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Falls debt collector collected debts, not once, but twice

Joe Ciffa's niche in the debt collection world was collecting on debts he knew people had already paid off.

Prosecutors say the tactic was routinely used by Ciffa's employees and over time became known as "re-dos."

Ciffa, as part of a plea agreement Friday, admitted using the tactic to go after debtors he deemed "easy targets."

As part of his deal with prosecutors, the former Niagara Falls and Kenmore debt collector also admitted accepting Medicaid benefits for his family in 2016 because he purposely under reported his income.

In the past, investigators have estimated that the fraudulent activity committed by Ciffa and others resulted in $22 million in income over a four-year period ending in 2015.

Ciffa, who remains free on bail, said little during his appearance before U.S. District Judge Richard J. Arcara and his attorney declined comment afterward.

Arcara, who will sentence Ciffa in May, at one point asked about his victims and the $3 million in restitution called for in his plea agreement.

"We've identified many of the victims," Assistant U.S. Attorney Maura K. O"Donnell told the judge.

"From all over the country?" Arcara asked.

"From all over the county," O"Donnell answered.

Ciffa's prosecution is the latest in a series of debt collection cases, both civil and criminal, that have brought attention to the illegal tactics used by some local businesses.

Often, the allegations at the core of the cases center around practices intended to scare people into making payments on debts they may or may not owe.

Investigators say Ciffa's strategy was to pose as a government official, investigator or FBI agent, or to tell victims that he had been retained by the district attorney's office.

In other instances, Ciffa would threaten people with arrest or tell them that an officer was being dispatched to their home, according to court papers.

In his plea agreement, Ciffa admits his employees posed as lawyers and used false threats of arrest against debtors.

He also admits under reporting his 2016 business income – it was $81,975, not $15,189 – to the Internal Revenue Service.

In the end, Ciffa pleaded guilty to two felony charges – conspiracy to commit wire fraud and preparing a false tax return. He faces a recommended sentence of up to 97 months in prison.

In addition to the criminal case, Ciffa is the target of a civil suit filed in 2015 by the Federal Trade Commission and the New York State Attorney General's office.

At one point in the case, U.S. District Judge William M. Skretny issued a temporary restraining order halting Ciffa's tactics.

Five months later, Skretny followed up by ordering a preliminary injunction against Ciffa's company.

The case is scheduled to go to trial in July.

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