On Tuesday, Manhattan federal prosecutors revealed the criminal charges
against 15 individuals in what U.S. Attorney Preet Bharara has said to
be the “largest fraudulent debt collection scheme ever to be prosecuted.”
The charged target is 4 Star Resolution, LLC, for nationwide illegal debt
collection practices. According to Bharara, the New York based company
“threatened victims with imminent arrest or legal action unless
they made payments.”
The company, 4 Star Resolution, LLC, is a Buffalo, New York based company.
The Federal Trade Commission and New York Attorney General jointly sued
4 Star Resolution in February for using false threats of arrest and abusive
language against consumers to collect more than $31 million in alleged
debts. According to the complaint filed, 4 Star regularly called consumers
using fictitious addresses, company names, and phone numbers. The federal
indictment alleged that 4 Star’s team used “particularly aggressive
and egregious tactics in attempting to trick consumers into paying debts.”
Additionally, their collectors falsely identified themselves as attorneys,
process servers, government agents, or criminal enforcement officials
in an attempt to scare consumers into making payments on supposed debts.
When consumers asked about proof of the supposed debts, 4 Star’s
representatives refused to provide it and often failed to provide required
written notice of the debt or required disclosures to consumers. “The
defendants charged [Tuesday] allegedly took ruthless advantage of the
desperate situation in which their victims found themselves, using threats
and lies to coerce payment and even trying to collect more money than
the victims ever owed,” Bharara said in a statement.
Specific instances of defendants’ alleged abusive behavior include:
- During one call to collect a supposed debt, a 4 Star collector claimed
to be “Detective Jeff Ramsay,” a detective who had been retained
by the National Check Fraud Center. This individual left a message for
the consumer and falsely claimed that he was seeking to serve a bench
warrant on for check fraud.
- During a separate incident, 4 Star collectors told a consumer that her
husband had committed check and money fraud. The collectors threatened
legal action if the alleged debt was not paid in two days. During this
call, one of the collectors identified himself as “Investigator
Kearns,” an employee of a government agency in Washington, D.C.
The charges alleged by the FTC and the New York Attorney General are wire
fraud and conspiracy to commit wire fraud. The crime of wire fraud carries
criminal penalties of up to 20 years in prison and fines. It is alleged
that CEO Travell Thomas used tens of thousands of dollars in consumer
money for a gambling habit, which included purchasing tickets to sporting
events, for his wedding reception, and for cosmetic surgery for his wife.
The four company employees who have pleaded guilty to the conspiracy charge
are: Mark Lavin, John Salatino, Jessica Mann, and Jennifer Sherk. The
other individuals facing charges are: director of operations, Anthony
Brzezowkski; company manager, Jimmy Stokes; Heather Gasta; Tacoby Thomas;
and debt collectors Anthony Caba, Columbus Simmons, Charles Starks, William
Clark and Michael Calandra.