Posted May 07, 2013 09:37 pm CDT
A new federal agency filed a lawsuit Tuesday against two New York City area law firms and an attorney who owns a related business. It contends that they charged illegal advance fees for so-called debt-relief services that provided little or no benefit to consumers, who routinely lost amounts ranging from $1,300 to $3,000.
In addition to the advance-fee allegations against Mission Settlement Agency; its attorney-owner Michael Levitis and his law office; Premier Consulting Group; and the Law Office of Michael Lupolover, the Consumer Financial Protection Bureau also alleges that Mission and Levitis violated the Consumer Financial Protection Act by using unfair and deceptive marketing practices, the Blog of Legal Times reports.
Among other issues, the civil complaint (PDF) filed in federal court in Manhattan by the CFPB says the Mission defendants violated federal law by misrepresenting to consumers the fees that would be charged and the benefits that would be provided concerning the debt-relief services they marketed.
Separately, the U.S. Department of Justice unsealed an indictment that includes criminal charges against Mission Settlement Agency, Levitis, and three current or former employees, according to the Hill’s RegWatch page. It was the first criminal case ever brought based on a referral by the CFPB, the article says.
The indictment (PDF) accuses the criminal defendants of participating in a mail and wire fraud conspiracy that bilked consumers out of millions of dollars.
As part of the criminal case, the DOJ is seeking to seize the Rasputin Supper Club in Brooklyn, which is owned by Levitis, the New York Daily News reports. Federal prosecutors say he used money from the debt-relief operation to fund the glitzy Brighton Beach club, lease two upscale vehicles and pay his mother’s credit-card bills.
A press release from the Manhattan U.S. Attorney’s office provides further details.
“These wolves in sheep’s clothing take money from consumers who are already struggling to pay their bills, falsely promising them help while really making their problems worse,” CFPB director Richard Cordray said said in a written statement provided to the Philadelphia Inquirer.
Attorney Jeffrey Lichtman represents Levitis and tells the BLT that his client has been cooperating the government. He said Levitis has been trying to meet with prosecutors to provide evidence about the “rogue former employees who committed many of the frauds alleged in the indictment” before exiting to open their own debt-relief business. “Now Michael Levitis is left to clean up the mess,” Lichtman said.
In an email to the BLT, Lupolover said the CFPB suit “has nothing to do with the law offices of Michael Lupolover.”