The Federal Trade Commission is mailing more than $596,000 to consumers who lost money to a fraudulent debt collection scheme that processed payments for payday loan debts they didn’t owe. More than 1,700 people will receive refund checks.
Kirit Patel, Broadway Global Master Inc. and In-Arabia Solutions Inc. were banned from the debt collection business in September 2015 under a
The average check amount is $350.39 and consumers are instructed to deposit or cash them within 60 days of the mailing date.
The FTC
A federal court subsequently halted the operation and froze the defendants' assets pending litigation. The court imposed a judgment of more than $4.3 million but because of the defendants' inability to pay the amount was suspended upon payment of the $596,000. The court noted that the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
In a separate criminal proceeding last September, Patel pleaded guilty to mail and wire fraud charges brought by the U.S. Department of Justice based on his scheme. He was sentenced to a one-year prison term.