Feds Arrest Two in Buffalo for Debt Collection Scam
The U.S. Attorney for the Western District of New York said Friday that two men had been running a fraudulent debt collection operation for four years that brought in $8 million.
The U.S. Attorney for the Western District of New York announced Friday that two men had been arrested and charged with various crimes in connection with debt collection activities that were ongoing since September 2005.
The U.S. Attorney’s office filed a criminal complaint Friday in U.S. District Court charging Timothy E. Arent and Neil G. Wieczkowski, both of Buffalo, N.Y., with mail fraud and conspiracy to commit mail fraud. Arent is also charged with bankruptcy fraud. The mail fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. The conspiracy and bankruptcy fraud charges each carry a maximum penalty of five years in prison and fine of $250,000.
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Assistant U.S. Attorney MaryEllen Kresse said the complaint alleges that, from September 2005 through the present, Arent and Wieczkowski were engaged in a fraudulent debt collection scheme in which they coerced monetary payments from their victims by means of false pretenses, false personation and false representations. The complaint states that the victims were individuals who at one time or another owed some type of debt that had gone into collection status.
According to the office, Arent and Wieczkowski falsely told their victims that the victims had failed to respond to summonses, which would result in their imminent arrest. It is further alleged that Arent and Wieczkowski told the victims that the only way they could avoid apprehension and detention by law enforcement was to make substantial monetary payments, usually in a matter of hours. The complaint also charges that the defendants tried to avoid detection by changing the names of their businesses up to 18 times, and by using mail drops and "virtual offices." Deposits into accounts used by the defendants' businesses during the scheme were more than $8 million.
The complaint also alleges that Arent filed for Chapter 7 bankruptcy relief in 2005, and that, during the proceedings, Arent fraudulently withheld information from the Bankruptcy Court. The complaint alleges that Arent failed to disclose to the Bankruptcy Court that he had bought a 4,700 square-foot residence in Buffalo worth $500,000 before the bankruptcy, and that, after filing for bankruptcy, he was actively engaged in debt collection work through two corporate entities. Arent's debts, as well as two civil judgments that had been filed against him concerning his pre-bankruptcy debt collection practices, were discharged by the bankruptcy court in 2006.
Arent and Wieczkowski appeared before Judge Scott Friday afternoon. Ms. Kresse moved for pretrial detention. Judge Scott granted the motion pending a detention hearing scheduled for October 6, 2009 at 2:00 pm EST.
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Comments
Comment from Uncl Lar on October 5, 2009 at 11:58AM EST
They will get what they deserve, I hope. Crud like this is what gives the vast professional majority a bad rap. I suppose this will go "viral" in the media real soon.
Comment from Anonymous on October 5, 2009 at 3:47PM EST
So the debtors are the innocent people now? It may be untruthful to make "claims" but the bare bone facts are; the people that were being called ARE DEBTORS. They owe MONEY, they spend BEYOND their means and you know you ends up paying if that money isn't collected? YOU
Comment from sd1950 on October 5, 2009 at 4:03PM EST
This story has already been in the media. Over a year ago I tried to alert authorities to these guys and I was ignored completely. Said because I did get ripped off nothing I could do. Wonder how much they ripped off from 3/08 until they were finally closed.
Comment from TheOwl on October 5, 2009 at 9:28PM EST
The bad news just keeps coming.
Comment from Receivables Management, Mohawk, NY on October 6, 2009 at 11:10AM EST
Bad apples for sure. In the minority, yes. But the media doesn't recognize that there are more good apples than bad. If they do, they certainly don't write about it.
There are those of us in the collection industry who treat debtors with respect and dignity. And there are more than a few instances when files are closed not because the debt was paid, but out of compassion for the debtor and their circumstances.
Debt collectors provide a much needed service. We help move the economy, an economy that would stall if people decided to spend and then not pay. At what point will the media stop perpetuating the stereotypes and tell the whole story?
Comment from Jim Stewart on October 6, 2009 at 12:04PM EST
I think these were the clowns that were the focus of the Date Line piece with Chris Hansen
Comment from Illlinois on October 7, 2009 at 4:09PM EST
"So the debtors are the innocent people now? It may be untruthful to make "claims" but the bare bone facts are; the people that were being called ARE DEBTORS. They owe MONEY, they spend BEYOND their means and you know you ends up paying if that money isn't collected? YOU"
Just to clarify-- all folks should pay their legitament debts. But we have to be a bit "real world." That is, a certain amount of "bad debt" is computed into the pricing of a loan product, and that pricing incurred by borrowers will not change if some time down the road a write-off is collected or not.