Man Charged with Running Debt Collection Agency from Prison

New York Attorney General Andrew Cuomo announced late Wednesday that his office had filed criminal charges against a man for running a debt collection operation from prison in violation of a previous order barring him from accounts receivable management work in the state.

According to Cuomo’s office, Lamont Cooper has been held in a federal prison in Batavia, N.Y. since October 2009 for violating the terms of release from a 1997 drug conviction. Over that same time period, the collection agency that he operated, CMC Recovery Services, Inc., d/b/a Legal Action Recovery, has been active.

But Cooper had been previously banned from doing debt collection business in the state by an order from Cuomo in 2009 (“NY Attorney General Shuts Down Collection Agencies; Subpoenas 20 Others,” May 28, 2009). His company was ordered shut down.

Cooper and CMC are charged with a felony count of Scheme to Defraud in the First Degree and Cooper is being additionally charged with a misdemeanor count of Criminal Contempt in the Second Degree. The felony carries a maximum sentence of four years in jail while the misdemeanor could potentially land Cooper another year of incarceration. CMC could be fined $10,000 or double its financial gain.

“This suspect is accused of continuing to run an abusive debt collection operation despite a court order barring him from doing so and despite being an inmate in federal prison,” said Cuomo in a press release. “Such disregard of the law will not be tolerated and we will hold him accountable for the harm he has caused to families throughout the country.”

An investigation by multiple law enforcement agencies included the monitoring of Cooper’s correspondence during his incarceration in Batavia. The surveillance determined that he was still actively involved in the debt collection business, including instructing employees on how to manage accounts and personnel matters, and requesting that he be kept abreast of “all banking activity.”

Cuomo noted that Cooper’s collection agents had continued to engage in activity that landed the firm in hot water in 2009. It is alleged that collectors regularly demanded payment for non-existent debts and demanded payments for debts that had already passed the statute of limitations or were discharged in bankruptcy. Using false law enforcement identities, collectors coerced and cajoled consumer into agreeing to make payments.

According to the Attorney General’s office, the actions are a part of an ongoing investigation into the ARM industry in New York, which was initially unveiled in May 2009 with the announcement of the previous action against Cooper.