DA Says Collection Scam Netted Two New Yorkers $1.6 Million

The Manhattan District Attorney charged two New York City men with collecting more than $1.6 million on behalf of clients but failing to remit any of the money collected over the course of six years.

In a press release issued Friday, Manhattan District Attorney Robert M. Morgenthau said that 73 year-old Lionel Fuhrman and 43 year-old Steven King used more than a half-dozen different aliases and company names to target local businesses for collection contracts. After the businesses turned over their debtor records, they typically never heard from the defendants again, according to Morgenthau.

The DA’s office charged the two men with conspiracy to defraud, grand larceny and possession of stolen property. Both pleaded not guilty at an arraignment in New York Thursday, according to the Associated Press.

Morgenthau said that Fuhrman and King used the business name Levy Fitzgerald & Associates or Levy Fitzgerald Inc. from 2001 to 2004 and ripped off more than 100 clients. During that time, the DA’s office said the pair pocketed nearly $1.2 million in collections without ever paying their clients.

The pair allegedly operated from small offices in Manhattan using telephone and fax solicitations to drum up business. When clients began to ask about the status of the debts, the two disconnected their phone lines and started over in a new location.

Fuhrman is alleged to have also operated on his own from 2005 to July 2007, soliciting business under the names Harris & Klein, Solomon & Bailey Inc., Ross, Hollander & Associates, Inc., Michael Roberts & Associates and Collection Solutions. Morgenthau said that Fuhrman racked up an additional $400,000 in fraudulent collections in that time.

The DA’s Special Prosecutions Bureau began investigating the pair after receiving complaints from local businesses.