Felony charges have been filed in New York against the owner of a debt collection company accused of targeting military personnel and harassing active members of the military and their families.
Charged is Stephanie Lowinger of Buffalo, owner and operator of Neimen, Rona & Associates -- formerly Morgan, Stone & Associates and now known as Gordon, Cappolli & Associates -- all of which are debt collection companies based in the Buffalo area.
In addition to the criminal charges, Attorney General Andrew M. Cuomo has filed a civil lawsuit seeking to shut down Lowinger's operation and secure restitution, penalties, and costs. The action is the latest in Cuomo's probe of illegal practices in the debt collection industry.
The investigation found that Lowinger specifically targeted military personnel, referring to their alleged debts as "special accounts." Lowinger instructed employees to find out where the military members were stationed and identify their commanding officers, according to the charges, and had employees threaten to call and -- in some cases -- actually did call the commanding officers, both of which are illegal debt collection tactics.
According to a former employee, Lowinger also contacted the military personnel's family members in order to compel them to pay -- another illegal tactic. In addition, the investigation found that Lowinger falsely told military members or their families that she worked for the Department of Justice and illegally demanded immediate payment. She allegedly said that if payment were not made immediately, the active duty family member would be arrested by the military police and would face a dishonorable discharge.
"This individual is accused of operating her businesses in a lawless fashion, instructing her collectors to do anything necessary to collect on an alleged debt -- even if it meant harassing and threatening members of the military and their families," said Cuomo. "We will continue to investigate debt collectors who try to take advantage of unsuspecting individuals facing hard economic times and we will bring them to justice."
Other chargesAmong the allegations detailed in Attorney General Cuomo's court papers, Lowinger and her collectors:
Falsely claimed to be lawyers, investigators, detectives, and mediators
Threatened consumers with arrest, jail, and lawsuits
Threatened to seize the assets of consumers
Inflated the amount allegedly owed
Attempted to collect debts from consumers not knowing if the consumer actually owed the debt
Targeted family members of consumers, wrongfully disclosing the existence of alleged debts to family members, and attempted to collect the alleged debts from family members
Harassed consumers through repeated and constant calls, using abusive language
Levied unauthorized charges on the credit card accounts of consumers
On the move
According to court papers, Lowinger operated Morgan, Stone & Associates out of 1211 Hertel Avenue in Buffalo beginning in May 2009. After complaints began to rolling in, she shut down and then reopened as Neimen, Rona & Associates using the same address, contact information, and even the same logo.
In the fall of 2009, Lowinger moved Neimen, Rona & Associates to 255 Great Arrow Avenue, and in August 2010, changed her business name to Gordon, Cappolli & Associates. Despite the appearance of being different companies, all three firms are controlled by Lowinger.
The AG's Office, the Federal Trade Commission (FTC), and the Better Business Bureau (BBB) have received dozens of complaints regarding violations of law by the Lowinger operation. The BBB has given Lowinger's businesses an "F" rating.
Cuomo's lawsuit seeks to shut down Lowinger's debt collection businesses permanently and require restitution to those defrauded, as well as penalties and costs to the state. Lowinger and her companies are charged with Scheme to Defraud in the First Degree (class E felony), which carries a maximum penalty of four years in prison.
Vulnerable to abuse
Military service members can be vulnerable targets for abusive debt collection practices since their status, rank, or security clearance can be adversely affected. Complaints already received and evidence uncovered during Cuomo's investigation show that military service members and their families were subjected to wrongful practices, including:
Unauthorized calls to commanding officers
Threats of arrest by military police
Threats of a dishonorable discharge
Threats of loss of security status
Threats of court martial
While military personnel may be easy targets for these types of operations, they aren't the only ones.
Cynthia of Fresno, CA, complains of abusive tactics by Allied Interstate. "This company has been calling my in-laws trying to track me down for what they claimed was an unpaid credit card debt," she writes ConsumerAffairs.com. "I know I don't have any unpaid debts, so we checked my credit reports to make sure no one had taken out a credit card in my name. Nothing on any of the three major agencies. So we then called the company to talk to them. They made the claim again and were very rude and intimidating even after we told them they were mistaken."
"I received a letter from Midland Credit Management (MCM)requesting a settlement on an account with Citibank USA," says Lucile of Miami, FL. "I have never had an account with Citibank in my entire life! MCM made an offer to settle this balance by using an Acceptance Certificate requesting that I enclose a check for $2,567.60 for a debt reported in the amount of $10,270.39, which I have never incurred. I consider this a form of fraud and harassment as well as damaging my good name!"
There's a Website available to consumers who wish to learn more. It explains consumers' rights, gives victims of abusive debt collection and debt settlement companies quick access to the Attorney General's Office to file complaints and outlines the stages of the investigation.