Creditors use fake court to intimidate consumers

[Zeond]

Article from Go Erie

Published: October 30. 2010 1:16AM
Attorney general goes to court to shut down Erie debt collector
By LISA THOMPSON
lisa.thompson@timesnews.com
Unscrupulous debt collectors have long relied on fear and harassment to pressure consumers.


For what might be the first time, the state Attorney General's Office charged Friday, an Erie debt-collection company resorted to theater -- people dressed like sheriff's deputies and bogus court proceedings in a mock courtroom headed by a person dressed in black -- to intimidate consumers into making immediate payments, providing access to bank accounts, or surrendering vehicle titles and other assets.

The state Attorney General's Bureau of Consumer Protection this week sued Unicredit America Inc., 1537 W. 39th St., claiming it violated Pennsylvania's Consumer Protection Law and the Fair Debt Collection Practices Act. It said the company failed to comply with state and Erie County Court rules in order to extract payments from consumers.

The government wants the court to shut down Unicredit and freeze the company's assets. It also wants access to the company's business and financial records to further its probe.

So far, 370 affected consumers have been identified in Erie County Court records, Attorney General's Office spokesman Nils Frederiksen said Friday.

Investigators want to know if the company's practices reached further, he said.

"We do not want to leave any potential victims out," he said.

Attorney General Tom Corbett said the company's practices misled consumers.

"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said.

"Consumers also allegedly received dubious 'hearing notices' and letters -- often hand-delivered by individuals who appear to be sheriff deputies -- which implied they would be taken into custody by the sheriff if they failed to appear at the phony court for 'hearings' or 'depositions,'" Corbett said.

The lawsuit seeks restitution for all consumers who have been harmed by Unicredit's alleged unfair trade practices, along with civil penalties of up to $1,000 for each violation or up to $3,000 for each violation involving a victim age 60 or older.

A hearing on the matter will be held Tuesday before Judge Michael E. Dunlavey.

Michael Covatto, president of Unicredit, said Friday that he had no knowledge of the court action.

Erie lawyer Lawrence D'Ambrosio is accused of orchestrating the hearings held in the mock courtroom at 1537 W. 39th St. He could not immediately be reached for comment.

Another lawyer, "Attorney Logue," is referenced in court records as "Unicredit counsel" with no first name given. Frederiksen declined to comment on the reference. He said only that investigators believe two lawyers were involved in the practices at Unicredit.

Court records show the investigation unfolded with the help of complaints by consumers, lawyers from Northwest Legal Services, and a state Attorney General's Office investigator who attended a purported court "hearing" at Unicredit while working undercover.

Authorities charge that Unicredit used Erie County Civil Court subpoenas to summon consumers to "testify" at fake "deposition" hearings at the Unicredit "Debt Resolution Center." The consumers typically had modest judgments entered against them by local businesses, including hospitals, which had been turned over to Unicredit for collection.

The subpoenas ordered the consumers to appear with items such as vehicle registrations, bank statements, deeds, bonds, stocks, tax returns and records of personal property, authorities said.

The subpoenas warned that if the people did not attend or produce the items requested, they could face sanctions, including "costs, attorney fees and imprisonment," according to the suit.

The Attorney General's Office said the purported depositions were conducted in a fake courtroom that contained furniture and decorations similar to those used in actual court offices, including a raised "bench" area where a judge would be seated. During some proceedings, authorities charge, a person dressed in black was seated where observers would expect to see a judge.

When consumers appeared at the hearings accompanied by a lawyer, officials said, the proceedings were called off and Unicredit agreed to forgo further collection. If people failed to appear, letters would be sent warning them that they risked arrest if they failed to comply, investigators said.

"I shall have no alternative but to request from the Court of Common Pleas of Erie County to have the Sheriff attach you personally (physically take you away) for your appearance before the Judge to answer to the Court for your disobeying the Subpoena issued by the Prothonotary and lawfully served upon you. You have attempted to flout the law; therefore, you must face the consequences. See me immediately," read one such letter by D'Ambrosio, which was included in the court filing.


LISA THOMPSON can be reached at 870-1802 or by e-mail.

370 people and counting. This is a serious step up from harassing phone calls and the lawyer or lawyers involved with this should be severely penalized by their professional associations.

[Ryan Thunder]

Amazingly I don't see the word "fraud" mentioned once in this article.

[General Zod]

The fact that they're not calling for their heads to roll over impersonating a police officer alone is rather surprising.

[Knife]

I'm not sticking up for these fucks at all, but I am amazed people would fall for this sort of thing. Did they rent space at a Federal building or State building or something, who would think that court would be in some private building?

[ShadowDragon8685]

I'm not sticking up for these fucks at all, but I am amazed people would fall for this sort of thing. Did they rent space at a Federal building or State building or something, who would think that court would be in some private building?

When a guy dressed as a peace officers delivers you something telling you some place is a courtroom, and you need to go there or you'll be taken there in handcuffs, generally your first thought isn't "does this so-called court actually have the authority to do this."

Questioning the authority and legitimacy of a court is an action in this country most commonly associated with lunatic fringe nutjobs, the kind of person who think that income taxes are illegal because oklahoma or wherever wasn't a state and blah blah blah.

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

I do like how they caved immediately if someone had the guts to show up with a real advocate, which just goes to show what kind of operation they were running: pure bluff.


There need to be heads rolling for this. Impersonating an officer of the peace is the start of where the heads need to begin rolling. I hope there's a similar crime for impersonating an officer of the court, and if there isn't one already, there definitely needs to be one for impersonating a court.

[Alyeska]

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

There was no collusion. Those were not real law enforcement. They were all fakes.

[Akhlut]

I'm not sticking up for these fucks at all, but I am amazed people would fall for this sort of thing. Did they rent space at a Federal building or State building or something, who would think that court would be in some private building?

If you've never been to a courthouse before, you might not know what you're looking for, especially as a lot of modern courthouses for local municipalities are actually held in small, modular sorts of buildings. And since most people's experiences with courthouses are, usually, only for traffic violations, they might think that different court functions might be in different buildings.

There's also the very real possiblity that some of these people are very poor and uneducated; several were apparently brought in because of delinquent medical bills. If you have no interaction with the courts, how can you be expected to know what they look like?

[ShadowDragon8685]

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

There was no collusion. Those were not real law enforcement. They were all fakes.

I've underscored, bolded and italicized the operating word in the section you quoted, Alyseka.

While there is precedent in this country for people to be wary of phony peace officers, that's nearly always in the context of being pulled over late at night, or a 'cop' walking up to your door and asking to be let in. Nobody suspects a sheriff's deputy hand-delivering what appear to be authentic legal documents. These people successfully impersonated a justice system - who, really, besides an insane person or a complete wingnut, is going to question the legitimacy of a courtroom complete with judge, bailiffs, and peace officers? They appeared to be authentic to the standards of any reasonable person.

[Knife]

I'm not sticking up for these fucks at all, but I am amazed people would fall for this sort of thing. Did they rent space at a Federal building or State building or something, who would think that court would be in some private building?

When a guy dressed as a peace officers delivers you something telling you some place is a courtroom, and you need to go there or you'll be taken there in handcuffs, generally your first thought isn't "does this so-called court actually have the authority to do this."

Questioning the authority and legitimacy of a court is an action in this country most commonly associated with lunatic fringe nutjobs, the kind of person who think that income taxes are illegal because oklahoma or wherever wasn't a state and blah blah blah.

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

See, that's just insane. I feel really bad for those people, they got screwed and the company should be sued into non-existence, but come on people. I can see people believing the guys in uniform, if he's got the uniform and the badge, gear and car. But, the paper work, let alone not going to a government building for court? It takes two to get conned, the conman and the clueless.

If you've never been to a courthouse before, you might not know what you're looking for, especially as a lot of modern courthouses for local municipalities are actually held in small, modular sorts of buildings. And since most people's experiences with courthouses are, usually, only for traffic violations, they might think that different court functions might be in different buildings.

There's also the very real possiblity that some of these people are very poor and uneducated; several were apparently brought in because of delinquent medical bills. If you have no interaction with the courts, how can you be expected to know what they look like?

My sympathies go out to them and I don't really think it's their fault; however, you can reduce the risk factors that would put you in a situation like this: know a little bit about your fucking court system.

[White Haven]

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

There was no collusion. Those were not real law enforcement. They were all fakes.

Appear to be. That's the bloody POINT he's making. They appear to be working with law enforcement, who people are conditioned to obey. The fact that they weren't real is, actually, the point.

[General Zod]

My sympathies go out to them and I don't really think it's their fault; however, you can reduce the risk factors that would put you in a situation like this: know a little bit about your fucking court system.

Since they were eventually busted it seems clear that at least some of their victims did. It's unreasonable to expect everyone to be familiar enough with the court system to easily spot a fake.

[Oni Koneko Damien]

If the courtroom looks authentic (and it appears they did a halfway decent job of making this one pass muster,) it does not occur to people to question the legitimacy of the 'court,' especially if, as was said, they appear to be working in close collusion with law enforcement who will throw you in handcuffs and toss you in the lock-up if you say "This isn't a real court, you're imposters, I'm out of here."

There was no collusion. Those were not real law enforcement. They were all fakes.

...as was said, they appear to be working in close collusion with law enforcement...

I'm fairly certain he knew that already.

[ShadowDragon8685]

I'm not sticking up for these fucks at all, but I am amazed people would fall for this sort of thing. Did they rent space at a Federal building or State building or something, who would think that court would be in some private building?

If you've never been to a courthouse before, you might not know what you're looking for, especially as a lot of modern courthouses for local municipalities are actually held in small, modular sorts of buildings. And since most people's experiences with courthouses are, usually, only for traffic violations, they might think that different court functions might be in different buildings.

There's also the very real possibility that some of these people are very poor and uneducated; several were apparently brought in because of delinquent medical bills. If you have no interaction with the courts, how can you be expected to know what they look like?

I imagine most people's experience with a courtroom is through shows like Law & Order (and its spinoffs) and Judge Judy and the like. What people are expecting is a room to fit that layout - a long room with a large section in the back for people who want to attend who aren't part of the trial and just want to see what's going on, a place up front (usually fenced off from the viewing gallery) with two tables and benches and chairs - right for the prosecution/plaintiff, left for the defense and defendant, a jury box on the right (if applicable,) and a raised section at the head of the room with a massively impressive desk for the judge, again, probably with a stand separate from, but possibly built-into, the judge's bench, for the testifying witness to be set at.

If a room fits this general lay-out, the average American is going to immediately recognize it as a courtroom, and this image recognition will only go up, up, up, if they've got hold of lots of hardwood furniture, the room is wood-paneled, has massive flagpoles in the corners, etcetera - basically everything possible to make it look like the courtroom set used in Law & Order.

If I was told by someone who was apparently a peace officer to go to such a location and walked in, my first thought would be "oh shit, I'm in court, what did I do [badjoke]and did they find the clown's body[/badjoke]" not "is this a real court with the authority to legally employ force against me."

See, that's just insane. I feel really bad for those people, they got screwed and the company should be sued into non-existence, but come on people. I can see people believing the guys in uniform, if he's got the uniform and the badge, gear and car. But, the paper work, let alone not going to a government building for court? It takes two to get conned, the conman and the clueless.

Court documents are a matter of public record, all it would take on the back end of this "Impersonating a Justice System" case would be a single paralegal and a guy with a good copy of Adobe InDesign to forge authentic-looking court documents on the same sort of paper the actual court of the locality in question uses. As for not being a government building, what makes a government building is the presence of government.

A court of law can (in theory) be operated out of a double-wide trailer. A court of law could be held in the open air on picnic tables and park benches! What makes a court legitimate is its legal authority to employ force to bind you to the court's decision, not the presence of a lot of oak furniture and a big robe and a wig. However, if you have a lot of oak furniture and a guy in a big robe and a wig, it's going to pass muster as everyone's popular idea of what a court of law is supposed to look like, and hence they won't find its location to be worth risking pissing off the judge (and getting a draconian contempt charge laid on you) by standing up and saying "I do not believe these proceedings are valid, and I am leaving."

If you're actually in a fake court - well, if they're impersonating a justice system, do you really want to take the chance they won't have a couple of their "bailiffs" haul your ass into a cell in the basement for a couple of nights as a "contempt" finding? If they are a court system, you're definitely going to spend a couple of nights in a cell for contempt!

What further measures do you think a reasonable person could have undertaken?

My sympathies go out to them and I don't really think it's their fault; however, you can reduce the risk factors that would put you in a situation like this: know a little bit about your fucking court system.

Like what? Know what, exactly? Short of calling up the actual courthouse (and not a number that was provided by the 'deputy' or the papers he delivered,) in a good con like this, the only thing to remotely set off any alarm bells is the location of the court - and frankly, a court could be anywhere. We don't know the location of the building they used, and not all courts are actually monolithic marble edifices or otherwise imposing. The city of Salem, NJ's, courthouse looks like a courthouse. The courthouse in Penn's Grove, on the other hand, is colocated with the town hall (trials and council meetings take place in the same room,) and the police station, in an ordinary red brick building whose only concessions to grandeur are a pair of lanterns affixed to the side of the building. There are no fewer than two abandoned banks in the town that look a hell of a lot more like a government building than the actual government building.

I know, anecdote is not data, but we're not discussing a statistical trend of impersonating a justice system, we're discussing one incident.

[RedImperator]

I've been to traffic court three times, and accompanied Metatwaddle once. All four times, the proceedings took place in utterly nondescript, one-story brick buildings that could have just as easily been bank branches or dentists' offices. Most of them were marked with small, nondescript signs that any decent sign-making outfit could easily duplicate. In at least two of them, the defendants sat in folding chairs. I don't think a fake courtroom would be that hard to pull off. Rent a space in a "professional building", stick up a sign that says "Erie County Debtors' Court" or whatever, fill it with plastic furniture and build a dais for the "judge".

[jcow79]

Washington State has a pretty good debtors Bill of Rights as I think every state should. Impersonating a police officer is not allowed as are many other unscrupulous activities. Violations of the laws by collectors can potentially free a debtor from their obligations. It helps to keep the collections agencies in line.

[Simon_Jester]

See, that's just insane. I feel really bad for those people, they got screwed and the company should be sued into non-existence, but come on people. I can see people believing the guys in uniform, if he's got the uniform and the badge, gear and car. But, the paper work, let alone not going to a government building for court? It takes two to get conned, the conman and the clueless.

Dammit Knife, now I have to agree with ShadowDragon again!

Yes, a person who is at all on their guard should spot this and avoid the con. But consider the psychological factors:
-Like most cons, a lot of effort probably went into choosing easy marks: people unlikely to have their own attorney, unlikely to have familiarity with court proceedings, and often people whose financial straits were already desperate, making them afraid.
-That fear has a lot to do with making the con work in this context. Most cons I know of start by offering the mark something for nothing. In this case, the reverse tactic is used: the paraphernalia of what appears to be law enforcement is used to intimidate people into thinking they could lose everything for making trouble. The targets are people who have neither the time, the knowledge, nor the assets to contest a court case effectively, and they know it. That makes them afraid to stand up for themselves, at which point the con becomes far more practical.

People who would not be gullible enough to fall for the ruse when nothing is at stake can become more gullible when they are systematically intimidated and pushed around. Especially when the intimidation seems to be coming from the courts. If loan sharks push you around you may be able to go to the police, but what do you do if it's the police themselves you're afraid of, and if you actually think you may have committed a crime or an offense you could be sued for?
______

Hmm. It occurs to me that not only could the frauds be charged with crimes like impersonating officers of the law, but if they actually manhandled anyone or locked them up or anything, they could be charged with kidnapping too...

My sympathies go out to them and I don't really think it's their fault; however, you can reduce the risk factors that would put you in a situation like this: know a little bit about your fucking court system.

This is true.

[CaptainChewbacca]

See, that's just insane. I feel really bad for those people, they got screwed and the company should be sued into non-existence, but come on people. I can see people believing the guys in uniform, if he's got the uniform and the badge, gear and car. But, the paper work, let alone not going to a government building for court? It takes two to get conned, the conman and the clueless.

When I was appealing the refusal of unemployment benefits, I went for arbitration before a judge. This arbitration happened in a nondescript conference room in an office park. There were no metal detectors, no official state logo on the building, no bailifs or armed guards, and everyone was in plainclothes. I don't know how much legal stuff you've been through in the US, but this situation isn't uncommon.

[Knife]

I've been through some and it's always been at the court house/state building. Apparently my experience is different than others so...

I still don't blame the victims, just find it odd it worked at all.

[General Zod]

I've been through some and it's always been at the court house/state building. Apparently my experience is different than others so...

I still don't blame the victims, just find it odd it worked at all.

You should read up on Henry Terry sometime.

[ShadowDragon8685]

Dammit Knife, now I have to agree with ShadowDragon again!

Would it help if I said something patently absurd and over-the-top like "I believe the people responsible for this impersonating a justice system scam should be stood against a wall, from the shareholders of the company down to the guy who designed their fake court documents and fetched coffee in the morning."?

People who would not be gullible enough to fall for the ruse when nothing is at stake can become more gullible when they are systematically intimidated and pushed around. Especially when the intimidation seems to be coming from the courts. If loan sharks push you around you may be able to go to the police, but what do you do if it's the police themselves you're afraid of, and if you actually think you may have committed a crime or an offense you could be sued for?

Not much. Pretty much your only avenues of recourse if it's the police who are pushing you around are the FBI or the mob. And by mob, I actually mean 'news media,' of course, because the mob can't really do much except maybe get you out of the country, but they'd have to really owe you for them to bother.

Hmm. It occurs to me that not only could the frauds be charged with crimes like impersonating officers of the law, but if they actually manhandled anyone or locked them up or anything, they could be charged with kidnapping too...

Kidnapping and false imprisonment if they locked anyone up. However, being that this scam was being perpetrated by a debt collection agency and not genuine crooks, I'd bet dollars to doughnuts they were very, very careful to be very, very explicit to their fake bailiffs and sheriffs that they were not, under any circumstances, to get loud or touch one of the victims of the scam.

This is true.

Only very, very intimate knowledge of the local court system would have sufficed. I'd surmise that it wasn't any of the scam targets who first blew the whistle on this, but one of the few real lawyers that one of the plaintiffs managed to stump up enough cash to bring along who said "that's not the right courthouse, I don't recognize that 'judge,' and as soon as they saw me they caved and dismissed? This is a scam, I'm calling the real cops."

[Enigma]

What I find funny is that at least one of those phony trials was at Unicredit. Wouldn't the victims be tipped off when they see the company name on the building?

Then again I can see if someone has no experience in dealing with law enforcement and the judicial system could be duped by Unicredit's illegal practices.

[ShadowDragon8685]

With corporate sponsorship being part of the public awareness these days, I can actually imagine someone who's already frightened thinking Oh shit, these guys are paying for the courthouse, I'm hosed, rather than Wait a minute, why is an impartial court hearing being held at their corporate offices.

[DudeGuyMan]

This is one of those cons that succeeds for a while because nobody believes anyone could be this ballsy.

[CaptainChewbacca]

This is one of those cons that succeeds for a while because nobody believes anyone could be this ballsy.

Exactly. 'They've got uniforms and they're calling this a hearing, I must be in police custody, right?'

[Simon_Jester]

And of course the reason these things are rare is that even if you're ballsy enough to do it, you get smashed into a pancake by the law if anyone finds out.

Or, if the law is so bribed that they don't care... well, that's how what were originally impossibly ballsy cons become common practice.