Operation Corrupt Collector - Federal Trade …

Operation Corrupt Collector

Federal & State Actions | 2020

Federal Actions

FEDERAL ACTIONS:

Matter Name Action Location (Company Location)

Type of Action

Date/Matter Information

Responsible Agency

Press Contact Press Release

FEDERAL TRADE COMMISSION

FTC v. National Landmark Logistics, LLC, et al. No. 0:20cv2592 U.S. District Court District of South Carolina (Charlotte, North Carolina area)

FTC v. Absolute Financial Services, LLC, et al. No. 0:20cv2596 U.S. District Court

Civil lawsuit: The FTC's complaint, seeking permanent injunction and equitable monetary relief, alleges that this company and its operators collected more than $12 million from consumers through illegal debt collection practices. The defendants allegedly used robocalls to leave deceptive messages for consumers about debts claiming they face impending legal action about debts, and when consumers returned the call, the defendants would falsely claim to be from a mediation or law firm, again threatening legal action, using knowledge of consumers' personal information as a way to convince consumers the threats were real. The complaint alleges that in many instances, consumers did not owe the debt being collected or the defendants had no right to collect it.

Date of action: 7/13/2020: Complaint filed.

Federal Trade Commission

Related matters: 7/17/20: Ex parte Temporary Restraining Orders issued.

8/25/2020: Stipulated preliminary injunction entered as to defendants Liberty Solutions & Associates LLC, LSA Processing System LLC, James Dennison and Eric Dennison.

9/14/2020: Temporary Restraining Order as to defendants National Landmark Logistics LLC, National Landmark Service of United Recovery LLC, Silverlake Landmark Recovery Group, LLC, and Jean Cellent extended until 10/5/2020.

Status of action: Pending.

Civil lawsuit: The FTC's complaint, seeking permanent injunction and equitable monetary relief, alleges that this company and its operators collected more than $5.2 million from

Date of Action: 7/13/2020: Complaint filed.

Related matters: 7/17/2020: Ex parte Temporary

Federal Trade Commission

Jay Mayfield (202) 326-2656 jmayfield@

Jay Mayfield (202) 326-2656 jmayfield@

District of South Carolina (Charlotte, North Carolina area)

FTC v. Global Asset Financial Services Group LLC, et al. No. 3:19-cv-55-GCM U.S. District Court Western District of North Carolina (North Carolina and New York)

consumers through illegal debt collection practices. In its complaint, the FTC alleged that the company used the defendants in the National Landmark Logistics case (above) to place deceptive robocalls alleging that consumers owed debt and faced legal action if they did not reply. Once consumers called the defendants after receiving the message, the defendants would often falsely claim to be representing a law firm or threaten consumers with arrest if they did not immediately pay the debt. According to the complaint, the defendants would use consumers' personal information (provided by the National Landmark defendants) as a way to convince consumers that the debt was legitimate, among numerous other illegal tactics.

Restraining Orders issued.

9/14/2020: Stipulated preliminary injunction entered.

Status of action: Pending.

Civil lawsuit: The FTC's complaint charged the Global Asset Financial Services Group collection operation with falsely claiming to be attorneys or affiliated with attorneys to pressure consumers into making payments on fake or unauthorized debts and threatening to take legal action against consumers if they did not pay. One of the companies, a debt-broker, was alleged to have bought, sold, and placed whole portfolios of fake debt, even after consumers said they did not recognize the debt.

Date of action: 6/12/2019: Stipulated Final Order against 4 defendants entered.

12/06/2019: Stipulated Final Orders against 12 remaining defendants entered.

In June 2019, the court entered a settlement order as to four of the defendants. In December 2019, the remaining 12 defendants also agreed to settle the charges against them. The court entered stipulated judgments as to all defendants banning them from debt collection, debt brokering activities and from misrepresenting to consumers that

Federal Trade Commission

Jay Mayfield (202) 326-2656 jmayfield@

news-events/pressreleases/2019/12/op erators-phantomdebt-schemepermanentlybanned-debtcollection

they are attorneys. The settlements also include monetary judgments.

Status of action:

Completed.

FTC and State of New York v. Hylan Asset Management, LLC, et al. No. 1:18-cv-00710-LJV U.S. District Court Western District of New York (New York)

FTC and State of New York v. Campbell Capital LLC, et al. No. 1:18-cv-01163-LJV-MJR U.S. District Court Western District of New York (New York)

Civil lawsuit: The FTC and the New York Attorney General's complaint charged the Hylan defendants, a debt broker operation, with buying, placing for collection, and selling portfolios of phantom debts, including debts that were fabricated or unauthorized by consumers, even though the debt broker was aware that many of these debts were fabricated or legally unenforceable. Hylan then placed the phony debts for collection with several collection agencies, including another corporate defendant, Worldwide Processing Group, LLC, which used illegal tactics to collect on them, despite consumers' credible denials that they did not owe the debts.

Date of action: 6/26//2019: Stipulated Orders for Permanent Injunction and Monetary Judgment entered.

In June 2019, the court approved a Stipulated Final Order that bans the Hylan defendants from debt collection activities and imposes a monetary judgment. The June 2019 Stipulated Order against the defendants involved in Worldwide Processing bans the company and its owner, Frank A. Ungaro, Jr. from engaging in unlawful collection practices and imposes a monetary judgment.

Status of action: Completed.

Federal Trade Commission &

New York State Office of the Attorney General

(case filed jointly)

Civil lawsuit: The FTC and New York Attorney General sued Robert Heidenreich; Campbell Capital LLC; Kahl, Heidenreich, and Nemmer LLC; Urban, Heidenreich, Melendez, and Associates, LLC; J & V Receivables LLC; Rich Financial LLC; and BCH & Associates Ltd. The complaint alleged egregious debt collection practices, such as calling

Date of action: 2/07/2020: Stipulated Order for Permanent Injunction and Monetary Judgment Entered against defendant Robert Heidenreich.

2/07/2020: Default judgment against remaining defendants entered.

In February 2020, the Court approved a

Federal Trade Commission &

New York State Office of the Attorney General

(case filed jointly)

Jay Mayfield (202) 326-2656

jmayfield@

news-events/pressreleases/2019/07/ph antom-debt-brokerscollectors-settle-ftcnew-york-agcharges

Jay Mayfield (202) 326-2656 jmayfield@

news-events/pressreleases/2020/02/op erator-fraudulentdebt-collection-

consumers and falsely claiming to work in law enforcement, typically coupled with false claims that consumers committed a crime or were about to be arrested on a warrant.

Stipulated Final Order settling the claims against defendant Robert Heidenreich. Under the settlement, he is permanently banned from the debt collection business and prohibited from misleading consumers about any financial products and includes a monetary judgment.

A February 2020 default judgment was entered against the remaining defendants imposing a ban from the debt collection business and a monetary judgment.

Status of action: Completed.

scheme-settles-ftcnewyork?utm_source=g ovdelivery

CONSUMER FINANCIAL PROTECTION BUREAU

Consumer Financial Protection Bureau and the People of the State of New York, by Letitia James, Attorney General for the State of New York v. Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray

U.S. District Court Western District of New York

(Buffalo, New York)

Civil lawsuit: The CFPB and New York Attorney General sued Douglas MacKinnon, Northern Resolution Group, LLC, Enhanced Acquisitions, LLC, Delray Capital, LLC, and Mark Gray for illegal collection tactics, including misrepresenting to consumers that they owed sums they did not owe; falsely threatening consumers with legal action that the collectors had no intention of taking; and impersonating law enforcement officials, government agencies, and court officers.

Date of action: 7/25/2019: Stipulated Final Judgment filed.

The Stipulated Final Judgment with MacKinnon, Northern Resolution Group, and Enhanced Acquisitions banned them from the industry and required they $60 million in redress and penalties. The Stipulated Final Judgment with Delray Capital and Gray banned them from the industry and required payment of redress and civil money penalties.

Status of action: Completed.

Consumer Financial Protection Bureau

& New York State Office of the Attorney General

(case filed jointly)

Marisol Garibay Marisol.Garibay@cf

aboutus/newsroom/cfpband-new-yorkattorney-generalsettle-debtcollection-group/

Bureau of Consumer Financial Protection and the People of the State of New York, by Letitia James, Attorney General for the State of New York, v.

JPL Recovery Solutions, LLC, Check Security Associates, LLC dba Warner Location Services and Orchard Payment Processing Systems, ROC Asset Solutions LLC dba API Recovery Solutions, Regency One Capital LLC, Keystone Recovery Group, LLC, Christopher L. Di Re, Scott A. Croce, Brian J. Koziel, and Marc D. Gracie

U.S. District Court Western District of New York

Civil lawsuit: The CFPB and the New York Attorney General sued a network of five companies, two of their owners, and two of their managers, for illegal debt collection practices. The complaint alleges that from at least 2015, the defendants have used deception, harassment, and other improper methods to induce consumers to make payments to them in violation of the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA). The complaint seeks consumer redress, disgorgement of ill-gotten gains, civil money penalties, and appropriate injunctive relief against the defendants.

Date of action: 9/08/2020: Suit filed.

Status of action: Pending.

(Buffalo, New York area)

U.S. DEPARTMENT OF JUSTICE

U.S. v. Angel Armando Adrianzen

U.S. District Court Southern District of Florida

(California)

Criminal indictment and conviction.

Pleaded guilty to conspiracy to commit mail fraud and wire fraud for partnering with call centers in Peru that took money from U.S. Spanishspeaking victims through lies and threats. These callers claimed to be attorneys or government representatives, and falsely told victims that they had failed to pay for

Date of action: 9/2019: Complaint filed. 10/08/2019: Indictment. 11/21/2019: Pleaded guilty (pending sentencing).

Consumer Financial Protection Bureau

& New York State Office of the Attorney General

(case filed jointly)

Marisol Garibay Marisol.Garibay@cf

consumerfina policycompliance/enforce ment/actions/jplrecovery-solutionsllc-et-al/

U.S. Department of Justice Consumer Protection Branch

&

U.S. Postal Inspection Service

. gov/opa/pr/californi a-resident-chargedleadingtelemarketingconspiracy-defraudand-extort-usconsumers

. gov/opa/pr/californi

or receive delivery of products.

U.S. v. Jesus Gutierrez Rojas, Alexandra Podesta, Virgilio Polo, and Omar Portocarrero

U.S. District Court Southern District of Florida

(Lima, Peru)

Criminal indictment, extradition, 4 defendants sentenced to terms of incarceration.

Gutierrez oversaw a series of call centers in Peru that falsely told Spanish-speaking victims across the United States that they incurred debts and would suffer various consequences for failure to pay off the debts that they did not, in fact, owe. Podesta, Polo, and Portocarrero managed and supervised three of these call centers.

Date of action: 4/2019: Defendants extradited.

Summer 2019: Pleaded guilty and sentenced to terms of incarceration.

U.S. v. Johnny Hidalgo Marchan, Francesco Guerra, and Rodolfo Hermoza

U.S. District Court

Criminal indictment, extradition, and 3 defendants sentenced to terms of incarceration.

The three men operated call centers in

Date of action: 12/2019: Defendants extradited.

Spring 2020: Pleaded guilty.

Summer 2020: Sentenced to terms of

U.S. Department of Justice Consumer Protection Branch

& U.S. Postal Inspection Service

U.S. Department of Justice Consumer Protection Branch

& U.S. Postal Inspection

a-resident-pleadsguiltytelemarketingconspiracy-defraudus-consumers

v/opa/pr/fourextradited-peruoperating-spanishspeaking-call-centersextorted-us-consumers

v/opa/pr/peruvianman-pleads-guiltyoperating-spanishspeaking-call-centerthreatened-andextorted-us

v/opa/pr/threeperuvians-pleadguilty-overseeingspanish-speaking-callcenters-extorted-usconsumers

v/usao-sdfl/pr/fourperuvians-sentencedoverseeing-spanishspeaking-call-centersthreatened-and

v/opa/pr/three-menextradited-overseeingcall-centersthreatened-anddefrauded-spanish-

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