Debt management owners surrender $3M in settlement
FTC says debt management company owners to surrender $3 million for illegal collection
The owners of a California debt management company will surrender more than $3.3 million worth of assets as part of a settlement with federal regulators over illegal debt collection practices nationwide.
The Federal Trade Commission says Jason Begley and Wayne Lunsford, principal owners of Rincon Debt Management, made bogus threats against those in debt, saying that they could be sued or arrested, in some instances over debts they often did not actually owe.
Investigators said that the company targeted Spanish-speakers and people strapped for cash.
Rincon would call the employers of those in debt, family, friends and neighbors, according to the FTC. They also posed as process servers and attorneys or employees of a law office in an effort to collect money.
John Markham, an attorney representing the men, said Thursday that Begley and Lunsford were unaware that they had violated the Fair Debt Collection Practices Act.
"They know that in the years that their business was in operation, they helped hundreds of people with serious debts to compromise those debts in a way making these many people very grateful," Markham said.
Several companies that Begley and Lunsford used in the scheme are still the target of litigation and the two are permanently banned from the debt collection business.
The $3.3 million in assets will be used to provide refunds to victims.
The FTC's order imposes a $23 million judgment against the two men, which was suspended due to their inability to pay, except for the $3 million in frozen funds held by the receiver and the personal assets both agreed to surrender.
Begley is surrendering rights to more than 3,500 American Eagle silver and gold coins. He will also pay a $176,115 for having sold his home and some other coins in violation of an asset freeze. Lunsford is required to pay a $134,000 for the proceeds he received when he sold his home in violation of the asset freeze.
The FTC said that if the financial information that Begley and Lunsford provided is found to be bogus, they will owe the full $23 million.
