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A Tracy, California man is facing 20 year in prison after a grand jury indicted him on federal fraud charges. The man is accused of running a phantom debt collection scam.
Phantom debt collection is a scam where a group of individuals, posing as legitimate debt collectors, contact people and threaten them with legal action if they do not pay up. The frightened “debtors” are essentially badgered into making payments on debts they do not owe.
Jon Leibowitz, chairman of the Federal Trade Commission, told ABC News that phantom debt collection is new and alarmingly common. Scammers supposedly gather their list of victims from personal information given when financially strapped individuals go online to apply for payday loans. Leibowitz believes these scammers have succeeded in collecting millions of dollars from their victims.
The California man is accused of setting up a straw company in the state to process payments on these non-existent debts. The callers collecting the debts were situated in a call center in India. They recovered money by calling repeatedly, threatening to sue the “debtors” or contact their employers
The FTC became involved after receiving a flurry of complaints. They began following the calls and the money.
The case is far from a slam dunk. While there is evidence that the man set up the payment processing company, there is no indication that the man knew about scam being run out of India.
There are a number of ways in which this kind of fraud charges can be fought. In addition to challenging the evidence itself, there may be issues with how the evidence was obtained.
People who are facing white collar crime charges such as fraud may benefit from speaking with an experienced and aggressive San Bernardino and Riverside fraud defense lawyer.
Source: www.abcnews.com, “Fraud Charges Filed Against Alleged Scammer Seen on ‘Nightline’,” Matthew Mosk and Brian Ross, 23 August 2012
