Consumer Finance Insights
November 1, 2016

CEO Pleads Guilty in Connection with Alleged $31 Million Debt Collection Scheme

On November 1, 2016, the U.S. Attorney’s Office for the Southern District of New York (U.S. Attorney) announced that the owner, president, and chief executive officer of a debt collection company pleaded guilty to orchestrating a scheme to coerce thousands of consumers across the country into making debt payments through false threats and representations.  This was the eleventh guilty plea entered in connection with the debt collection scheme.

According to the U.S. Attorney, the chief executive officer, among other things, approved and disseminated “scripts” for debt collection calls, in which employees falsely threatened consumers with arrest for nonpayment, and falsely represented that they were calling from an “arbitration firm” or a process server’s office to coerce consumers into making payments.  The U.S. Attorney estimates that the company collected more than $31 million from thousands of consumers across the country.  The chief executive officer pleaded guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison and three years of supervised release. Enforcement Watch previously covered the indictment here.