Thousands of Consumers Victimized in Largest Debt Collection Scheme Ever Charged
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that TRAVELL THOMAS, the owner, chief executive officer (“CEO”), and president of Four Star Resolution (“Four Star”), a Buffalo, New York-based debt collection company, was sentenced in Manhattan federal court to 100 months in prison for orchestrating a scheme to coerce thousands of victims across the country, through false threats and representations, into paying a total of more than $31 million to Four Star to resolve debts these victims purportedly owed. All 14 individuals charged in connection with the Four Star scheme have been convicted. THOMAS pled guilty on November 1, 2016, to conspiracy to commit wire fraud and wire fraud before U.S. District Court Judge Katherine Polk Failla, who also imposed today’s sentence.
Acting U.S. Attorney Kim said: “Travell Thomas was the mastermind behind the largest criminal debt collection scheme ever charged. Using abusive and outrageous threats to take advantage of vulnerable Americans, Thomas and his co-conspirators defrauded victims out of $31 million and Thomas made a small fortune for himself. Thomas will now serve a significant term in federal prison. This Office is committed to prosecuting those who prey and abuse everyday consumers.”
According to the Indictment and other filings in Manhattan federal court, and statements made in connection with THOMAS’s sentencing and other court proceedings:
Between 2010 and February 2015, THOMAS was the co-owner, CEO, and president of Four Star. In that capacity, Thomas oversaw four debt collection offices operated by Four Star in Buffalo and a team of managers and debt collectors. As part of his scheme to defraud individuals throughout the United States, THOMAS falsely inflated the balances of debts owed by individuals in Four Star’s debt collection software so that THOMAS’s debt collectors could collect more money from the victims than the victims actually owed, a practice known within Four Star as “juicing” balances. THOMAS also placed purported debts with more than one of his offices so that multiple collectors from within Four Star could solicit and coerce a particular victim to repay a debt more than once.
As owner and president of Four Star, THOMAS drafted, approved, and disseminated debt collection scripts that contained a variety of misrepresentations and instructed his collectors to make those misrepresentations to consumers over the telephone. At THOMAS’s direction and under his supervision, Four Star’s debt collectors, using a variety of aliases, attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats, including that: (1) Four Star was affiliated with local government and law enforcement agencies, including the “county” and the district attorney’s office; (2) the consumers had committed criminal acts, such as “wire fraud” or “check fraud,” and if they did not pay the debt immediately, warrants or other process would be issued, at which point they would be arrested or hauled into court; (3) the victims would have their driver’s licenses suspended if they did not pay their debts immediately; (4) Four Star was a law firm or mediation firm and that Four Star’s employees were working with lawyers, a law firm, mediators, or arbitrators; and (5) a civil lawsuit would be filed, or was pending, against the victims for failing to pay their debts. THOMAS also approved an abusive and coercive “mailing campaign,” in which Four Star sent mailers to victims across the country that purported to be from courts and government agencies.
In total, from about January 2010 through November 2014, Four Star collected more than $31 million from thousands of victims across the United States. Of the money that Four Star took in from victims, approximately $1.5 million was paid in cash to THOMAS and his co-owner and co-defendant, Maurice Sessum, approximately $1.4 million was withdrawn from banks and ATMs, and hundreds of thousands of dollars were used to pay for THOMAS’s gambling expenses, season tickets for professional sports games, THOMAS’s wedding reception, and jewelry, among other expenses.
In addition to his prison term, THOMAS, 38, of Orchard Park, New York, was sentenced to three years of supervised release, and ordered to forfeit $31 million.
In total, 14 individuals associated with Four Star have been charged and pled guilty to defrauding consumers as part of this debt collection scheme. In addition to THOMAS, co-owner and chief financial officer Maurice Sessum, managers Jimmy Stokes, Tacoby Thomas, Heather Gasta, Mark Lavin, and John Salatino, and debt collectors Anthony Caba, Jessica Mann, Charles Starks, William Clark, Columbus Simmons, Michael Calandra, and Jennifer Sherk each pled guilty to conspiracy to commit wire fraud and wire fraud for their roles in the scheme.
Tacoby Thomas, Caba, Starks, Clark, Simmonds, Calandra, and Mann were sentenced by Judge Failla to prison terms of 70 months, 36 months, 37 months, 30 months, 28 months, 15 months, and one year and one day, respectively. The sentencing of the other defendants who have pled guilty is pending.
Mr. Kim praised the efforts of the Office’s Criminal Investigators who led the investigation of this matter. He also thanked the Federal Trade Commission for its assistance.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore, Jennifer L. Beidel, and Jordan L. Estes are in charge of the prosecution.