Phantom Debt Collection Scammer Pleads Guilty to Fraud
— -- The man investigators say was behind an expansive phony debt collection scheme highlighted in an ABC News investigation has pleaded guilty to four charges of fraud.
Kirit Patel, head of a California company that investigators said was front for “phantom debt collection,” made a deal with the U.S. government last month in which he pleaded guilty to four counts – two mail fraud and two wire fraud – in return for the government dropping the rest of the 21 counts with which he was originally charged.
As seen in an ABC News investigation in 2012, the phantom debt collection scheme involved fraudsters in call centers overseas convincing countless cash-strapped Americans that they owed money linked to previous loans and then bullying them into paying up. At the time of the ABC News report, investigators believed the criminals had dialed at least 2.5 million calls and pried some $5 million from their unwitting victims.
Some victims reported getting several dozen calls per hour. One, Cindy Gervais of New Orleans, said she began receiving the calls after going online for a legitimate quick loan. She paid the loan off, but then “debt collectors” with Indian accents called to tell her she owed more money.
“He more or less told me that if I didn’t pay, they were going to have someone on my doorstep to arrest me,” Gervais told ABC News in 2012. “And that they were going to contact my place of business and tell them what kind of person I am.”
After receiving scores of complaints, investigators with the FTC said they began tracking the calls, and following the payments. They alleged the payments led them to Patel.
“I would say that all roads of this scam, or many of the roads of this scam, lead back to Mr. Patel,” FTC Chairman Jon Leibowitz said in ABC News’ original report.
ABC News tracked Patel for weeks, from the suburbs of San Francisco to Austin, Texas. When ABC News questioned Patel about his company, he declined to comment.
At the time, an attorney for Patel said he was “as snookered by the people in India as anybody,” and that his client believed he was setting up a legitimate company.
Next February a judge will determine Patel’s sentence, which prosecutors recommended be nearly five years, according to the plea agreement.
