Current Weather
The Spy FM

Feds Say Debt Settlement Firm Defrauded ‘Financially Desperate’

Filed by KOSU News in US News.
May 7, 2013

The Consumer Financial Protection Bureau, the federal oversight agency established by Dodd-Frank three years ago, has filed its first criminal action against a debt-settlement company it says defrauded thousands of people.

According to the indictment filed in U.S. District Court in Manhattan, Mission Settlement Agency, its manager and three employees have been charged with mail and wire fraud. Prosecutors say the defendants “systematically exploited and defrauded” their clients, who were seeking to settle credit card and other debt.

The debt-collection firm preyed on the “financial desperation of individuals struggling to pay their credit card debts” by “falsely and fraudulently” tricking them, the indictment said.

On Mission Settlement’s website, the company says it was “founded to help people regain control of their personal finance” and claims to take “an honest, informational approach to helping people find the best solution to their debt problems.”

The indictment says that from mid-2009 to March of this year, some 2,200 customers paid about $14 million for Mission Settlement’s services but that only $4.4 million went to creditors — the rest was kept by the company as fees. The company further took fees of $2.2 million from more than 1,200 customers and, according to the indictment, “never paid a single penny” to creditors.

Prosecutors say manager Michael Levitis, who was named as a defendant, used customer money to pay expenses for a restaurant-nightclub he owned and leases for two luxury Mercedes-Benzes, according to Reuters.

Bloomberg says:

“Mission and its employees lied about its fees, taking thousands of dollars from funds that its customers had set aside because they believed the money would be used to pay creditors, according to the indictment. For the majority of customers, Mission did little or no work and failed to reduce debt, prosecutors said.”

[Copyright 2013 NPR]

Leave a Reply

5PM to 7PM A Prairie Home Companion

A Prairie Home Companion

Live every Saturday night, A Prairie Home Companion features comedy sketches, music and Garrison Keillor's signature monologue, "The News from Lake Wobegon."

Listen Live Now!

7PM to 8PM Folk Salad

Folk Salad

Folk Salad Hosts Richard Higgs and Scott Aycock play an eclectic mix of Folk, Singer/songwriter, Americana, Bluegrass, Blues, Red Dirt, and anything else we happen to like that week.

View the program guide!

8PM to 9PM For the Sake of the Song

For the Sake of the Song

Greg Johnson, owner of The Blue Door in Oklahoma City gathers the best Red Dirt musicians in the region for his show.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center