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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of North Carolina

FOR IMMEDIATE RELEASE
Monday, July 24, 2017

Five Members Of Fraudulent Debt Collection Company Are Sentenced To Prison

CHARLOTTE, N.C. – Five members of a fraudulent debt collection scheme, including the company’s owner and operator, were sentenced today by U.S. District Judge Robert J. Conrad, Jr., to sentences ranging from 42 to 18 months, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina joins U.S. Attorney Rose in making today’s announcement.

Cedrick Clark, 36, of Concord, N.C. was sentenced to 42 months; Michael Boughner, 49, of Charlotte, was sentenced to 41 months; Cynthia Martinez, 37, of Charlotte, was sentenced to 36 months; Felicia Shaw, 46, of Gastonia, was sentenced to 24 months; and Humberto Gonzalez, 31, of Charlotte, was sentenced to 18 months. In addition to the prison terms imposed, each defendant was ordered to serve three years of supervised release. A sixth co-defendant, Benjamin Murray, 28, of Charlotte, is currently awaiting sentencing.

According to information contained in filed court documents and today’s sentencing hearings, Clark was the sole owner, operator, and leader of the fraudulent debt collection company operating as Capital Solutions Agency, and/or Berkeley Hughes and Associates, and/or the Vortex Group, collectively “BHA.” Clarks’ five co-conspirators, Boughner, Martinez, Murray, Shaw and Gonzalez served as both collectors and team leaders or supervisors.

According to court records, from November 2011 through May 2015, BHA operated in Mecklenburg County and allegedly defrauded thousands of debtors throughout the United States of approximately $6 million. Using a number of interconnected fraudulent debt collection companies, the co-conspirators executed their scheme to defraud by coercing purported debtors to pay money, some of which was not even owed, by providing false information and using harassing and abusive tactics.

Court documents indicate that BHA’s collectors used prepared scripts that contained false and misleading information designed to scare targeted victims into paying monies, including threats to bring criminal charges if the purported debtor did not pay his/her debt by the end of the telephone call. According to court documents and today’s sentencing hearings, false statements made included telling purported debtors that the company’s systems were “integrated with the court system” and that criminal charges would be filed in specific county courts.

Court documents show that to evade detection, disguise the fraudulent nature of the scheme and to scare their victims into paying, the collectors changed the name or the nature of the business from which they were purportedly calling. In some instances, the collectors falsely represented that they were law firms, that they had attorneys on staff to consult, and/or that the collectors themselves were attorneys. In other instances, they falsely represented themselves to be members of law enforcement, and even played a police scanner in the background. In addition, filed court documents and statements made in court today indicate that BHA collectors often engaged in other scare tactics to fraudulently induce victims into paying the alleged debts, including harassing family members, including their children, and friends and calling places of employment purportedly regarding service of process.

In handing down today’s sentences, Judge Conrad characterized the defendants’ conduct as “reprehensible,” noting that they were “targeting desperate debtors” and using “brutal tactics involving threats of jail” and “bullying techniques.” Judge Conrad further noted the “predatory” nature of the conduct defendants engaged in and the “serious, heinous nature of the circumstances of the offense.”

 

Each of the six defendants previously pleaded guilty to one count of engaging in a fraudulent debt collection conspiracy to commit mail and wire fraud. Clark pleaded guilty to an additional count of money laundering. The five defendants sentenced today will be ordered to report to the Federal Bureau of Prisons upon designation of federal facilities. All federal sentences are served without the possibility of parole.

 

In making today’s announcement, U.S. Attorney Rose commended the FBI for leading the investigation.

 

Assistant United States Attorney Maria K. Vento, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

Updated July 24, 2017