05/08/2013 05:30 pm ET Updated Dec 06, 2017

Debt Settlement Company Leader and Employees Facing Jail Time

Yesterday the Manhattan U.S. Attorney took steps to criminally charge the leader and employees of a debt settlement company for harming consumers that were trying to get out of debt.

The Consumer Financial Protection Bureau (CFPB) filed civil charges as well and named two attorneys in the claimed "fraudulent scheme" to charge illegal debt relief fees.

CFPB Direct Richard Cordray said the action against Mission Settlement Agency was necessary because the companies named were involved in "operations we believe are designed to profit through unscrupulous and illegal business practices."

Manhattan U.S. Attorney Preet Bharara said, "As alleged, Mission preyed upon the financial desperation of people around the country who - like so many ordinary Americans - were simply struggling to pay down their debts after the financial downturn. But the true mission of Mission turned out to be fraud and deceit, and for more than 1,200 consumers, the dream of debt relief turned into a nightmare of deeper debt trouble. Today's case is a harbinger of an especially potent partnership between this Office and the CFPB that will benefit hardworking Americans everywhere."

USPIS Inspector-in-Charge Philip Bartlett said: "Postal Inspectors are ever vigilant in bringing to justice individuals who use the U.S. Mail to defraud and otherwise take advantage of the financial circumstances of innocent consumers."

Of concern was a debt relief industry practice of not being open or truthful with consumers about the true performance and success rate of the approach sold. This obfuscation of pertinent facts is not unique to the debt settlement industry but nonprofit credit counselors have been silent about supplying proof of the effectiveness of their programs as well.

The CFPB action named Mission Settlement Agency, Mission Abstract, Michael Levitis, Law Office of Michael Levitis, Premier Consulting Group, and Law Office of Michael Lupolover as defendants.

The U.S. Attorney Indictment named Mission Settlement Agency, Mission Abstract, LLC, Alpha Debt Settlement, Michael Levitis, Denis Kurlyand, Boris Schulman, Manuel Cruz, and James Leon.

Two of the employees of Mission Debt Settlement have already pled guilty.

The underlying problems in the action and allegations include: not being truthful about the fees charged, lying about results obtained, taking money from consumers that was illegal to charge, pretending to be part of a government program, not being forthcoming in the risks of participating in their debt relief program.

In addition, since at least July 2011, Mission and Levitis committed deceptive and unfair acts and practices causing substantial financial injury to consumers. Specifically, they misled consumers, impersonated a government agency, and gave false statements regarding fees for Mission's debt-relief service. Instead of being applied towards repayment of consumers' debts, a large percentage of the amounts that consumers paid into Mission's debt-relief services program went to Mission, which provided scant meaningful assistance to resolve consumers' debts and often left consumers in worse financial positions than before they enrolled. - Source

To avoid becoming a victim of such tactics, consumers should carefully evaluate any for-profit or nonprofit debt relief company they are considering working with.

The following guides will provide a ste-by-step plan to verifying the claims any debt relief company makes before consumer enroll.

To make this situation even stranger than fiction, Michael Levitis, an attorney, is also known for his participation, along with his wife Marina Levitis, in a reality television show "Russian Dolls."

Lifetime, the network that carried the show, describes Marina by saying, "Dripping in furs and diamonds, Marina, 34, is all about status. When she isn't going head-to-head with her spirited mother-in-law, Eva (age 56), Marina runs the popular local club/restaurant Rasputin with her husband Michael and knows everyone in Brighton Beach."

Consumers should be able to trust those offering debt advice but in order to best protect themselves they must play a proactive role in checking out any company they are considering giving their hard earned money to.

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