Asset Capital and Management Group, a Southern California-based debt collection operation, will pay more than $4 million to settle Federal Trade Commission charges that it extorted payments from consumers using false threats.
The settlements resolving the case impose judgments totaling $90.5 million. Judgments against Thai Han, Jim Tran Phelps, Keith Hua and James Novella will be suspended when they surrender their personal assets. The proceeds from those assets, along with frozen corporate funds, total more than $4 million. All of the defendants are banned from the debt collection industry.
The FTC alleged the defendants used a vast network of intertwined companies and dozens of fictitious names to illegally coerce payments from consumers for credit card debt that the operation had purchased from creditors.
The defendants use an assortment of deceptive and abusive tactics in collecting on the credit card debt, according to the FTC, and committed several violations of the FTC Act and the Fair Debt Collection Practices Act.
The FTC alleged that the defendants were part of an elaborate collection scheme operating from locations in Orange and Riverside counties in California, and that they used various business names including Western Performance Group, as well as phony names, which they changed frequently to avoid law enforcement scrutiny.
The FTC alleged that the defendants called consumers and their employers, colleagues and family members posing as process servers or law office employees, and claimed they were seeking to deliver legal papers that purportedly related to a lawsuit.
In some cases, the defendants threatened that consumers would be arrested if they did not respond to the calls. But the collectors were not process servers or law office employees, and the defendants did not file lawsuits against the consumers.
A federal court in Los Angeles halted the operation last summer. The court at that time froze the defendants assets and appointed a receiver to take charge of the defendants business.
Besides the monetary judgments and the bans on collecting debt, the settlement orders prohibit them from misrepresenting any relevant fact in connection with promoting or selling credit repair, debt relief, mortgage assistance relief or lending services.