A federal investigation into Kenmore debt collector Mark M. Miller intensified this week, with the government revealing it seized nearly $400,000 from a Lockport company for alleged “money laundering.”
Federal prosecutors said Market Street Debt Partners received payment information from credit and debit cards, processed those payments and – after deducting a service fee – transferred the money into accounts associated with debt collection companies operated by Miller.
Prosecutors allege that Mark M. Miller owned and operated several businesses, “which engaged in a wire fraud scheme related to unlawful debt collection activities."
Investigators from Homeland Security seized the $392,495 from Market Street Debt Partners in May, at the same time they seized $90,385 from Miller’s Kenmore residence.
The ongoing investigation is the latest of several recent law enforcement efforts to crack down on alleged fraud by Western New York debt collectors.
The National Consumer Law Center has called Buffalo “an epicenter of unscrupulous debt collection practices,” and over the past five years, government investigations have shut down several multimillion-dollar collection agencies in the region.
According to the state Labor Department, there are 156 collection agencies, with 3,432 employees, registered to do business in Erie and Niagara counties.
The lawsuit, filed against five people and two limited liability companies, alleges they used "spoofed" telephone numbers to make it look like they were calling from a person's local county courthouse.
In court papers filed Monday, prosecutors said they are seeking civil forfeiture of the money seized from Market Street Debt Partners.
Federal prosecutors have filed court documents alleging that debt collectors working for Miller used illegal scare tactics – including bogus threats of arrests and lawsuits – against people who owed debts.
The government probe is ongoing, but no criminal charges have been filed against Miller, his companies or anyone associated with Market Street Debt Partners.
Miller, 47, last week denied any wrongdoing in a brief interview with The Buffalo News, and his attorneys said he is seeking the return of the $90,385 taken from his Kenmore home.
Two attorneys for Miller, Cheryl Meyers Buth and Frank LoTempio III, said Miller denies any illegal activity.
Herbert L. Greenman, an attorney for Market Street, said his clients also deny any wrongdoing.
“My clients are legitimate businessmen whose only role was to process payments from Mr. Miller’s companies,” Greenman said. “The government has seized their money, but they were not involved with any bill collections done by Mr. Miller’s companies. They are being punished for things they had nothing to do with. I think this kind of action puts a chilling effect on legitimate payment processors.”
The state AG said several Amherst-based debt collection companies allegedly used illegal methods to demand payment of debts.
Market Street Debt Partners is owned by Jacob Torriere and his brother, Joseph Torriere, according to court papers.
Jacob Torriere declined to comment on the seizure and referred a reporter from The News to Greenman.
Prosecutors said they are investigating almost $2.8 million in transactions related to six debt collection firms run by Miller.
In court papers filed in connection with the seizure from Market Street Debt Partners’ bank account, prosecutor Grace M. Carducci said the Lockport company failed to follow legal standards required of financial institutions.
A Buffalo debt collector has been barred from the industry to settle allegations from the state and federal officials that he misled consumers about how much money they owed and then used illegal tactics to collect it. Robert Heidenreich, who controls six debt collection firms, agreed to pay $30,000 to the Federal Trade Commission as part of the settlement.
Market Street “disregarded” the fact that Miller’s debt collection business utilized numerous bank accounts held under various names and commingled money with his roofing business, according to Carducci’s court papers.
She also alleged that transactions involving wire fraud, conspiracy to commit wire fraud and money laundering were connected to Miller’s business dealings.
A former employee of Miller’s, Frank J. Morrocco, contacted The News to say he believes Miller may have been victimized by some unscrupulous people working for him.
“I worked for Mark and have known him for about eight years. He’s a class act ... a really good guy. The government has put a target on his back,” said Morrocco, an ex-convict. “I know Mark told his employees, including me, that all collections were to be done following the law ... But Mark was not a hands-on guy with his collection companies. He was not there when the calls were being made.”