If you’ve been around the industry for a few years, maybe the name Douglas MacKinnon will ring a bell or two. MacKinnon, to refresh your memory, was referred to as a debt collection “kingpin” by the Acting Director of the Consumer Financial Protection Bureau, who was ordered to pay $60 million in fines and restitution to consumers after being accused of doing a lot of shady stuff. The CFPB is still trying to collect, and MacKinnon and his family are doing a great job of fighting those efforts. It has now gotten to the point where a Magistrate judge is threatening to have MacKinnon arrested and his family members fined $500 per day if they fail to comply with a court order seeking information on their assets.
A copy of the ruling in the case of Bureau of Consumer Financial Protection v. MacKinnon can be accessed by clicking here.
The CFPB went as far earlier this year of attempting to seize a house — valued at $1.6 million — that MacKinnon sold to his wife for $1 after learning his companies were being investigated for threatening consumers when collecting on debts and inflating the balances that were owed.
The original subpoenas were served on MacKinnon and his family in May 2020. Since this, MacKinnon’s attorneys have consistently sought to delay production of the information that is being requested. Nearly 18 months later, Judge H. Kenneth Schroeder of the District Court for the Western District of New York, has had enough. The CFPB was seeking a penalty of $1,000 per day for MacKinnon, his wife, and four children, but noting that “monetary sanctions are likely to prove ineffectual for coercing compliance” for MacKinnon, Judge Schroeder instead determined that “arrest is an appropriate coercive sanction” should MacKinnon not provide the information that is requested. His wife and kids, meanwhile, will be fined $500 per day.
Under the terms of the settlement, MacKinnon, Northern Resolution Group and Enhanced Acquisitions were ordered to pay $40 million in restitution to consumers and $10 million each to the CFPB and the New York AG, for a total of $60 million. Mark Gray and Delray Capital, other defendants and alleged participants in the scam, were fined $4 million in restitution to consumers and $1 million each to the CFPB and NY AG, but those fines were reduced to a $1 civil money penalty and $10,000 in consumer restitution because of an inability to pay the full amount. The amounts of the fines represent the amounts that were taken from individuals as a result of this scam.