Nearly 25,000 consumers deceived in a collections scam operated by three companies, using the name National Check Control, will receive $1.6 million, Federal Trade Commission spokesperson Claudia Bourne Farrell tells Collections & Credit Risk.
The FTC will mail the checks this month, ending a case that began in 2003 when the FTC filed a lawsuit against Barry Sussman, owner of the companies, and corporate counsel Charles Hutchins.
The FTC accused Sussman, Hutchins and the firms - Check Investors Inc., Check Enforcement Inc. and Jaredco Inc. - of collecting amounts that were not owed, harassing consumers, falsely threatening criminal prosecution and illegally communicating with third parties. The defendants ultimately appealed their case to the U.S. Supreme Court, which declined to hear it.
On Feb. 7, 2008, one day after the Third Circuit Court of Appeals in New Jersey refused to review the case, Sussman removed a box of gold coins valued at $335,000 from a bank safe deposit box. A federal court previously had ordered him to turn over the coins to the FTC. A federal jury later convicted Sussman of two felony counts - theft of government property and obstruction of justice - and last October he was sentenced to 41 months in federal prison.
The FTC collected another $600,000 from Sussman's wife, whose name was not immediately available, in 2004. She was named as a "relief defendant" in the case meaning that while she did not engage in the illegal activity, she profited from it and the FTC could legally seek redress. The source of the additional funds making up the $1.6 million total was not clear at press time. The 24,916 consumers who will receive checks were identified from records obtained in the case.
Other agencies involved in investigating the case include the Office of the U.S. Attorney for the District of New Jersey, the U.S. Postal Inspection Service and the Office of the New Jersey Attorney General.