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A.G. Underwood Announces Joint Lawsuit With Federal Trade Commission To Shut Down Phantom Debt Collection Scheme

News from the New York Attorney General's Office

FOR IMMEDIATE RELEASE 
June 27, 2018

Attorney General's Office Press Office / 212-416-8060 
nyag.pressoffice@ag.ny.gov

A.G. UNDERWOOD ANNOUNCES JOINT LAWSUIT WITH FEDERAL TRADE COMMISSION TO SHUT DOWN PHANTOM DEBT COLLECTION SCHEME

Buffalo-Area Companies Allegedly Distributed and Collected On Debts Consumers Did Not Owe

BUFFALO – Attorney General Barbara D. Underwood today announced a joint lawsuit with the Federal Trade Commission (FTC) to stop the collection and distribution of “phantom debts” that consumers do not actually owe. The complaint alleges that Hylan Asset Management, LLC and its owner Andrew Shaevel, and Worldwide Processing Group, LLC and its owner Frank Ungaro Jr. violated New York State’s fair debt collection statute and laws prohibiting deceptive acts and practices, as well as the FTC Act. It also alleges that certain defendants violated the Fair Debt Collection Practices Act. The lawsuit seeks to permanently stop this illegal conduct and to obtain money to provide refunds to consumers.

“It’s unconscionable to collect on fake debts that consumers don’t actually owe in order to make a quick buck,” said Attorney General Underwood. “We’ll continue to work with our partners in government to hold these phantom debt collectors accountable.”

According to the complaint, Hylan and its owner, Andrew Shaevel, knew that certain debt portfolios the company owned contained fake debts that consumers did not owe. Shaevel received these purported debts from Joel Tucker and Hirsh Mohindra – known peddlers of phantom debt. Even though they knew the debts were fake, Hylan and Shaevel nonetheless allegedly placed these fraudulent debts with collection companies, who in turn illegally pursued consumers for payments.

Worldwide Processing Group, LLC, operating under the name “Forward Movement Recovery,” frequently collected on phantom debt that it received from Hylan. The complaint alleges that Worldwide, and its owner Frank Ungaro, Jr., knew the debts they were collecting on were fake, but collected on them anyway. Not only did Worldwide and Ungaro attempt to collect on debts that consumers did not owe, but they also threatened and harassed consumers to attempt to do so, in violation of state and federal laws.

This case is being handled by Assistant Attorney General Christopher L. Boyd of the Buffalo Regional Office with assistance from Karen Davis, Senior Consumer Fraud Representative and Investigator Erica Law. The Buffalo Regional office is led by Assistant Attorney General-in-Charge Michael Russo. The division of Regional Affairs is led by Executive Deputy Attorney General for Regional Affairs Marty Mack.