Olympian Called Victim of Credit-Repair Scam; FBI Quizzed Ex-Aide

Eric Phillips is being sued for $37,000 for unpaid rent and utilities on a Carlsbad office his business occupied before it moved to Oceanside and recently closed.

But that could be the least of his problems.

The FBI and other agencies have been looking into Phillips and his would-be credit-repair business operating as Georggin Law Firm, according to a former employee who fears him so much she says she moved out of state.

Clients say they paid Georggin and paralegal Phillips from $2,000 to $6,000 to have foreclosures or short sales “expunged” from their credit records to no avail—despite a “100 percent money-back guarantee.”

Among them were a Palm Springs real estate broker with offices in Beverly Hills and Honolulu and a three-time Olympian now a professional athlete.

“They go around lying to people—all sorts of promises that literally add up to a bunch of hogwash,” said Christian Arbid, the broker. “It’s a certifiable scam.”

The Olympian, contacted in Las Vegas where her home was foreclosed upon, told Patch in mid-June that Georggin Law vowed to fix her credit.

“They said: ‘We’ll probably get this done in three weeks,’” said the athlete, who asked that her name not be used. “I called them when I got back in the [United States], and they’re like: ‘We’re having problems.’”

Arbid shared similar stories of being denied a refund when Georggin failed a test he set up “to see how good you are” before letting his 150 agents meet with the credit-repair firm.

“I just got exhausted” after sending more than 150 emails and getting back all but $600 or $700 of his payment in little “drips,” Arbid said in a June phone interview.

Georggin Law—named after San Diego attorney Ernest Georggin—made a “litany of excuses” for delaying the refund, Arbid said, including “I can’t cut a check today; I’m out of town,” “Someone’s on vacation” and “Our printer broke down.”

But Kylene Stemmons—former director of  business development at Georggin—could have strong evidence against Phillips, who sometimes has suggested he is a lawyer but is not.

“The FBI contacted me in January … and we talked for over an hour,” Stemmons told Patch via email. “I told them everything that I knew that had happened but couldn’t give them much info on Eric or the inside workings of the company because I wasn’t privy to any of that.”

Stemmons, who left Georggin in November, said she was told the FBI had been “watching him for a long time.”

In fact, before he divorced his wife, Sandra, in 2010, Phillips was targeted in 2008 by a Federal Trade Commission investigation as part of a probe called Operation Clean Sweep.

As the Los Angeles Times reported: “One of the companies under investigation by the state is Financial Link Services in San Diego. The operational supervisor of the company, Eric Phillips, said he met once with officials from the attorney general’s office several months ago.”

Phillips denied any wrongdoing in that 2008 article, but earlier that year, an Ohio appeals court upheld a $55,000 judgment against Eric and Sandra Phillips and Montclair-based Financial Link Services in a case involving violations of the Telephone Consumer Protection Act of 1991.

But the Times quoted Phillips as saying: “The [client] complaints are just horrible. This is not a business for the faint of heart.”

Darrell Foxworth, a San Diego-based FBI special agent, told Patch: “FBI does not confirm or deny the existence of an investigation, absent certain circumstances. This is done for a number of reasons to include privacy issues and to maintain the integrity of the investigation.”

Stemmons, the former employee, said she isn’t comfortable letting anyone know where she’s gone.

“I am truly scared of Eric,” she wrote. “I am certain he believes it was me who contacted the FBI and [Attorney General’s office] because I was very, very angry and disgusted and let him know the day I quit.”

Stemmons said she sent a mass email to her contacts announcing her resignation “and my disappointment and disgust with their business practices and lack of service as promised.”

After declaring that she was severing all ties with the company, Phillips “called and emailed me several times threatening me and I am scared of him.”

Phillips, who did not respond to email inquiries from Patch, commented in an NBC San Diego report—which broke the story Monday—and in postings on Yelp, the consumer review site.

“Our firm has had no complaints from Better Business Bureau or the California Bar Association in our 36-year history,” Phillips wrote in late January. “There is absolutely no merit whatsoever to the comments posted in this review.”

But 10News, the local ABC affiliate, reported Tuesday that the Better Business Bureau has received 22 complaints about Georggin Law in 2013 alone.

The San Diego-Imperial Better Business Bureau website says Georggin Law was contacted twice in May “with concerns regarding FTC-prohibited practices, unethical advertising and business practices as well as complaints related to not responding to consumer inquiries regarding case statuses.”

The company has failed to respond, the BBB said.

In August 2011, Georggin Law was the subject of a Patch column by La Mesa real estate agent Charlotte Reed, who suggested that credit-repair efforts are a waste of money.

“Instead of paying for a ‘service’ that is almost certain to fail, it is better to save the money and put it toward the next home purchase when the time is right,” Reed wrote.

Real estate broker Arbid, 36, says he has been in contact with about a dozen people who claim to have been victimized by Georggin Law.

“[Phillips] basically sends to the [small-claims] courtroom a lot of huff and puff and bluff,” Arbid told Patch. “They basically use tactics that a Superior Court will not even hear or engage.”

Arbid said Phillips has filed so many lawsuits that a representative of Chase Bank “actually told the judge … that her entire job” is fending off his “frivolous attacks.”

“He goes from courtroom to courtroom all over Southern California,” Arbid said in a phone interview.

Phillips, whose Georggin Law title is senior vice president, declined to go on camera but told NBC San Diego recently: “I just don’t have any information. I hope everyone gets a resolution.”

His website has been taken down—not long after he sold his 800 number to a Washington, DC, credit company, whose customer service said: “We’re in no way associated with that company.”

Arbid contends that the FTC has barred Eric Phillips from credit-repair activity, but Patch hasn’t confirmed such a ban with the federal agency.

“He utilizes other people’s names to run Georggin Law,” Arbid said. Georggin is paid a $5,000 monthly fee, Arbid said he has heard.

“All [Phillips’] bank accounts are in his son’s name,” Arbid said of Joseph Phillips, about 20. “All these puppets in front of him take the brunt” of attacks, Arbid said, “while he cashes in money and scares people. … They’ve been left with nothing.”

Arbid said he filed a complaint with the State Bar of California against Georggin but didn’t trigger an investigation because he was told he was the only one making such a complaint—a contention he rejects.

The Olympian says she lived in her 3-bedroom, 2½-bath home between 2005 and 2011 or 2012 before her mortgage company, Countrywide, foreclosed.

She said she heard about Georggin Law from a female friend, whose land went into foreclosure and also sought a credit repair service.

“I just went with her” to Georggin Law, said the athlete, who never met Phillips. “I just wanted to clean up my credit to buy another house.”

And the landlord’s suit against Phillips for unpaid rent?

Filed April 30 in Vista Superior Court,  the complaint by T&G Insurance Services of San Marcos calls for $37,491 in damages (plus attorneys fees). 

Georggin Law owed that amount in July 2012 on its offices at 560 Carlsbad Village Dr., suite 204. Later, the firm operated out of an office at 2103 S. El Camino Real in Oceanside, where different accounts said the office closed in May or June.

The breach-of-contract case is pending before Judge Robert Dahlquist.

For her part, former Georggin Law employee Stemmons said: “I don't think I’ll ever get over it or the guilt I feel for being so stupid and just believing him and promoting it!  I’m horrified and humiliated and sad.”

Said Arbid via email: “It’s bad enough that families have lost their homes. Scam artists that prey on these victims takes this terrible situation and makes it disgustingly worse.”