Chief Financial Officer And Manager Plead Guilty And Another Manager Sentenced In $31 Million Fraudulent Debt Collection Scheme
All 14 Defendants Have Now Pled Guilty in Largest Debt Collection Scheme Ever Prosecuted
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MAURICE SESSUM, the co-owner, chief financial officer, and chief operating officer of a Buffalo, New York-based debt collection company (the “Company”), pled guilty yesterday before Judge Katherine Polk Failla to orchestrating a scheme to coerce thousands of victims across the country, through false threats and representations, into paying a total of more than $31 million to the Company to resolve debts these victims purportedly owed. In addition, earlier today before Judge Faila, JIMMY STOKES, a Company manager, pled guilty, and TACOBY THOMAS, another Company manager, was sentenced to 70 months in prison for their respective roles in the scheme. All 14 defendants who were charged for their participation in this fraud have now pled guilty.
U.S. Attorney Preet Bharara said: “Now that all of the 14 defendants behind the largest debt collection scheme ever prosecuted have admitted their guilt, the process of restitution to the thousands of victims across the country can begin. Thanks to the dedicated work of our Office’s criminal investigators and the Federal Trade Commission, this so-called ‘business’ is no longer able to victimize consumers.”
According to the allegations contained in the Indictment and statements made during the plea proceedings and THOMAS’s sentencing proceeding:
Between 2010 and February 2015, SESSUM was the co-owner, chief financial officer, and chief operating officer of the Company. In that capacity, SESSUM, together with his co-defendant and co-owner, Travell Thomas, oversaw four debt collection offices operated by the Company in Buffalo and a team of managers and debt collectors. As part of the scheme, SESSUM and Travell Thomas falsely inflated the balances of debts owed by consumers in the Company’s debt collection software so that debt collectors could collect more money from the victims than the victims actually owed.
SESSUM approved debt collection scripts that contained a variety of misrepresentations and instructed his collectors to make those misrepresentations to consumers over the telephone. The Company’s debt collectors, in turn, attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats. Among other things, STOKES misrepresented to victims that he would have a bench warrant issued for their arrest, would contact the “county” to initiate legal proceedings, and was not calling from a collection agency. Among other things, THOMAS misrepresented to victims that he was a “process server” from “U.S. Couriers” with “legal documents” to serve on victims, that victims had committed “check fraud,” and that THOMAS was calling from an “arbitration firm.”
In total, from about January 2010 through November 2014, the Company collected over $31 million from thousands of victims across the United States. Of the money that the Company took in from victims, approximately $1.5 million was paid in cash to SESSUM and Travell Thomas, approximately $1.4 million was withdrawn from banks and ATMs, and tens of thousands of dollars were used to pay for SESSUM’s personal expenses.
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SESSUM, 40, of Buffalo, New York, and STOKES, 39, of Charlotte, North Carolina, each pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison and three years of supervised release. The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. SESSUM is scheduled to be sentenced by Judge Failla on March 1, 2017, at 3:00 p.m. STOKES is scheduled to be sentenced by Judge Failla on May 18, 2017.
In addition to his prison term, THOMAS, 34, of Buffalo, New York, was sentenced to three years of supervised release, and ordered to pay forfeiture in the amount of $896,605.03.
In total, 14 individuals associated with the Company have pled guilty to defrauding consumers as part of this debt collection scheme. In addition to SESSUM, STOKES, and THOMAS, co-owner and chief executive officer Travell Thomas, former Company mangers Heather Gasta, Mark Lavin, and John Salatino, and debt collectors Jessica Mann, Charles Starks, William Clark, Anthony Caba, Columbus Simmons, Michael Calandra, and Jennifer Sherk, each pled guilty to conspiracy to commit wire fraud.
Starks, Clark, Calandra, and Mann were sentenced by Judge Failla to prison terms of 37 months, 30 months, 15 months, and one year and one day, respectively. The sentencing of the other defendants who have pled guilty is pending.
Mr. Bharara praised the efforts of the Office’s Criminal Investigators and he thanked the Federal Trade Commission for its assistance in the case.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore, Jennifer L. Beidel, and Jordan L. Estes are in charge of the prosecution.