Friday, May 24, 2013

NY Lawyer Peddling Debt Relief Services Becomes First To Ever Be Criminally Prosecuted On Charges Stemming From CFPB Referral

In New York City, The Blog of LegalTimes reports:

  • The Consumer Financial Protection Bureau [] filed suit against two lawyers and two debt relief companies, alleging they charged thousands of consumers illegal advance fees and left some worse off financially.

    One of the lawyers, Michael Levitis, also faces mail and wire fraud charges brought by the Manhattan U.S. Attorney’s office - the first-ever criminal charges stemming from a CFPB referral.

    Brooklyn-based Levitis and his company, Mission Settlement Agency, as well as New Jersey lawyer Michael Lupolover and Premier Consulting Group, allegedly sold debt-relief services to consumers, promising to renegotiate or settle their debts, according to the complaint filed in U.S. District Court for the Southern District of New York.

    But the CFPB said the defendants illegally paid themselves first, with Mission and Levitis collecting $1.1 million up-front fees; Lupolover allegedly taking in $112,000 and Premier collecting $188,000. The Federal Trade Commission’s Telemarketing Sales Rule makes it illegal for debt relief providers to collect fees until at least one successful result has been achieved for the consumer.

    The Manhattan U.S. Attorney’s Office provided additional details, reporting that Mission had approximately 2,200 customers who paid a total of nearly $14 million for debt settlement services. Of these funds, Mission allegedly took more than $6.6 million in fees, while paying just $4.4 million to customers’ creditors.
For more, see CFPB Charges Two Lawyers in Debt Relief Scam.

For the U.S. Attorney press release and links to the formal charging documents, see Manhattan U.S. Attorney Charges Debt Settlement Company And Six Individuals For Multi-Million Dollar Scheme That Targeted Debt-Ridden Consumers (Two Former Employees of the Debt Settlement Company Have Already Pled Guilty; First-Ever Criminal Charges Based on Consumer Financial Protection Bureau Referral).

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