John Vartanian, 57, of Newport Beach, is headed to federal prison for 27 months after pleading guilty to conspiracy to commit mail and wire fraud in a multimillion-dollar scam that preyed on Americans drowning in credit card debt. The salesman peddled false hope through phony debt relief firms Nelson Gamble and Associates and Jackson Hunter Morris and Knight, pocketing more than $1.2 million in stolen payments while doing nothing to reduce victims’ debts.
Vartanian, sentenced Monday by U.S. District Judge Dale Fischer in Los Angeles, will also serve three years of supervised release and must pay $1,208,086 in restitution. Prosecutors revealed he cold-called desperate consumers nationwide, falsely claiming the companies—often disguised as law firms—could slash their debts through negotiations with creditors. Instead, the first six months of victims’ payments went almost entirely to undisclosed up-front fees, with at least 15 percent of total debt siphoned as profit.
The scheme operated from February 2010 to September 2012, when the operation rebranded from Nelson Gamble to Jackson Hunter after being exposed. Victims were lied to, told Nelson Gamble had gone bankrupt and that Jackson Hunter was a separate entity now handling their accounts. The ruse worked: many who had demanded refunds dropped their complaints, believing the original company had collapsed.
“These scams take advantage of consumers already struggling with debt,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer. “The Department of Justice will continue to work with its law enforcement partners to protect consumers from fraud, especially when they are targeted based on their financially vulnerable conditions.”
U.S. Attorney Eileen M. Decker called the fraud a calculated attack: “Mr. Vartanian preyed upon vulnerable consumers who were already in financial distress. This defendant provided his victims with false hopes and instead stole their money as part of an elaborate scheme.” Regina L. Faulkerson, Inspector in Charge of Criminal Investigations at the U.S. Postal Inspection Service, praised the conviction: “We are gratified by today’s sentencing, on behalf of the many unsuspecting victims who sought financial relief, only to be further burdened by these criminals.”
Four other defendants have already pleaded guilty and were sentenced last week. The Federal Trade Commission filed a civil case in September 2012 against the companies and principal Jeremy Nelson, alleging widespread deception of consumers. That case settled in August 2013 with a consent decree. The Justice Department’s Consumer Protection Branch, alongside Postal Inspectors, continues to pursue similar fraud networks nationwide.
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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