Ring Leader Pleads Guilty In Debt Collection Scheme
CONTACT: Barbara Burns
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BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today Joseph Ciffa, 49, of Grand Island, NY, pleaded guilty to conspiracy to commit wire fraud and filing a false tax return before U.S. District Judge Richard J. Arcara. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that Ciffa has been involved in the debt collection business since at least 2013. Since early 2015, the defendant ran, and conspired with others to run, an illegitimate debt collection business, operating out of multiple locations, which included: 1625 Buffalo Avenue in Niagara Falls, NY; 870 Ontario Street and 1567 Military Road, both in Kenmore, NY; and out of his home office on Grand Island.
The operation utilized fraudulent means to collect debts, to recollect on debts already collected, to over-collect on debts actually owed, and to process and transfer payments related to the collection of such debts. Debt collectors made threatening statements over the telephone to debtors in an effort to induce payment of debts. Those statements included reference to criminal statutes, and the filing of criminal complaints and/or warrants. In order to intimidate debtors and induce payment, debtors were routinely routed to employees who posed as attorneys during the calls.
Between January 2015, and December 2016, the defendant’s operation collected approximately $3,061,205 from victims.
Ciffa also filed a false tax return for the tax year 2015, underreporting his business income, thereby avoiding a total tax liability of approximately $15,651.
In addition, as part of the plea, the defendant admitted that in 2016, he committed fraud involving Medicaid benefits. Ciffa lied in an application to the Erie County Department of Social Services, by under-reporting his income, in order to obtain benefits for himself and his children.
Ciffa was charged along with five others defendants and is the first to be convicted. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
“The defendant sought to enrich himself by preying on those who were in debt and by fraudulently acquiring for his own use benefits that were intended for the less fortunate of our society,” stated U.S. Attorney Kennedy. “As this plea demonstrates, this Office remains committed to protecting the vulnerable and to bringing to justice those who seek to cheat the system.”
“Ciffa used threats to collect on debts, even on debts that were already paid,” said Kevin Kelly, Special Agent-in-Charge of HSI Buffalo. “This man preyed on the vulnerabilities of others, and HSI, along with its law enforcement partners, will continue joint investigations to stop others from using the same corrupt scheme.”
"Today's plea shows that people who file returns and do not report all of their income will be held accountable for their deceit," said IRS Criminal Investigation Special Agent- in-Charge James D. Robnett. "IRS Criminal Investigation, together with the Department of Justice will continue to investigate and prosecute those who violate our tax system."
"This defendant's myriad of embezzlement schemes knew no bounds,” said New York State Inspector General Catherine Leahy Scott. “He preyed on taxpayers through a brazen fraud enabling him to steal government health care benefits to which he was not entitled, and which were meant only for those truly in need. Today's plea is the result of an investigation and prosecution culminated through a successful partnership between State and federal law enforcement agencies. I will continue to aggressively investigate these cases and protect New Yorkers from such egregious fraud and abuse."
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special-Agent-in-Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge James D. Robnett; the United States Postal Service Inspection Service, under the direction of Acting Inspector-in-Charge Raymond Moss; and the New York State, Office of Inspector General, under the direction of Inspector General Catherine Leahy Scott.
Sentencing is scheduled for May 24, 2018, at 12:30 p.m. before Judge Arcara.