A Georgia debt-collection company is the target of an investigation into tactics that federal prosecutors say were used to defraud more than 6,000 victims around the U.S. of millions of dollars.
Williams Scott & Associates LLC intimidated people into paying more than they owed, sometimes by threatening arrest or saying it was working for the U.S. Justice Department, according to a criminal complaint in Manhattan federal court.
From around 2009 to April 2014, employees of Williams Scott extracted about $4.1 million in payments for purported debts, according to the complaint. Manhattan U.S. Attorney Preet Bharara announced the arrest of the company’s owner and six employees today.
“After years of threatening false arrest, these defendants are the ones who now find themselves in handcuffs, facing the loss of their own liberty,” Bharara said in a statement. “We are far from finished looking at the seedy side of debt collection.”
The charges add to mounting efforts to clamp down on alleged debt-collection fraud. In July, the Consumer Financial Protection Bureau sued a Georgia law firm, accusing it of using litigation to intimidate people into paying debts.
A proposed class action is pending in New York federal court against a New Jersey, law firmalleging that it fraudulently collected millions of dollars by suing thousands of low-income New Yorkers over unpaid phone bills.
Williams Scott employees relied on scripts to guide phone calls with victims, according to the complaint. The scripts instructed callers to say failure to pay would lead to criminal charges, the suspension of a driver’s license or arrest, prosecutors said.
The firm often said it was working with made-up agencies, such as the “Federal Government Task Force,” and used legal jargon to bolster its legitimacy, according to the complaint.
“The US Dept. of Justice has received notice from the National Crime Information Center to issue an alert on a SSN ending in __________,” reads one script cited in the complaint. “For an opportunity to resolve this matter outside of court contact Williams Scott Bureau of Investigations.”
Another script mentioned in the complaint is more specific: “If the individual does not want to pay: ‘ARE YOU FIMILAR [sic] WITH THE LAW IN ___ COUNTY ABOUT WRITING A BAD CHECK ……… THEN GIVE THEM 48 HOURS TO PAY THEN SLAM THE PHONE IN THERE [sic] FACE!!!!’’
Successful employees were paid 30 percent of the actual amount owed, and 40 percent of anything collected beyond that, according to the complaint.
The company shut down in May after the Federal Bureau of Investigation searched its offices and found evidence of fraudulent collection techniques, according to the complaint. In July, the firm’s owner registered another debt collection company, this one in California, that uses many of the same tactics, according to the complaint.
The case is U.S. v. Williams Scott & Associates LLC, 14-mag-2546, U.S. District Court, Southern District of New York (Manhattan).