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In the second case announced by Illinois AG Lisa Madigan’s second lawsuit involves a number of fraud schemes orchestrated by defendant Dayton D. Vickers Ellis, a/k/a Dale Ellis, president of the following mortgage brokering and home repair businesses also named as defendants in the lawsuit: Advocate Financial Services, Inc., Alpha Construction & Development, Inc., American Heritage Building Consultants, Inc., Apollo Custom Builders, Inc., Illinois Restoration Program, Inc., a/k/a Illinois Lending Institution, Indiana Restoration Program, California Restoration Program, and New York Restoration Program. Ellis’ operation was headquartered on the north side of Chicago.[/font][/color]
According to Madigan’s complaint, Ellis used three different schemes to defraud homeowners. Ellis’ fraudulent schemes all began with deceptive advertising and took different forms. Ellis sent direct mail solicitations to Illinois consumers describing an alleged government program that offered grants for home repairs. Ellis directed consumers who responded to these mail solicitations to submit mortgage loan applications to Advocate Financial Services. Ellis falsely told consumers that these mortgage applications were part of the purported government grant process. Ellis received substantial fees for originating loans. Before any home repair work was even started, Ellis would disburse money from the consumers’ mortgage proceeds directly to his construction company, American Heritage Building Consultants. In many instances, Ellis did not finish, or in some cases, even begin, the promised home repair work.
The complaint describes how Ellis’ first scheme worked to defraud consumers. For instance, in one case, a consumer owned her home free and clear prior to her transaction with Advocate. Ellis advised that consumer to take equity out of her home to pay for home repairs through his company and to pay off other unsecured debt. The consumer took out a mortgage for $105,000. During the mortgage underwriting process, Ellis advised the lender for the consumer’s loan that the consumer owed money to American Heritage Building Consultants. Ellis then recorded a mortgage in the name of American Heritage Building Consultants and secured this mortgage with the consumer’s property. In reality, American Heritage Building Consultants had not performed any work on the consumer’s home, and the consumer had not even entered into a contract for home repairs with the company. Nonetheless, American Heritage Building Consultants collected an approximately $20,000 disbursement at the consumer’s loan closing. The consumer never received any home repair work or a refund of the money.
Ellis’ second and third types of schemes involved taking consumers’ money for home repairs that were usually never performed on the basis that the government had a home repair grant matching program. In both of these schemes, Ellis would visit the homes of consumers who responded to his government home repair grant solicitation. At these home visits, Ellis explained that he was a government employee representing the fictional “Illinois Restoration Program.” Then, Ellis would explain two home repair grant programs, neither of which actually existed:
· The “50/50 program.” Under this purported program, the government would match the money the consumer invested in a home repair project on a dollar for dollar basis. To obtain such a grant, the consumer first had to write a check to Ellis’ Illinois Restoration Program for the amount the consumer wanted the government to match.
· • The “10% down payment program.” Under this purported program, Ellis told consumers that the government would pay 90 percent of the estimated cost of a home repair project. To qualify for this program, the consumer had to provide Illinois Restoration Program with a 10 percent down payment on the project. Ellis then uses high pressure sales tactics to steer consumers into agreeing to more substantial home repair projects under the guise of the money-saving benefits of the “10 percent down payment program.”
[color=#5F5F5F][font=tahoma]In both of these schemes, consumers would write checks to one of Ellis’ companies and he would cash or deposit the checks, but consumers never received any grants or home repairs.




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