Mention the name of Andrew J. “Andy” Shaevel and some prominent Buffalo business leaders will tell you stories of a devoted family man, a supporter of charities and an entrepreneur who does all he can to boost Buffalo.
“Andy is a stand-up guy” who “not only takes the high road, but advises and inspires other people to do the same thing,” according to his longtime friend Steven J. Weiss, president of the Buffalo Jewish Federation.
But prosecutors from the State Attorney General’s office and the Federal Trade Commission paint a very different picture of Shaevel and an Amherst-based business he founded and owns, Hylan Asset Management.
Hylan Asset Management, according to a noncriminal complaint filed by the government in late June, is a multimillion-dollar player in the seamy world of debt collection and the even seamier world of “phantom debt collection.”
According to the government's lawsuit, Hylan buys and sells millions of dollars worth of “bad debt”—supposedly unpaid loans and bills – and sometimes buys debt from firms with known records of fraud.
Then, according to the government, Hylan hires debt collection companies – including some who harass people with illegal, threatening tactics – to collect the debts.
Some of those collectors violate federal regulations by threatening consumers with arrest, refusing to provide written validation of the debts or harassing the consumers’ relatives, friends and co-workers, the government alleges.
And what makes it worse, according to State Attorney General Barbara D. Underwood, is that some of the debts that Hylan and its associates seek to collect are “phantom debts” – debts that were never actually owed, that were made up by fraudsters as a way of making money off innocent people.
"Once they get your personal information and your phone number, the calls never stop," said Andrew Therrein, 34, of Rhode Island, who said four different companies harassed him seeking payments to Hylan. He said bill collectors continued to call him for years after he proved that he owed no money to Hylan or anyone else.
Is it profitable? According to government documents, Hylan deposited almost $23.8 million into its bank accounts between 2014 and early 2018.
Shaevel, 53, denies allegations of wrongdoing, saying the charges have shaken him and his family.
Speaking to a Buffalo News reporter for more than 90 minutes, Shaevel said he now regrets that he ever got into the business of buying and selling debt.
Shaevel told The News that he “never” knowingly bought, sold or tried to collect debts that were fraudulent.
“I am not the man that the government portrays in those court papers,” Shaevel said. “The good person that my friends speak about – I’m that guy.”
Shaevel, who calls himself a "deal junkie," is the managing partner of Mensch Capital Partners, the group of businessmen who bought the old Westwood golf course in Amherst and have been trying for years to build a $250 million neighborhood development there.
Over the past 25 years, the Williamsville man has received at least 19 honors and awards from local organizations, including the Buffalo Niagara Partnership, the Jewish Community Center of Buffalo, Canisius College, Williamsville Schools and the Amherst Chamber of Commerce. He has led fundraising drives that raised millions of dollars for good causes in the region’s Jewish community.
Shaevel said his company takes precautions to make sure that the collectors it hires closely follow the federal Fair Debt Collection Practices Act and state laws that outlaw undue harassment of people who owe money.
“In every one of our contracts with debt collectors, it’s made very clear that they have the obligation to provide services that are compliant with the law,” Shaevel said. “We monitor their operations, and if we find out that they are not complying with the law, we sever ties with them. We have a hotline on Hylan’s website where people can call to report improper actions by a collector. We’ve severed relations with many collectors over the years based on feedback from consumers.”
One debt collector who no longer collects for Hylan is identified in court papers as Kelly S. Brace, who ran four different collection companies in the Buffalo area.
In August 2016, Brace and his companies were banned from the debt collection business under a settlement with the Federal Trade Commission and New York's attorney general. The agencies charged Brace's companies with "collecting on fake payday loans they knew consumers did not really owe, and using deceptive and abusive tactics to get them to pay, including false threats of lawsuits and arrest."
Brace has not had anything to do with Hylan since at least 2014, Shaevel's attorney said.
According to Shaevel, only a minuscule number of Hylan debtors – far below 1 percent – made complaints to his company about fraudulent debts during the period of time covered by the government complaint, 2013 until June 30 of this year.
“During that period of time, we had 1.5 million people in our debt portfolio. One hundred and seven made complaints,” Shaevel said. “In each of those cases, we stopped all collection efforts. Whenever we find out something is wrong, we take corrective action.”
But the government agencies allege that Shaevel was fully aware that a portion of the debt in Hylan’s portfolio was fake. The complaint cites several instances in which Shaevel was warned by employees and business associates that some of the debts he had purchased were phantom debts, but continued to buy debt from the same sources.
By the fall of 2014, a Hylan employee was internally raising questions about the "accuracy and veracity" of some of the loan information in Hylan's debt portfolio, government prosecutors alleged. By November 2014, Shaevel was aware of a "high number of consumer complaints" from people who insisted they never took out loans included in Hylan's portfolio, the prosecutors charged.
In a November 2014 email cited in court papers, Shaevel complained that there was a "MAJOR problem" and "major FRAUD" in some of the debt Hylan had purchased from a company based in Chicago. But after an official from the Chicago company assured Shaevel that the problems were a "non-issue" that would be corrected, prosecutors said Shaevel continued to buy debt from the same company.
That Chicago company, Stark Law, was accused of "deceptive and abusive" debt collection practices in 2016, and banned from the debt collection business in 2017 after agreeing to surrender $9 million in assets to the Federal Trade Commission.
The government agencies claim Shaevel’s company sometimes bought debt portfolios from “notorious distributors of phantom debts.”
Court papers tell the stories of Sally Argona and Isabel Avello, both of Florida, and Auston Watkins, of Washington, D.C.:
- Argona said she repeatedly got "nasty" and "threatening" calls in 2015 from a company called High Point Assets, seeking payments on a $380 "payday loan" owned by Hylan Asset. She said she never took out any payday loans. She said the collectors used "foul language" and threatened to send police to her home.
- Avello said High Point Assets called her in 2015, falsely claiming she owed money to Hylan. She said collectors refused to provide written validation of the debt and also called her 83-year-old stepmother, telling her Avello owed money.
- Watkins said bill collectors called him in 2015, claiming he owed $480 to Hylan. He said the collectors refused to provide written documentation. The collection calls stopped after he wrote a letter to Hylan, telling the company he never took out a payday loan.
“Even though they knew the debts were fake, Hylan and Shaevel nonetheless allegedly placed these fraudulent debts with collection companies, who in turn illegally pursued consumers for payments,” the agencies alleged.
The government charges never specify what percentage of the debts in the Hylan portfolio were “phantom debts,” noted Shaevel's attorney, Dennis C. Vacco.
“They do not specify a percentage because they do not know what the percentage is … they cannot determine it,” Vacco said.
“And if they can’t determine it, how can I determine it?” Shaevel said.
Vacco, a former federal prosecutor and state attorney general, maintains that “we can make a strong case in Hylan’s defense.” He and Shaevel said they are in discussions with government attorneys that they hope will lead to a “negotiated settlement.”
In the meantime, Hylan has agreed with prosecutors that it will stop all operations.
“No buying of debt, no selling of debt, no collections until there is some kind of resolution to this case,” Vacco said.
Hylan has operated as a “debt broker” since at least March 2011. Headquartered in a small building at 5477 Main St. near Williamsville's Glen Park, Hylan never had more than eight employees, according to Shaevel. "Now we have three," he said.
Vacco said Hylan is believed to be one of the biggest companies of its kind in Western New York.
Hylan “places debt for collection” with a number of companies, including Worldwide Processing Group LLC in Blasdell, according to court documents.
Underwood's lawsuit charges that Worldwide – also known as Forward Movement Recovery – frequently and knowingly “collected on phantom debt that it received from Hylan.”
Worldwide is owned by a Buffalo area man, Frank A. Ungaro Jr., who has also denied wrongdoing.
“Not only did Worldwide and Ungaro attempt to collect on debts that consumers did not owe, but they also threatened and harassed consumers to attempt to do so, in violation of state and federal laws,” Underwood said. She called it an "unconscionable scheme."
Ungaro’s company generates more consumer complaints to the Buffalo Better Business Bureau than any other business in the region, according to court papers.
Court papers identify Jon E. Purizhansky, a convicted felon, as a corporate officer of Hylan and one of Shaevel’s co-defendants in the civil case. Purizhansky, a lawyer, pleaded guilty in 2006 to a federal felony charge of conspiracy to obtain a visa through false statements. He admitted that he helped a Russian man file false immigration papers that enabled him to move to Buffalo. Purizhansky was suspended from practicing law for one year.
“Jon is a good man ... I'm proud to call him my business partner,” Shaevel said of Purizhansky. “He made a mistake as a rookie lawyer in a pro-bono case.”
Therrein, who is one of the 107 individuals who made complaints to Hylan, has no kind words for Shaevel, Purizhansky or their company.
A salesman for a grocery store promotions company, Therrein has been assisting the State Attorney General’s Office and other law enforcement agencies since 2015 on investigations into phantom debt collectors. Therrein has also spent hundreds of hours conducting his own investigations into Hylan Asset Management and companies hired to collect debts for Hylan.
He said he has been threatened with arrest and violence dozens of times by debt collectors – seeking payment of debts that Therrein says he doesn’t owe. In 2015, Therrein said, a collector from Buffalo threatened to come to Therrein’s home and rape Therrein’s wife because Therrein told him to stop bothering him. That debt collector was not connected to Hylan, Therrein said.
Therrein said he has even less respect for men like Shaevel, who – in Therrein’s view – make big money off debt collection without having to do any of the dirty work themselves.
“At the bottom end of the debt business, you have these collectors. I have talked to many of them. Some of them are ex-cons who can’t find other work,” Therrein told The News. “The collector might make $10 an hour, plus bonuses, based on what he can collect … Some of these guys will say or do anything to collect a debt.”
At the top end of the debt collection hierarchy are people like Shaevel, who, according to Therrein and government investigators, make their profits based on how much debt can be collected.
Shaevel said he spent a lot of time talking to Therrein and trying to help him with his complaints.
Buffalo at 'epicenter'
Two experts on shady debt collection practices told The News that Buffalo is a known hotbed of criminal debt collection practices.
Western New York has 149 collection agencies that are registered with the state, according to the state Labor Department, and those companies have an estimated 3,995 employees. But investigators believe there are "many more" local people working in collections, because some companies simply set up shop without registering with the state, a government source knowledgeable about these issues told The News.
“Phantom debt is very nasty stuff – it’s an out-and-out criminal shakedown,” said Fred O. Williams, a former Buffalo News reporter who now works for a consumer-oriented website called creditcards.com.
Many of the victims of “phantom debt” schemes are unsophisticated people who owed debts in the past and may not be certain of all the debts they actually owe, said Williams, who worked undercover at a Buffalo debt collection firm while researching a book on debt collectors in 2008.
Williams said companies that buy and sell lists of debtors – such as Hylan Asset – provide much of the funding that enables fraudulent debt collectors to operate.
“The owners of these companies surround themselves with a lot of deniability. They want to be able to say, ‘I’m shocked, truly shocked to hear that anything illegal was going on,’” said Williams.
Similar comments came from April Kuehnhoff, a staff attorney with the National Consumer Law Center, who called Buffalo “an epicenter of unscrupulous debt collection practices.”
Three other Buffalo area debt collectors and their companies, who broke laws by lying to consumers, threatening to have them arrested and inflating the amounts to the debts owed, were permanently barred Sept. 21 from the debt collection industry and required to pay a total of $27 million in restitution and damages.
The civil case against Joseph Ciffa, 50, and Gregory MacKinnon, 53, both of Grand Island, and former Buffalo-area resident Angela Burdorf, 38, now of Winter Park, Fla., was also handled by the State Attorney General's Office.
People who know Shaevel told The News they would have never expected him to be involved in anything unseemly or illegal.
Colleen C. DiPirro, former president of the Amherst Chamber of Commerce, calls him “a doting father, a loyal husband … a leader determined to do good things in his community.”
“I fully respect Andy as a business leader and as a person," said Steve Bell, managing partner of Steve Bell Communications, one of several business people who spoke in glowing terms of Shaevel’s reputation as a philanthropist and ethical business leader.
Weiss, who has known Shaevel since the two were children, said he was “very surprised” to hear that government agencies have accused Shaevel of wrongdoing.
“I think I know enough about that industry to say it’s a tough environment, ripe for abuse,” Weiss said of the debt collection industry. “If anyone could avoid that, it would be Andy. He is the kind of guy who would make sure his company would follow the rules and do things the right way. I’m confident he will be able to survive this and clear his name.”
Born in New Jersey, Shaevel moved with his family to Williamsville when he was 9. He said his father was a business executive who worked for the company run by Paul Snyder Jr., former owner of the Buffalo Braves professional basketball team.
After graduating with a business degree from Canisius College, Shaevel began working as an investment banker with what was then called Marine Midland Bank. In 1991, he and two business partners started an Amherst firm, Remarketing Services of America, which helped banks remarket former leased automobiles. Started with three employees, the company had nearly 800 workers when the partners sold it to the Mercedes automotive company in 1996. In recent years, Shaevel has been involved with several projects in the Buffalo area, including the refurbished Marin Building on downtown Main Street.
Shaevel was honored as Entrepreneur of the Year in 1998 by the Amherst Chamber of Commerce and awarded the Distinguished Alumni award from Canisius College in 2004. In 2015, his name was placed on the Williamsville East High School Wall of Fame.
Shaevel said he believes in giving back to Buffalo.
“My father calls this case a witch hunt,” Shaevel said of the Hylan investigation.
“It’s not a witch hunt,” Vacco said. “It’s a stretch.”