Houston Man and His Father Head to Prison for Debt Relief Scam
|July 12, 2013|
HOUSTON - Nathaniel Chilo, aka Nathaniel O’Neil, 23 of Houston, has been sentenced to prison for his role in perpetuating a debt relief scam with his father, United States Attorney Kenneth Magidson announced today. Chilo pleaded guilty Sept. 21, 2012, admitting that between September 2009 and September 2010, he assisted his father, Jeffery Wayne O’Neil, 55, of Houston, in promoting a number of debt relief/elimination schemes to individuals throughout the United States.
Today, U.S. District Judge Ewing Werlein Jr., who accepted the guilty plea, handed Chilo and O’Neil respective sentences of 70 and 78 months. Chilo was ordered to pay restitution in the amount of $130,176.09, while his father will pay $661,980.95. Both will serve three years of supervised release following completion of their sentences. In handing down the sentence, Judge Werlein noted the plight of the victims, hard pressed by bankruptcy, credit card debt and out of jobs thinking that O’Neil was going to help them.
O’Neil admitted that between June 2005 and Sept. 7, 2010, he promoted a number of debt relief/elimination schemes to individuals throughout the United States. He operated various debt relief businesses in the Houston area under different names including, but not limited to, J. O’Neil/Associates Inc., World Outlook, World Outlook Management (WOM) and Universal Restoration, none of which were licensed by the Texas Office of Consumer Credit Commissioner, according to court documents.
O’Neil made numerous false representations to his “clients” and used a program called the “Debt Reconciliation Program” or “Debt Relief Program,” referred to as “DRP,” charging each client a percentage of debt as a fee for participating in the DRP. The basis of the DRP was that once a creditor cashed a check with an attached novation agreement from WOM, one of O’Neil’s businesses, the creditor was then allegedly agreeing to accept that novation agreement and look to only WOM for payment of the debt.
O’Neil admitted that in June 2009, he caused two individuals to send a cashier’s check to WOM by Federal Express to pay for their participation in the DRP and to also sign assignments of debt, assigning a credit card debt to WOM. He further caused one of these individuals to sign a novation agreement for that debt. O’Neil admitted that he fraudulently led these individuals to believe that by their signing the assignment of debt, execution of the novation agreement and their payment to WOM to participate in O’Neil’s DRP program their debt would be eliminated when it did not.
At the time of conviction in this case, Chilo admitted he knowingly made false representations to individuals seeking debt relief through various programs offered by Jeffery O’Neil. He further admitted that on Feb. 4, 2010, he filed an assumed name for a business by the name of Universal Restoration in Ft. Bend County which would allegedly provide relief from various types of debt. Chilo admitted he caused an individual on or about July 12, 2010, to wire transfer $5600 from that person’s bank account in Arizona to the bank account for Universal Restoration in Houston. The transfer was made as a result of Chilo’s representation that he had negotiated a settlement of a debt owed by that person to Navy Federal Credit Union. According to Chilo’s representation, this person was to pay 40% of the settlement amount and Universal Restoration would pay the remaining 60%. Chilo admitted he paid no money to Navy Federal Credit Union on that person’s behalf to settle the debt. Finally, Chilo admitted that the settlement offer he made was fraudulent and that Navy Federal Credit Union never authorized the settlement.
Chilo will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. O’Neil was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney John Braddock.