A Buffalo, N.Y. collection agency allegedly fraudulently collected more than $31 million from thousands of people across the U.S. by threatening them with arrest and coercing some into paying more than they owed, the U.S. Attorney’s Office in Manhattan said in announcing guilty pleas by four people and charges against another 11.
The amount could make it the largest fraudulent collection scheme ever prosecuted, according to U.S. Attorney Preet Bharara.
Court papers and prosecutors did not name the collection company but did reveal that the company’s owners, Travell Thomas, 37, and Maurice Sessum, 39, are the principals of several collection firms that the Federal Trade Commission and New York Attorney General Eric T. Schneiderman sought to shut down in February because of allegedly abusive practices.
Thomas and Sessum, in that case, are named as principal managers and officers of 4 Star Resolution LLC, Profile Management Inc. and International Recovery Service LLC, among others.
Bharara said the defendants took "ruthless advantage of the desperate situation” of many victims. Court papers describe orchestrated lies such as being told they had committed a felony by failing to pay debts, that their driver’s licenses would be suspended and they would be referred to an "attorney network.” Prosecutors said that Thomas, of Orchard Park, N.Y., and Sessum, of Buffalo, N.Y., told employees to tell people they owed greater sums than they might have believed. Thomas spent some of his resulting fortune to gamble and pay for sports tickets, his wedding reception, jewelry and cosmetic surgery for his wife, according to prosecutors. One collector told the mother of a debtor undergoing dialysis that he was a legal investigator’ with a law firm, not a collection agency, and that he was calling about check fraud, according to court papers. In another example, a collector told victims that they had committed fraud and that he was “in contact with the magistrate. …”The specific charges include wire fraud and conspiracy to commit wire fraud. Prosecutors announced that four company employees pleaded guilty to the conspiracy charge, a crime punishable by up to 20 years in prison. They include: Mark Lavin, 45, of Buffalo, N.Y.; John Salatino, 34, of Amherst, N.Y.; Jessica Mann, 30, of Dunkirk, N.Y.; and Jennifer Sherk, 27, of Buffalo, N.Y.
Others facing the charges are: Anthony Brzezowski, 49, of Buffalo, N.Y., the company’s director of operations; company managers Jimmy Stokes, 38, of Buffalo, N.Y.; Heather Gasta, 41, of Buffalo, N.Y.; and Tacoby Thomas, 37, of Orchard Park, N.Y.; and debt collectors Anthony Caba, 25, of Buffalo, N.Y.; Columbus Simmons, 46, of Buffalo, N.Y.; Charles Starks, 32, of Buffalo, N.Y.; William Clark, 30, of Buffalo, N.Y.; and Michael Calandra, 31, of Angola, N.Y.
Thomas and Sessum could not be reached for comment on the case. Earlier this year, Thomas accussed prosecutors of being "heavy handed" and said they had not given him time to fix any problems. He also conceded that some managers may have been "deficient" and that he had possibly not properly supervised them because of time spent on his various business interests.
Attorney Michael A. Benson, of Springville, N.Y., previously represented Thomas and has helped represent 4 Star in previous legal actions. He said the FTC and the U.S. Attorney’s Office set the fraudulently obtained figure at $31 million but have ignored the fact that legitimate debts were being collected and that the company’s principals had payroll and other business expenses to pay from the proceeds, which were collected over seven or eight years.
In the February case against 4 Star, the FTC and Schneiderman alleged that the company, six corporate entities and three individuals regularly called consumers using fictitious addresses, bogus company names and spoofed phone numbers. After misrepresenting their names and locations, 4 Star’s collectors allegedly falsely identified themselves to consumers, claiming that they were attorneys, process servers, government agents or criminal law enforcement officials.
During one call cited by prosecutors, a 4 Star collector used the pseudonym “Detective Jeff Ramsay,” and left a message where he falsely asserted that he was seeking to serve a bench warrant on the consumer for check fraud.
In another case, 4 Star’s collectors falsely told a consumer that her husband had committed check and money fraud and that legal action would be taken against the husband if the debt was not paid in two days. One of 4 Star’s collectors falsely identified himself to the consumer as “Investigator Kearns” and claimed that he worked for a government agency.
The complaint alleged that when consumers asked for proof of the supposed debt, 4 Star’s representatives refused to provide it and instead often told consumers they would only receive proof in court or after the debt was paid. The defendants often allegedly disclosed information about supposed debtors to third parties, including friends, family members, and employers, and illegally used abusive and profane language, including routinely calling consumers such names as “idiot,” “dummy,” “piece of scum,” “thief” or “loser.”