A.G. Schneiderman Announces Actions Against A Rash Of Buffalo-based Debt Collector Scams
Area Debt Collectors Preyed on Vulnerable Military Personnel & Consumers
Schneiderman: This is a Warning for Others to Play by the Rules or be Stripped of the Privilege of Doing Business in New York State
BUFFALO - Attorney General Eric T. Schneiderman today announced a series of actions against Buffalo-area debt collectors who preyed on military personnel and vulnerable consumers. These included the conviction of a debt collector, the banning of an attorney from the debt collection business, and settlements with three other Buffalo-based debt collectors who threatened consumers, made false representations, and improperly called consumers at their places of employment.
"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."
Schneiderman announced the following actions today:
- Stephanie Lowinger, pleaded guilty to Scheme to Defraud in the 2nd Degree, a Misdemeanor. She is also permanently banned from engaging in any debt collection activities in New York State. Lowinger, owned and operated Neiman, Rona & Associates, formerly Morgan Stone & Associates and later known as Gordon, Cappolli and Associates, all debt collection companies based in the Buffalo area.
This investigation found that Lowinger 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.
Lowinger and her debt collectors falsely claimed to be lawyers, harassed consumers through repeated calls and abusive language, inflated the amount allegedly owned by debtor and levied unauthorized charges on the credit card accounts of consumers.
- 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. The debt collectors compounded that deception by falsely telling consumers a lawsuit was about to be filed, police were going to be sent to their homes, and property would be seized.
- John Nicolia, Santiago's attorney, is permanently banned from any debt collection activities and must pay a civil penalty of $20,000. The investigation showed that Santiago paid Nicolia a retainer but Nicolia provided few legal services of note. The investigation further showed that Nicolia was aware that Santiago's debt collectors were using his name to threaten and intimidate consumers.
The investigation of Santiago and Nicolia further showed that Nicolia and/or Santiago’s companies had been sued on more than 33 occasions in 16 states for violating state and federal debt collection law. In addition, dozens of similar complaints have been filed against Santiago and Nicolia with state law enforcement agencies, the Federal Trade Commission and the Better Business Bureau.
- 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.
The lawsuits and complaints allege that the Cerrone Companies improperly called consumers at their places of employment, threatened consumers with arrest, imprisonment, garnishment of wages, and freezing bank accounts.
This civil cases were handled by Assistant Attorney General James Morrissey and Senior Consumer Fraud Representative Karen Davis of the Attorney General's Buffalo Regional Office under the supervision of Acting Assistant Attorney General in Charge of the Buffalo Regional office Michael Russo. The criminal case against Stephanie Lowinger was handled by Assistant Attorney General Paul McCarthy, under the supervision of Criminal Prosecutions Bureau Chief, Gail Heatherly.