The operators of a fraudulent debt collection scheme will be banned from the debt collection business under a
The settlement resolves a
In a separate criminal proceeding, Patel pleaded guilty to mail and wire fraud charges brought by the U.S. Department of Justice based on his scheme. This week, he was sentenced to a one-year prison term.
Along with banning the defendant from the debt collection business, the FTC’s settlement order also prohibits the defendants from making misrepresentations about any product or service, profiting from customers’ personal information, or failing to properly dispose of customer information.
The order imposes a judgment of more than $4.3 million. Because of the defendants' inability to pay, the amount will be suspended upon payment of $608,500, which will be used for consumer redress. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
The FTC vote authorizing the staff to file the proposed stipulated final order was 4-0. The order was entered by the U.S. District Court for the Eastern District of California on September 10.