New York AG Announces Actions Against Buffalo Debt Collectors

New York Attorney General Eric T. Schneiderman announced Friday a series of actions against accounts receivable management companies operating out of Buffalo, including the banning of one attorney from debt collection and a conviction in a case against a separate collection agency.

Schneiderman said that his office had secured a guilty plea from Stephanie Lowinger, owner of Neiman, Rona & Associates, formerly Morgan Stone & Associates and later known as Gordon, Cappolli and Associates, all debt collection companies based in the Buffalo area. Lowinger pleaded guilty to Scheme to Defraud in the 2nd Degree, a Misdemeanor.

The AG’s office said that Lowinger’s company specifically targeted military personnel, referring to their alleged debts as “special accounts.” Investigators discovered Lowinger said that if payment was not made immediately, the active duty family member would be arrested by the military police and would face a dishonorable discharge.

Schneiderman also announced that Frank Santiago, owner of Eastern Asset Management and Northern Asset Management, must pay $60,000 in civil penalties and significantly reform his debt collection practices. The Attorney General’s investigation revealed that Santiago’s collectors used an attorney’s name, John Nicolia, to threaten consumers with legal action even though Nicolia had never actually sued a debtor. Nicolia is permanently banned from any debt collection activities and must also pay a civil penalty of $20,000.

Former New York Attorney General Andrew Cuomo, now Governor of New York, initially filed the action against Santiago last year (“NY AG Cuomo Files Lawsuit to Shut Down Another Debt Collector,” June 2, 2010).

The AG noted that he wanted the announcement to serve as “a warning for others to play by the rules or be stripped of the privilege of doing business in New York State.”

“These individuals preyed on vulnerable consumers and military personnel who were already struggling financially, by using scare and intimidation tactics,” said Attorney General Schneiderman. “Today’s settlements send a strong message that this office will not tolerate collectors intimidating consumers, or attorneys improperly lending their names to debt collectors.”

The announcement also noted that Richard & Peggy Cerrone are required to pay $85,000 in penalties and must take significant steps to clean up their business practices. Richard Cerrone owns and operates the Southern Tier Agency, Inc., Check & Credit Reporting, Inc., and Credit & Check Filing, Inc. Peggy Cerrone owns and operates the Cornerstone Resolution Group, Inc. The Investigation revealed the Cerrone companies repeatedly violated the Federal Fair Debt Collection Practices Act. On more than 30 occasions consumers have filed suit against the Cerrone companies. Moreover, consumers have submitted more than 200 complaints to the Federal Trade Commission, the Better Business Bureau, and the OAG against the Cerrones companies.