Ariz. AG Obtains Judgment Banning Collector; Defendants to Pay Up to $1.8M in Fines and Restitution

The Attorney General of Arizona on Friday announced that the defendants in a lawsuit filed by its office have reached a consent judgment that will see the defendants pay $1.6 million in restitution to those impacted by the debt collection scam, up to $900,000 in civil penalties, and a permanent ban for the owner of the companies named in the lawsuit.

A copy of the judgment in the case of State of Arizona v. Mark Anthony Smith and Deborah Ann Butler, CMS Financial Group, John Lee Group & Associates, and TD Financial Solutions Group AZ can be accessed by clicking here.

The Arizona AG filed the lawsuit in September 2020 as part of Operation Corrupt Collector, a joint federal and state initiative that took action against individuals and companies engaging in abusive collection practices and attempting to collect on non-existent debts. In this case, the defendants spoofed their phone numbers to make it appear as though they were calling from law enforcement agencies or courthouses and impersonated law enforcement officials and process servers when on the phone with consumers. If the individuals did not pay immediately, they were threatened with court action, wage garnishment, freezing bank accounts, liens on property, and having law enforcement officials sent to the individuals’ homes or places of work to be arrested.

The defendants allegedly made more than 75,000 spoofed phone calls between January 2016 and April 2017. The defendants allegedly left this voicemail for one consumer:

Hello, this is Officer Anderson out of Orange County. I am trying to reach a [consumer’s name]. I have an SC 100, which is a Summons and Complaint that we have been trying to get a hold of you on. Now I am not quite sure what has taken place here, but it appears that dispatch has made several attempts to get a hold of you, but they have been unsuccessful. Listen, at this point in time, we are trying to make sure you don’t receive an FTA, which is a failure to appear and be held in contempt of court. So, I do have a number to the issuing agency. The number is 833-277-4484. There is a case number associated with this. That case number is C as in Charlie; V as in Victor 0200-0139. Again, I would make contact with these folks immediately. If in fact my lieutenant gives me further instructions here shortly that you are still not in compliance — unfortunately, umm Mr. [consumer’s name], we are going to have to serve you at your place of employment. We are trying to avoid any embarrassment or we are trying to make sure that you do receive these documents. Thank you.

“Debt collectors engaging in misleading, harassing, or threatening behavior have certainly crossed the line,” said Arizona AG Mark Brnovich, in a statement. “My office is committed to protecting all consumers, including those with debts, from bad actors attempting to profit from fraudulent and unlawful practices.”

Under the terms of the order, the defendants will repay $1.6 million back to consumers who were taken advantage of by the scam. If the defendants repay the full amount, they will also pay $200,000 in a civil fine. If the defendants fail to repay the entire $1.6 million, then they will have to pay a fine of $900,000.

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