A federal court has shut down a debt relief service that the FTC alleged targeted seniors and veterans by impersonating banks, credit card companies and government agencies.
A $106.8 million default judgment entered in the U.S. District Court for the District of Arizona bans Accelerated Debt Settlement Inc., ADS Resolve LLC, Financial Solutions Group LLC, Unified Capital Services LLC, Mediwerks, Resolution Specialists LLC and Futura Capital and individual defendants from working in the debt relief industry.
“Targeting seniors and veterans, pretending to be entities they know and trust, and then robbing them of their hard-earned money is egregious behavior,” Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection said. “The FTC will continue to take action against impersonation and illegal debt relief schemes.”
The Arizona court had temporarily shut down Accelerated Debt Settlement enterprise after the FTC alleged that the defendants falsely posed as banks and government officials and said they could reduce consumers’ debts by 75% or more. The FTC also alleged that the defendants contacted consumers through telemarketing calls or responses to direct-mail and online advertisements. The FTC said that the defendants collected advance fees that were illegal.
The default judgment also bans the defendants from:
- Advertising or promoting any debt relief product or service.
- Telemarketing.
- Impersonating any government entity or person or violating the Impersonation Rule.
- Using a consumer credit report without having a permitted purpose.
- “Misrepresentations, including, but not limited to: any material aspect of any cancellation, exchange or repurchase policy; the expertise or position of any person providing a product or service; the ability to improve or otherwise affect a consumer’s credit record, credit history or credit rating; and that a consumer will save money.”
In March, the court entered stipulated orders with three individual defendants: Jeffrey Lakes, Robert Knechtel and Alizabeth Reany. Those orders contain the same bans as the corporate defendants and require them to turn over their assets.
The order against Lakes contains a $104.3 million judgment, jointly and severally with the other defendants. That judgment will be partially suspended after Lakes turns over assets valued at about $12.6 million. The judgment of about $37.3 million against Knechtel will be suspended based on an inability to pay. Reaney is required to transfer $175,000 or turn over the title to her home in Scottsdale, Arizona.
All of the money collected from the individual defendants will become available to provide redress to the defrauded consumers.
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