Published: October 30. 2010 1:16AM
Attorney general goes to court to shut down Erie debt collector
By LISA THOMPSON
lisa.thompson@timesnews.com
Unscrupulous debt collectors have long relied on fear and harassment to pressure consumers.
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For what might be the first time, the state Attorney General's Office charged Friday, an Erie debt-collection company resorted to theater -- people dressed like sheriff's deputies and bogus court proceedings in a mock courtroom headed by a person dressed in black -- to intimidate consumers into making immediate payments, providing access to bank accounts, or surrendering vehicle titles and other assets.
The state Attorney General's Bureau of Consumer Protection this week sued Unicredit America Inc., 1537 W. 39th St., claiming it violated Pennsylvania's Consumer Protection Law and the Fair Debt Collection Practices Act. It said the company failed to comply with state and Erie County Court rules in order to extract payments from consumers.
The government wants the court to shut down Unicredit and freeze the company's assets. It also wants access to the company's business and financial records to further its probe.
So far, 370 affected consumers have been identified in Erie County Court records, Attorney General's Office spokesman Nils Frederiksen said Friday.
Investigators want to know if the company's practices reached further, he said.
"We do not want to leave any potential victims out," he said.
Attorney General Tom Corbett said the company's practices misled consumers.
"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said.
"Consumers also allegedly received dubious 'hearing notices' and letters -- often hand-delivered by individuals who appear to be sheriff deputies -- which implied they would be taken into custody by the sheriff if they failed to appear at the phony court for 'hearings' or 'depositions,'" Corbett said.
The lawsuit seeks restitution for all consumers who have been harmed by Unicredit's alleged unfair trade practices, along with civil penalties of up to $1,000 for each violation or up to $3,000 for each violation involving a victim age 60 or older.
A hearing on the matter will be held Tuesday before Judge Michael E. Dunlavey.
Michael Covatto, president of Unicredit, said Friday that he had no knowledge of the court action.
Erie lawyer Lawrence D'Ambrosio is accused of orchestrating the hearings held in the mock courtroom at 1537 W. 39th St. He could not immediately be reached for comment.
Another lawyer, "Attorney Logue," is referenced in court records as "Unicredit counsel" with no first name given. Frederiksen declined to comment on the reference. He said only that investigators believe two lawyers were involved in the practices at Unicredit.
Court records show the investigation unfolded with the help of complaints by consumers, lawyers from Northwest Legal Services, and a state Attorney General's Office investigator who attended a purported court "hearing" at Unicredit while working undercover.
Authorities charge that Unicredit used Erie County Civil Court subpoenas to summon consumers to "testify" at fake "deposition" hearings at the Unicredit "Debt Resolution Center." The consumers typically had modest judgments entered against them by local businesses, including hospitals, which had been turned over to Unicredit for collection.
The subpoenas ordered the consumers to appear with items such as vehicle registrations, bank statements, deeds, bonds, stocks, tax returns and records of personal property, authorities said.
The subpoenas warned that if the people did not attend or produce the items requested, they could face sanctions, including "costs, attorney fees and imprisonment," according to the suit.
The Attorney General's Office said the purported depositions were conducted in a fake courtroom that contained furniture and decorations similar to those used in actual court offices, including a raised "bench" area where a judge would be seated. During some proceedings, authorities charge, a person dressed in black was seated where observers would expect to see a judge.
When consumers appeared at the hearings accompanied by a lawyer, officials said, the proceedings were called off and Unicredit agreed to forgo further collection. If people failed to appear, letters would be sent warning them that they risked arrest if they failed to comply, investigators said.
"I shall have no alternative but to request from the Court of Common Pleas of Erie County to have the Sheriff attach you personally (physically take you away) for your appearance before the Judge to answer to the Court for your disobeying the Subpoena issued by the Prothonotary and lawfully served upon you. You have attempted to flout the law; therefore, you must face the consequences. See me immediately," read one such letter by D'Ambrosio, which was included in the court filing.
LISA THOMPSON can be reached at 870-1802 or by e-mail.
