A debt-collection company in Buffalo used lies and trickery to fraudulently collect more than $31 million from thousands of people across the country, the U.S. Attorney’s Office in Manhattan said Tuesday in announcing guilty pleas by four participants and charges against 11 others.
U.S. Attorney Preet Bharara said in a statement that the millions of dollars involved could make it the largest fraudulent debt-collection scheme ever prosecuted.
The collectors, he said, took “ruthless advantage of the desperate situation in which the victims found themselves” by threatening them with arrest and coercing some into paying more than they owed.
Court papers describe orchestrated lies. Victims were told, for example, that 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.”
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 a third example, a collector told victims that they had committed fraud and that he was “in contact with the magistrate. …”
“They are en route right now,” he reportedly continued. “Within 46 minutes, they will be there to serve you.”
Prosecutors say that company owners Travell Thomas, 37, of Orchard Park, and Maurice Sessum, 39, of Buffalo, instructed employees to “juice” balances to trick people into thinking they owed greater sums than they might have believed. The prosecutors said Thomas spent some of his resulting fortune to gamble and pay for sports tickets, his wedding reception, jewelry and cosmetic surgery for his wife.
While court papers and prosecutors do not name the debt-collection company, Thomas and Sessum were named as the principals of an assortment of debt-collection companies that the Federal Trade Commission and State Attorney General Eric T. Schneiderman sought to shut down in February because of allegedly abusive practices. In that case, Thomas and Sessum are named as principal managers and officers of 4 Star Resolution LLC, Profile Management Inc. and International Recovery Service LLC, among others.
Attorney Michael A. Benson, of Springville, represents Thomas and is one of the lawyers representing 4 Star. He said he does not yet know whether he also will represent Thomas on the criminal charges. But he said Thomas was en route to Benson’s office Tuesday morning and would have surrendered to the authorities had they not arrested him at his home.
Thomas and the other defendants all pleaded not guilty in U.S. District Court in Buffalo.
Benson said the FTC and now the U.S. Attorney’s Office set the fraudulently obtained figure at $31 million, but they ignore 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.
“They make it look in the indictment that they unsealed today that these gentlemen took the money and ran,” Benson said. “That is completely not true.” He went on to say that it will be difficult and expensive for the defendants to face charges in New York City and that he expected their lawyers to attempt to move the case to Buffalo.
Asked why the criminal matter was begun in New York City and not Buffalo, a spokeswoman for Bharara said the FTC referred the case to the U.S. Attorney’s office for the Southern District.
The charges are wire fraud and conspiracy to commit wire fraud. The prosecutors announced that four company employees have pleaded guilty to the conspiracy charge, a crime punishable by up to 20 years in prison. The four are: Mark Lavin, 45, of Buffalo; John Salatino, 34, of Amherst; Jessica Mann, 30, of Dunkirk; and Jennifer Sherk, 27, of Buffalo.
Others facing the charges are: Anthony Brzezowski, 49, of Buffalo, the company’s director of operations; company managers Jimmy Stokes, 38, of Buffalo; Heather Gasta, 41, of Buffalo; and Tacoby Thomas, 37, of Orchard Park; and debt collectors Anthony Caba, 25, of Buffalo; Columbus Simmons, 46, of Buffalo; Charles Starks, 32, of Buffalo; William Clark, 30, of Buffalo; and Michael Calandra, 31, of Angola.