DEBRA W. YANG
United States Attorney
Central District of California
Thom Mrozek, Public Affairs Officer
January 19, 2005
FLORIDA MAN SENTENCED TO SEVEN YEARS IN PRISON
IN SCHEME THAT DEFRAUDED BUSINESSES ACROSS THE NATION
A Florida man has been sentenced to 84 months in federal prison for running a scam in which he fraudulently promised to collect delinquent accounts receivable for businesses across the country.
Ronald S. Stern, 57, of Sunrise, Florida, was sentenced Tuesday afternoon by United States District Judge Gary A. Feess in Los Angeles. In addition to the prison term, Judge Feess ordered Stern to pay nearly $1.9 million, which is full restitution to the 11 businesses and 18 individuals who lost money because of his scheme.
Stern operated a Fort Lauderdale-based collection agency under the names Whitman Credit Consultants, Inc; Whitman Credit Services; and Commercial Consultants International, Inc. Through his company, Stern promised prospective clients that he would collect their delinquent accounts receivable for a fee. Stern solicited clients by saying he would keep only a small percentage of the delinquent account. However, when Stern collected the delinquent monies, he kept the funds for himself.
Stern also charged clients for fictitious collection efforts, including the filing of lawsuits which he never brought. Stern fraudulently obtained additional money from the victim companies' bank accounts by misappropriating identifying information and using fraudulent authorizations to obtain loans and transfers from those bank accounts.
Although Stern operated out of southern Florida, his victims were spread across the nation. Victim companies in California were based in Compton, Cerritos, and San Jose. In addition to the California victims, Stern's corporate victims included manufacturers, distributors, retailers, banks, casinos and employment agencies located in Florida, Alabama, Utah, Nevada, Colorado, Ohio and the Bahamas. Additionally, dozens of businesses that owed money and paid money to Stern never received credit for their payments because Stern simply pocketed the money.
Stern also lured individuals to work for his company by falsely promising to pay them lavish salaries and provide generous benefits. These individuals often left other employment to take the job with Stern, only to discover that he had no intention of paying them the amounts he had offered.
Stern was originally arrested at a friend's house in Boyton Beach, Florida, on November 6, 2003. After being released on bond several days later, he began committing the same crimes again. He was rearrested April 6, 2004, and has been in custody since then.
Stern pleaded guilty on July 19, 2004 to eight charges, including mail fraud, wire fraud and money-laundering.
At yesterday's sentencing hearing, Judge Feess condemned Stern's conduct as a "calculated, deliberate scheme victimizing a wide variety of people," including Stern's own employees and a "diverse group of businesses."
Stern's office manager, Fran Ronnie Hayes, who was also charged in this case and pleaded guilty, died before being sentenced.
This case was jointly investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation Division and the United States Postal Inspection Service.
Release No. 05-012
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