranged, or accepted advance fees in connection with offering, arranging or providing Foreclosure-Related Services, as that term is defined in 940 C.M.R , and were not licensed to practice law in the Commonwealth. 41. Defendants knew or should have known that, by soliciting, arranging or accepting advance fees in connection with offering, arranging or providing Foreclosure-Related Services, as that term is defined in 940 C.M.R , Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4, and 940 C.M.R , et seq. COUNT III Unfair or Deceptive Acts or Practices in Violation of G.L. c. 93A, 2 and 4: Unauthorized Practice of Law (Against all Defendants) 42. The allegations contained in paragraphs 1 through 35 of the Complaint are hereby re-alleged and incorporated by reference herein. 43. Defendants are not licensed to practice law in the state of Massachusetts. 44. Defendants engaged in the unauthorized practice of law by, among other things: a. Providing legal advice; b. Preparing and filing court pleadings and other documents on behalf of clients; and 16

17 c. Representing themselves to be licensed to practice law when they are not. 45. Defendants knew or should have known that, by engaging in the unauthorized practice of law, Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4. COUNT IV Unfair Or Deceptive Acts Or Practices In Violation of G.L. c. 93A, 2 and 4: Unfair Or Deceptive Solicitation, Marketing, And Performance Of Financial And Investment Advising Services (Against all Defendants) 46. The allegations contained in paragraphs 1 through 35 of the Complaint are hereby re-alleged and incorporated by reference herein. 47. Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4, by: a. Soliciting and receiving funds from consumers under the false pretense that Defendants would invest the funds on the consumers' behalf and in the consumer's best interest; b. Failing to invest monies from consumers as promised; c. Operating under the names of defunct businesses, such as Pinnacle Strategic Investments, LLC, and The Pinnacle Asset and Capital Management Group, LLC; d. Falsely stating that positive results are likely or practically guaranteed; e. Providing misleading or false updates regarding the status of consumers' investments; f. Failing and refusing to provide true and accurate account statements or other periodic reports regarding consumers' investments; and g. Failing and refusing to return consumers' investment funds at consumers' request. 17

18 48. Defendants knew or should have known that, by making misleading or false statements to consumers and converting consumers' funds for Defendants' personal use, Defendants engaged in unfair or deceptive acts or practices, in violation of G.L. c. 93A, 2 and 4. PRAYERS FOR RELIEF WHEREFORE, the Commonwealth requests that this Court enter the following relief: 1. Issue an ex parte Summons and Temporary Restraining Order: a. Enjoining Defendants Robert Burton and Pinnacle Financial Consulting, LLC, and their officers, agents, servants, employees, attorneys, successors and assigns, and all other persons and entities, whether acting individually or in active participation or concert with them, directly or indirectly, through any corporation, trust or other device, who receive actual notice of this Order from: i. Destroying directly or indirectly (including engaging others to act on Defendants behalf) any documents, computers, computerized files, storage media on which information is stored or saved, contracts, bills, invoices, or receipts for services rendered, correspondence (including electronic correspondence), advertisements, web-pages, customer lists, financial records, and any other documents or records of any kind that relate in any way to any aspect of their business, including without limitation, the advertising, marketing, soliciting, and/or provision of Foreclosure-Related Services, as defined in 940 C.M.R ; bankruptcy petition preparation services; legal advice or services; and financial and investment advising services. 18

19 ii. Transferring, dissipating, pledging, selling, mortgaging, encumbering, concealing, or in any way disposing of ownership or custody of any real or personal assets or funds which Defendants own or control, individually or collectively, or may own or control while the injunction remains in effect, including but not limited to: all real property, wherever located; all personalty, wherever located; all household and office furnishings; all investment and bank accounts, and all funds contained therein, wherever located; all securities; and all lump-sums of money, of any amount, Defendants have, or may receive while the injunction remains in effect, from any source; 2. Issue an ex parte Summons for Trustee Process to the Trustee Defendant, to ensure that any money or other assets of any of the Defendants held by the Trustee Defendant be attached and secured up to $95, and further requiring the Trustee Defendant to restrict any expenditure from the Defendants accounts consistent with the Summons. The Commonwealth reserves the right to seek additional amounts in restitution and penalties according to proof; 3. Approve of an ex parte general real estate attachment as to of all right, title and interest in any real estate owned by Defendants in the Commonwealth in the amount of $95,444.99, or such other amount as is approved by the court; 4. Issue a short order of notice to the Defendants requiring them to show cause why a preliminary injunction should not issue in accordance with Prayer 5. 19

20 5. After a hearing on the merits, and pursuant to G. L. c. 93A, 4, issue a preliminary injunction incorporating and extending the terms of the temporary restraining order and, further, ordering: a. Defendants Robert Burton, and Pinnacle Financial Consulting, LLC, and their officers, agents, servants, employees, attorneys, successors and assigns, and all other persons and entities, whether acting individually or in active participation or concert with them, directly or indirectly, through any corporation, trust or other device, are enjoined from: i. Advertising, marketing, soliciting, receiving fees in relation to, and/or providing any loan modification services in Massachusetts, including without limitation, Foreclosure-Related Services, as defined in 940 C.M.R to include any service, plan, or program, offered or provided to assist or attempt to assist the consumer with any goods or services related to, or promising assistance in connection with (a) avoiding or delaying actual or anticipated foreclosure proceedings concerning residential property; or (b) curing or otherwise addressing a default or failure to timely pay, with respect to a residential mortgage loan obligation; ii. Advertising, marketing, soliciting, receiving fees in relation to, and/or providing any bankruptcy petition preparation services in Massachusetts, including without limitation, any service, plan, or program, offered or provided to assist or attempt to assist the consumer with any document 20

21 prepared for filing in a United States bankruptcy court or a United States district court in connection with a bankruptcy case; iii. Advertising, marketing, soliciting, receiving fees in relation to, and/or providing any legal advice or services in Massachusetts, including without limitation, representing themselves to be attorneys or counselors at law; representing themselves to be lawfully qualified to practice in the courts of the Commonwealth; representing that they provide equivalent advice or services as licensed attorneys and/or law firms; and/or providing assistance to consumers concerning preparation of any document for filing in any court in the Commonwealth; iv. Advertising, marketing, soliciting, receiving fees in relation to, and/or providing any financial and investment advising services for compensation, including without limitation, effecting or attempting to effect purchases or sales in securities for the account of others; and advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or any other investment product; 6. After a trial on the merits issue a permanent injunction with substantially the same terms as those set forth in paragraph 5(a)(i)-(iv); 21

22 , at the Defendants pay restitution to any and all consumers who have been injured 7 Order u, by any acts or practices found to have violated G.L. c. 93A, 2 and 4, including those known to the Attorney General and those yet to be determined; 8. Order that the Defendants pay the costs of investigation and litigation of this matter, including the Commonwealth's reasonable attorney's fees; 9. Order that the Defendants pay civil penalties for each violation of G.L. c. 93A, 2 and 4; and 10. Order such other and further relief as this Court deems just and proper. Respectfully submitted, COMMONWEALTH OF MASSACHUSETTS MARTHA COAKLEY, ATTORNEY GENERAL Date: March 6, 2013 By: Just owe (BBO# ) Assistant Attorney General Consumer Protection Division One Ashburton Place Boston, MA (617) , ext (Voice) (617) (Facsimile) justin.lowe@state.ma.us S!.IFFOL s COURT DEPT (ciae) 013 Potire rd red issue -' hcreon returnable the Cia 3a0 on nu& tvo i l rd am o CEIUSe why - ) choukl not 1y the Court, calatoit f kimi 31- r,ierk waniaaa 22