On April 22, the CFPB announced that it and the NY AG had filed a complaint in the U.S. District Court for the Western District of New York seeking to seize a $1.6 million home they allege was fraudulently transferred by the owner of a shuttered debt-collection scheme. According to the CFPB, after discovering the federal and state investigation into his companies, the owner transferred the home to his wife and daughter for the nominal sum of $1 to fraudulently conceal his assets in violation of the FDCPA. In the complaint, the CFPB and NY AG ask the court to void this transfer and order the property sold to partially repay the debt collector’s debt to the federal and state governments.
According to the press release, the underlying conduct at issue concerned the alleged inflation of consumers’ debts by adding $200 to debts they purchased for collection, “forcing consumers to pay more than they owe and falsely issuing threats to have consumers arrested.” Following investigation and litigation concerning this scheme, CFPB and the NY AG reached a settlement with the owner and his companies in which they agreed to be permanently banned from the debt collection industry and pay $60 million in consumer redress and fines. Notwithstanding the order, the owner has made no payments towards the judgment and has been uncooperative in government attempts to obtain information about his finances.