Commercial Debt Collection Scammer Sentenced to 8 Years in Federal Prison

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Prosecutors in Oregon announced Friday that a man involved in a long-running commercial debt collection scam has been sentenced to eight years in prison. His scam netted nearly $6 million over its run and counted nearly 700 victims.

The United States Attorney’s Office, District of Oregon said that Neil Warren Madison, Jr. was sentenced by the Honorable Robert E. Jones in United States District Court. Madison had pleaded guilty to conspiracy to commit mail and wire fraud and to mail fraud charges in December 2011.

According to the new release, between September 2001 and December 2009, Madison owned and operated three illegal commercial debt collection companies in Portland, Ore. and Orange County, Calif called MCO, Inc., Federal Summit Financial, Inc., and Parker Elliott, Inc. Madison’s businesses featured “boiler rooms” that employed anywhere from a few to about 20 employees who made hundreds of telephone calls per day to potential customers across the United States, Canada, and Mexico.

Madison and his employees promised prospective clients that for a 25 percent fee, they would collect business debts owed by debtor companies. After clients signed up for the B2B debt collection services, Madison and his employees collected funds by harassing, intimidating, and threatening debtors in telephone calls, emails, and letters. Once Madison collected the funds from debtors, he didn’t make remittances to his clients, and kept nearly all of the funds in order to support his lavish lifestyle that included the purchase of a Porsche and several other luxury vehicles, as well as a 32 ft. boat.

Attempts to contact Madison were unsuccessful.

Madison is scheduled to appear at a hearing in July to determine how much restitution he must pay. Judge Jones ordered Madison to report to a federal prison in September.

In March 2012, Casey Yarbrough, who had been part-owner of Federal Summit Financial, Inc., was sentenced to three years in federal prison for his role in the scam. Yarbourgh was ordered to report to prison on July 21, 2012, and to pay more than $61,000 in restitution.

The case was jointly investigated by the U.S. Postal Inspection Service, the Oregon Division of Finance and Corporate Securities, and the U.S. Secret Service, and prosecuted by Assistant United States Attorney Claire M. Fay.

 

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Posted in Collection Laws and Regulations, Commercial Debt Collection, Doing it Wrong, Featured Post .

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  • avatar Bill Lindala says:

    All that I can say is wow.

  • avatar Douglas Holmes says:

    Excellent…it’s about time this type of operation generated this type of result.

  • avatar JAN ARMAS says:

    Very happy to hear that Casey and Neil are finally caught, and will be in prison. It’s been a long time coming. My only hope is that we can recover some of the money that they took from my company.

  • avatar jackleg says:

    This is AWESOME! wish they would send the crook(s) operating in Plano,Richardson area with this guy!

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