Money From Debt Elimination Services Fraud Scheme Successfully Forfeited And Returned To Victim
For Immediate Release
U.S. Attorney's Office, Western District of Michigan
“Scams, including fraudulent promises to eliminate debt, are everywhere and can financially ruin unsuspecting victims. Be aware: if something sounds too good to be true, it’s probably a scam,” said U.S. Attorney Totten. “Thankfully, due to the hard work of the FBI, the fraud in this case was detected quickly and all lost funds were returned to the victim. Working with our law enforcement partners, we will continue to use every available tool to ensure fraudsters don’t benefit from their crimes.”
Criminal organizations engage in a variety of scams with the intention of convincing unwitting victims to send money to locations or bank accounts based in the United States or overseas. One type of scam involves purported debt elimination services, where the fraudsters offer to pay off the victim’s debt obligations for an upfront fee that is considerably less than the underlying debt. The fraudsters induce the victims by paying off small increments of debt in the beginning to gain trust, and eventually, the victims pay larger upfront fees while the underlying debt remains unpaid.
“The victim in this case lost more than $79,000 in a debt elimination scam, one of many types of scams criminals use to separate people from their hard-earned money,” said James A. Tarasca, Special Agent in Charge of the FBI in Michigan. “The return of those funds would not have been achievable without the cooperative efforts of FBI agents and federal prosecutors in the Western District of Michigan. Forfeiture of ill-gotten gains not only takes money from criminals, but it is among our most powerful tools to make victims whole.”
According to allegations contained in the civil forfeiture complaint filed in U.S. District Court (attached), in September 2021, fraudsters contacted the victim by phone, offering a debt elimination service, which was a scam. Throughout the scam, the victim made upfront “fee payments” that totaled $79,760, while the victim’s underlying debt was never paid off. Following an investigation, these fraud proceeds were seized by the FBI from various bank accounts, forfeited to the United States, and ultimately returned to the victim.
The U.S. Attorney’s Office continues to combat financial fraud schemes against vulnerable victims, including the elderly, by expanding efforts to investigate and promote coordination with law enforcement partners, and by seizing fraud proceeds through federal forfeiture laws.
In addition to debt elimination service fraud, some well-known examples of financial scams targeting seniors and other vulnerable populations are:
- Lottery phone scams: fraudsters persuade victims that a large fee or tax must be paid before they can receive lottery winnings.
- Grandparent scams: fraudsters convince elderly victims that their grandchildren are in trouble and need money to pay rent, repair a car, or make bail.
- Romance scams: scammers lull victims into believing that they are in a romantic relationship and that the scammers need money to travel to the U.S. or for some other seemingly legitimate purpose.
- IRS or government imposter scams: fraudsters pose as IRS or other government officials that claim the victims owe the government money.
- Sham business opportunities: fraudsters convince victims to invest in lucrative business opportunities or investments.
To avoid falling victim to financial scams:
- Don’t share personal information with anyone you don’t know.
- Don’t send money or pay upfront fees to obtain some greater financial benefit down the road. Remember, it’s not rude to say, “No.”
- If you are unsure about contact you receive from a potential fraudster, take the time to talk to a trusted family member or friend before you do anything.
If you have been contacted by a fraudster, or believe you have fallen victim to a scam, please file a report with the Justice Department’s Elder Fraud Hotline at 1-833-Fraud-11, the Federal Trade Commission (FTC) via their website or by calling 877-FTC-HELP, or the FBI, for law enforcement action, at https://tips.fbi.gov/.
Updated April 3, 2023