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Agency Owner Indicted in $20 Million Fraud Must Remain in Jail Until Trial, Appeals Court Rules

A California man who owned a collection agency and is awaiting trial on allegations he ran a $20 million fraud scheme had his appeal denied and must remain in jail until his trial starts in September.

Charles Stanley was out on bail after being arrested last June, but had it revoked after he allegedly continued to commit collection-related crimes while out on bail. He appealed the detention to the Court of Appeals for the Ninth Circuit, which denied the request last week.

Stanley, who owned Credit Specialty Service, was accused of collecting money on behalf of clients and then under-reporting how much was collected, and pocketing the difference. The firm, which filed for bankruptcy protection in 2016, allegedly kept more than $20 million that was collected and then not turned over to the agency’s clients. In one instance, the collection agency continued to collect on debts even after the client terminated its contract with the agency.

After he was indicted and arrested on 14 counts of bank fraud last year, Stanley pleaded not guilty and was granted a $250,000 bond. His release included several conditions, including that he have no business in the ARM industry.

However, Stanley allegedly used his time out of jail by opening bank accounts in the name of a defunct law firm to receive commissions for funds that were collected by the firm on behalf of the Sacramento County Sheriff’s Department. The law firm used to work with creditors in wage garnishment cases, in which some of the funds were paid to the Sheriff’s Department. Stanley allegedly submitted 77 claims to the Sheriff’s Department, saying that the firm never received its commission. The Sheriff’s Department sent the “law firm” more than $7,000.

After catching wind of the scam, prosecutors moved to have Stanley’s bail revoked and he has been in jail since February. Along with the bank fraud charges, Stanley is now also facing 77 charges of wire fraud in the law firm scheme.

 

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