Tags: debt | referral | indictment | CFPB

Debt-Settlement Firm Charged in First CFPB Criminal Referral

Tuesday, 07 May 2013 01:44 PM

A debt-settlement company was accused by the U.S. of defrauding more than 1,200 people struggling with credit-card debt, in the first criminal referral from the Consumer Financial Protection Bureau.

Manhattan U.S. Attorney Preet Bharara’s office announced the unsealing of an indictment against Mission Settlement Agency, its manager, Michael Levitis, and three employees. Prosecutors said the defendants “systematically exploited and defrauded” people across the country.

“Preying upon the financial desperation of individuals struggling to pay their credit card debts, the defendants falsely and fraudulently tricked over a thousand such individuals into becoming Mission’s customer with significant, but false, assurances about Mission’s ability to help,” according to the indictment.

The case against Mission is the first criminal referral from the CFPB, according to the U.S. attorney’s office. In December, a Florida debt-relief company, Payday Loan Debt Solution Inc., was ordered to pay as much as $100,000 in refunds to customers under the first joint enforcement action between the agency and states.

No Work

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.

Levitis spent money from Mission on the expenses of a nightclub he controlled, lease payments for two Mercedes-Benz cars and credit-card bills for his mother, according to the indictment.

A woman who answered the phone at the number listed on Mission’s website declined to comment on the charges. The company operated out of offices in Manhattan and Brooklyn, according to the indictment.

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