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Feds Accuse Six in|$14 Million Debt Scam

MANHATTAN (CN) - Mission Settlement Agency and six of its officers defrauded people of $14 million in a debt-relief scam, federal prosecutors say.

The U.S. Attorney's Office filed three indictments related to the scam Monday. As in so many similar scams, the defendants are accused of offering debt settlement or reductions services for an upfront fee, then waltzing with the money.

In a fourth, related lawsuit, the Consumer Financial Protection Bureau accused Mission, two law offices and a "consulting group" of fraud, including impersonating a government agency.

Accused of conspiracy, wire fraud and mail fraud were Mission Settlement Agency dba Mission Abstract aka Alpha Debt Settlement, Michael Levitis, Denis Kurlyand, Boris Shulman and Manuel Cruz aka James Leon. They have been running the scam in Manhattan and Brooklyn since 2009, according to one of the grand jury indictments.

Mission also is accused of impersonated a government agency to bilk its clients.

"Preying upon the financial desperation of individuals struggling to pay their credit card debts, the defendants falsely and fraudulently tricked over 1,000 such individuals into becoming Mission's customers with significant, but false, assurances about Mission's ability to help as well as about the fees Mission would charge in exchange for that help," the 20-page indictment states.

"(T)he defendants commonly lied about and/or concealed Mission's fees, falsely indicating Mission would charge a mere $49 per month, when in truth and in fact Mission took thousands of dollars in fees from funds that its customers had set aside because they believed the funds would be used to pay creditors. ...

"(F)or the majority of customers, Mission actually did little or no work and failed to achieve any reduction in debt whatsoever ..."

Prosecutors say Mission took $14 million from 2,200 customers, skimmed $8.8 million for itself, and paid creditors with only $4.4 million of it.

The indictment seeks forfeiture of money held in 17 bank accounts, the Rasputin restaurant and two other properties in Brooklyn, and anything else the defendants may have or have squirreled away.

A second indictment accuses Felix Lemberskiy of mail fraud, wire fraud and conspiracy.

The third indictment files similar charges against Zakhir Chirinov.

In the fourth indictment, the Consumer Financial Protection Bureau sued these defendants: Mission Settlement Agency dba Mission Abstract LLC, Law Office of Michael Levitis, Premier Consulting Group LLC, the Law Office of Michael Lupolover, and Michael Levitis.

"Levitis is the principal of Mission and the Law Office of Michael Levitis, and is heavily involved in their day-to-day operations," the CFPB says in its complaint. "He approved, ratified, endorsed, directed, controlled, managed, and otherwise materially participated in their affairs.

Levitis's law office is in Brooklyn. Defendant Lupolover's law office is in Englewood Cliffs, N.J.

In a fifth complaint, the United States seeks forfeiture of all of Mission's assets, and all of Rasputin's assets.

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