It is almost becoming impossible to list all of the named entities in the FTC and State of Florida action against the alleged Massive Debt Relief Scam by Jeremy Marcus, Craig Smith, and Yisbet Segrea
I’m actually not sure I have the strength to run through all the entities and people involved. As the Receiver says, “Since his appointment as Receiver, his professionals have served demands for turnover of financial records upon no less than 187 entities and persons, including 36 banks, 4 non-banking financial institutions, 104 related non-defendant entities, 22 nondefendant individuals, as well as the 23 Receivership Defendants and the Relief Defendants.”
While the Receiver has managed to secure millions in cash and assets, like most of these types of cases, it is unlikely consumers will ever be made whole again. Heck, the first Receiver payment for expenses in managing this mess and unraveling the scheme is $1,080,903 and the accountants appointed to help the Receiver were approved for a first payment of $188,523. – Source
The Receiver’s Second Interim Report was just recently made public. I’m just going to go through 1ll 163 pages of it for you and quote the highlights.
“The Receiver also identified $6.6 million in Receivership monies used to buy houses for Defendant Marcus, his father Relief Defendant Jack Marcus, his mother Relief Defendant Teresa Duda, his brother Relief Defendant James Marcus, and for Defendant Smith. The purchase price for Defendant Jeremy Marcus’ home alone was $5.25 million. The Receiver is preparing the appropriate motions and actions to retrieve these transfers.”
“The Receiver also identified numerous vehicles purchased with Receivership monies, including (1) a Tesla Model S 85 Performance titled in the name of Receivership Defendant Active Debt Solutions purchased for over $117,000 that was driven by Defendant Smith, (2) a Range Rover Autobiography titled in the name of Receivership Defendant Paralegal Staff Support purchased for $140,000 being driven by Jeremy Marcus’s wife, Amanda, and (3) a BMW I8 purchased for $133,564 with monies from Receivership Defendant Halfpay being driven by Jeremy Marcus. Only Defendant Smith has cooperated, by voluntarily turning over the Tesla. To date, Marcus has refused to turn over the Range Rover and BMW. The Receiver has prepared a turnover motion for filing.”
“The Receiver also learned from his investigation that Defendant Marcus utilized more than $1,200,000 in Receivership monies to purchase (and fund) National Arms, LLC, a startup gun ammunition manufacturer operated by Defendant Smith and Marc Cohen, another former employee of the Receivership Defendants. National Arms’ bank account has been frozen and its assets are being preserved pending a determination on how best to maximize the Receivership’s recovery.”
“The Receiver’s investigation also has revealed practices engaged in by the Defendants that appear to be deceptive and unlawful. For example, in order to improve consumers’ credit scores, Defendants appear to have falsely reported to major credit agencies that an independent third party lender called NGP Enterprises, LLC (“NGP”) had issued the customers loans and that they had been making monthly loan repayments. Defendants further reported as NGP’s phone number for the credit agencies and creditors to call when seeking verification, a number that instead rang at the Defendants’ offices in an effort to apparently deceive.
“Call scripts” reviewed by the Receiver’s team also reflect the use of deceptive statements to induce consumers into enrolling or continuing to make payments to the Receivership Defendants. These include representations that the debt relief programs being sold were administered by not for profit organization(s) and misleading statements as to the caller’s identity.
The Receiver has also discovered evidence suggesting that the Defendants at times used consumers’ escrow monies for personal benefit, including for the purchase of Defendant Marcus’ waterfront home.”
“The Receiver’s investigation revealed that Defendant Jeremy Marcus directed, with the knowledge and/or assistance of Defendants Smith and Segrea, the transfer of more than $20 million that originated from consumers into the Common Enterprise Entities where he is the ultimate owner-beneficiary.”
“Defendant Marcus confirmed in his interviews with the Receiver and his professionals that the declaration of the FTC’s forensic accountant, Roshni Agarwal, concerning the transfer of funds from Receivership Defendants to Relief Defendants for Marcus’ personal real estate investments was true and accurate, i.e., that Receivership monies received from consumers were used to acquire the entities and assets owned and controlled by Marcus.”
“The Receiver identified two school buses, determined to be a 2003 Blue Bird Bus and a 2006 Intergeneses. The Receiver investigated the origin and condition of the school buses. Receivership Defendant Paralegal Staff Support purchased the school buses and a shuttle bus in June 2015 for $35,000 from Tampa Bus Market, Inc. The shuttle bus (similar to a small airport hotel shuttle) was sold on March 30, 2016 for $8,750 to Word of Living God Ministries. On July 1, 2015, Paralegal Staff Support paid $7,500 to have each of the school buses converted into a 66 seat “party bus” and $22,366 for the installation of a high-end sound system, wood floors, LED lighting and TV screens. The buses appear to be in good condition but do not start. The Receiver intends to sell the busses as soon as practicable.”
“The Receiver also determined that the Common Enterprise Entities utilized Reliant Account Management (“RAM”) for its ACH processing. RAM had a client login that permitted remote access to the Common Enterprise Entities’ ACH funding accounts. The Receiver obtained the username and password and reviewed files therein. The Receiver’s review confirmed that the Common Enterprise Entities with the knowledge and assistance of Defendants Marcus, Smith, and Segrea commingled and moved monies amongst each other without regard to corporate formality. The Receiver utilized the data provided by RAM as part of his forensic analysis to determine how money collected from consumers via RAM flows through the myriad of related entities Defendants utilized. This analysis is almost complete.
RAM has cooperated with the Receiver, including by providing a Dropbox link for a variety of account information and returning Receivership Defendant monies that RAM held as of May 9, 2017. The Receiver and his professionals have reviewed this data which dates back to February 2013.”
“On June 14, 2017, the Receiver sent correspondence to over 3,150 customers identified as having active pending legal cases, notifying them that the Receiver would not be paying or otherwise providing legal representation. Beginning on June 26, 2017, and continuing thereafter, the Receiver has returned original legal documents received in the mail to customers in order to facilitate their ability to obtain counsel to represent them.”
“On May 10, 2017, Defendant Craig Smith’s wife, Tiffanie Smith, withdrew $3,500 in cash from their joint bank account at Bank of America after Defendant Craig Smith was served with this Court’s order freezing his assets. Mrs. Smith withdrew the funds after she received a text from Defendant Craig Smith on May 10, 2017 at 8:30 a.m. directing her to “take the monies out of the bank.” Craig Smith’s text came after the Receiver began the takedown of the Pompano Complex with Smith present. Simultaneously, Tiffanie Smith also withdrew $20,000 from a Bank of America account titled in her name. Based upon the Receiver’s interview with Tiffanie Smith, it is his belief that Defendant Craig Smith had an interest in the monies held in Tiffanie Smith’s account. Counsel for Craig Smith is currently holding the remaining funds (approximately $14,000) in trust.”
“Titan Funding, LLC is a privately held financial services firm through which Defendant Marcus and Receivership Defendants, including Halfpay, provided over $14 million in hard money loans and other investments using monies that originated from consumers. Its principals are Edward Piazza, John Mansour and Howard Babcock.
Titan Funding’s sister company Titan Loan Servicing serviced the loans, or investment, as the case may be, for an additional fee.
One of the investments Marcus and Halfpay made through Titan Funding was the purchase of a real estate development in Beecher, Illinois consisting of approximately 138 parcels (of which 126 remain). Marcus owned the development through Nantucket Cove of Illinois, LLC, an original Relief Defendant that has since become a Receivership Defendant by virtue of this Court’s Expansion Order. Jeremy Marcus and Edward Piazza were the only two people with signature authority over Nantucket Cove’s bank account.
On May 11, 2017, two days after the Court entered its initial asset freeze order prohibiting the removal of funds from the Nantucket Cove account, Piazza withdrew $350,000. Piazza made this withdrawal immediately after receiving two phone calls. One originated from Defendant Marcus, who called Piazza’s partner John Mansour to warn him that his companies were being taken over by a federal agency (Mansour and Piazza told the Receiver they thought it was the SEC rather than the FTC). The other call came from the banker who had introduced Marcus to Piazza, who also warned Piazza that Marcus’ companies were in trouble. Piazza immediately withdrew $350,000 from Receivership Defendant Nantucket Cove’s account, leaving just $24,664.96. Piazza transferred $150,000 to himself and his two partners Mansour and Babcock ($50,000 each). Piazza also gave $30,000 to Titan Funding’s attorney in Kentucky and used $59,750 to fund a construction draw on one of the Halfpay loans Titan Funding was servicing.
The Receiver has made numerous demands for return of the monies, but Titan Funding and its principals have returned only the $110,000 they did not spend. Additionally, Titan Funding and its principals have failed to provide an accounting of all monies they have received on behalf of Halfpay as loan servicer/investment manager. The Receiver has prepared a motion for an order to show cause why Titan Funding and its principals should not be held in contempt for violating this Court’s order and expects to file it shortly.”
“The Receiver’s investigation revealed that on May 12, 2017 and May 15, 2017, Receivership Defendant Discount Marketing transferred $110,743.54 and $53,478.44, respectively, to Multibank in Panama for “Planilla Automatica” [automatic payroll]. As indicated in texts between them, Defendants Segrea and Marcus effectuated the transfers after they had been served with the TRO on May 10, 2017. Based on historical bank records, Panama payroll typically ranged between $45,000 and $55,000 per month. The Receiver is investigating why the amount was larger than usual.”
“On September 27, 2016, James Marcus (Jeremy’s brother) and his wife Jennifer Perez purchased a townhome at 6665 Green Valley Circle #222, Culver City, CA 90230 (the “Culver City House”) for a cash purchase price of $497,279.51. The Receiver’s investigation has established that neither Relief Defendant James Marcus nor his wife provided any consideration for the Culver City House. Rather, the Receiver’s forensic accountant’s tracing analysis confirms that the ultimate source of funds was Receivership Entities.
James Marcus has not cooperated with the Receiver regarding turnover of the Culver City House, and the Receiver is preparing papers seeking an equitable lien and other relief in an amount not less than $497,279.51.”
“On September 11, 2014, Jeremy Marcus purchased a single family house at 110 Glouchester St., Boca Raton, FL 33487 (the “110 Glouchester House”) for $105,000.00, which he then transferred to 110 Glouchester St., LLC, a limited liability company owned by Marcus. On February 22, 2017, Marcus executed a quit-claim deed transferring ownership to Relief Defendant Teresa Duda, Jeremy Marcus’ mother.
The Receiver’s investigation has confirmed that Duda provided no consideration for the house. The Receiver’s forensic accountant’s tracing analysis also established that the sole source of funds for the purchase of the house was Receivership Defendant Active Debt Solutions, who obtained its funds from Receivership customers. Additionally, $29,981.99 in Active Debt Solutions/consumer funds were used for improvements to the 110 Glouchester House, as well as to pay property taxes on the house. Until recently, Ms. Duda used the house as an income producing property.
Ms. Duda has refused to turn over the house, and the Receiver is preparing papers seeking appropriate relief.”
On July 28, 2015, Receivership Defendant Halfpay purchased a single family home at 6436 Grand Cypress Circle, Lake Worth, FL 33463 (the “Grand Cypress House”) for $220,000. On May 1, 2016, Receivership Defendant Halfpay quit-claimed the deed to Relief Defendant Jack Marcus, Jeremy Marcus’ father. Jack Marcus did not provide any consideration for the Grand Cypress House. The Receiver’s forensic accountant performed a tracing analysis confirming that Receivership Defendant Halfpay was the sole source of funds for the purchase.
Jack Marcus has not cooperated with the Receiver regarding turnover of the house, and the Receiver intends to seek relief from this Court seeking turnover as well as an equitable lien.”
“The Receiver has discovered two transfers of consumer funds related to potential business in the Philippines totaling $5,257,610.06. On September 28, 2016, Receivership Defendant Associated Admin transferred $3,245,710.06 to TKS Holdings, Inc. (a Philippines company) at the Rizal Commercial Banking Corporation. The wire reference says “purchase.”
On September 28, 2016, Associated Admin transferred an additional $2,011,900.00 to Ronald Liddell at the Metropolitan Bank and Trust Company in the Philippines with a wire reference to “purchase.”
The Receiver understands from his interview with Defendant Segrea that Ronald Liddell was an employee who had assisted in setting up the Panama operations, and who may have been directed to set up an operation in the Philippines as well.
Information obtained by the Receiver suggests that a company may have been incorporated in the Philippines at the direction of one or more of the Defendants and/or Liddell by the name of Credit Health Plan, Inc.
The Receiver continues to investigate the Philippines transfers. The Receiver has been unsuccessful in his attempts to interview Mr. Liddell to date. A review of Mr. Liddell’s social media accounts indicate that he began a “world tour” in April 2017 and may have just returned to the United States.”
Upon takedown of the Pompano Complex, the Receiver found sales scripts at telemarketer work stations. The Receiver’s investigation has revealed that Defendants Smith, Marcus, and Segrea were involved in the preparation of sales scripts used with consumers. The scripts direct the dissemination of false misrepresentations and misleading statements to obtain sales. For example:
(1) Script 1 directs the telemarketer to say that they are from the “security department” and that they want to verify personal information.
(2) Script 2 labeled “Negotiation Credit Service” describes a phone call that a telemarketer might make to a consumer who was previously with Solid Financial Group or Global Client Solutions. Script 2 states, in pertinent part: “The best thing about our program is we GUARANTEE our results in writing. So at the end of the day, YOU HAVE ABSOLUTELY NOTHING TO LOSE!”
(3) Script 3 labeled “Helping America Group – Sales Rebuttals” provides a series of Q&A’s for telemarketers to follow. Question 6 states, “How do you get paid if you are a nonprofit corporation?” The answer: “All the money that we make goes back into the purpose of our company, which is to provide you with solutions to your unsecured debts.” Marcus was withdrawing millions of dollars in what he considered profits, which he used to purchase a waterfront mansion, luxury cars, a 5 carat diamond ring, precious metals, expensive watches, and houses for all of his family members.
(4) Script 4 labeled “American Advocacy Alliance” is handwritten and contains this statement: “We are a 501c3 corporation, non-profit organization. We work under the FTC Guidelines.” It also states: “We gaurantee [sic] the resolution of you [sic] debts in writing.”
(5) Further scripts encourage telemarketers for Receivership Defendant Viking Management Services to pretend to be someone other than Viking Management Services in order to convince the consumer to turn over their prior escrow balance.”
“The Receiver’s team located in the Panama office a notebook with Supervisor guidelines and “back office” customer service type scripts. The Panama office, run by Defendant Segrea, was responsible for the Receivership Defendants’ non-sales operations, including customer service, retention, and collections.
(1) Script 1 is labeled a “Rebuttal Sheet” for The Office of Cockburn & Associate, whose 1500 debt relief customers Receivership Defendant Cockburn & Associate LLC purchased for $1.5 million. The script contains the anticipated question “Where has my escrow gone?” The answer, in pertinent part, is “Any previous escrow has gone to the fees of The Office of Cockburn & Associate for the debt dismissal process.” As discussed in the Cockburn & Associate Section, infra, the Receiver believes this statement to be untrue. The Receiver’s investigation instead indicates that Defendant Marcus ultimately used these consumers’ escrow monies, totaling over $2 million, to purchase Marcus’s waterfront home.
(2) Script 2 entitled “Stage 3 – 30 Day What if Client Served w/Summons Update Call Script” purports to be the script that the Panama customer service arm would utilize if a customer was sued by a creditor. The script states, in pertinent part, “DO NOT PANIC…the creditors see you have hired a lawyer…our [network of attorneys] will countersue the creditor for violating your FDCPA rights including excessive contact, inappropriate communication, and illegal threats.” The Receiver understands from interviews with Defendant Segrea, paralegal Zena Leonardi and others that lawsuits under $2,500, constituting the majority of lawsuits against their customers, were not assigned an attorney.
(3) The Supervisor notebook also contained login information for a program called “EZ Texting” which created the framework for luring back customers that had either cancelled recurring payments to the Receivership Defendants or had a payment returned for insufficient funds. The Receiver logged in to the EZ Texting program and referred to the Supervisor document entitled “Easy Text Notes.” The “Easy Text Notes” instructed Panama employees to send mass text messages to “200 NSF Clients at a Time” and to keep the message “very vague.” While some of the messages sent were innocuous, others appeared to be misleading, and stated things such as: (i) “Please contact the security department immediately regarding your personal information 855-247-4991”; (ii) “We have very important news that we must share with you about progress made on your largest account, please contact us immediately at 888-860-6676.”
Marcus incorporated Receivership Defendant Cockburn & Associate, a Florida Limited Liability Company, on January 27, 2016.
As with other Receivership Defendants, Marcus created Cockburn & Associate to track a particular group of consumers that were “purchased” from another debt relief company. After acquiring another debt relief company’s customers, the Receivership Defendants’ telemarketers typically called the customers and attempted to convince them to transfer over the monies they had dutifully saved over months in escrow accounts to pay creditors with the assistance of the prior debt relief company.
In this instance, Receivership Defendant Cockburn & Associate was the name that the Receivership Defendants used when speaking with customers “purchased” from the debt relief company-law firm, “The Law Office of Cockburn & Associates,” owned by New York attorney Sheila Cockburn and her partner Michael Lupolover, Esq.
Ms. Cockburn told the Receiver’s professionals that her clients were Canadian residents who had made payments into escrow accounts for the purpose of eventually negotiating settlements with their creditors. She stated further that in 2015, she learned that it had become illegal under Canada law for a law firm to provide non-legal debt relief services, and that she therefor wanted and needed to sell the book of business.
Ms. Cockburn’s partner Michael Lupolover, who knew Jeremy Marcus from having sold him debt relief customers previously, contacted Marcus to see if he would be interested in purchasing their debt relief customers, all or most of whom the Receiver understands had escrow accounts or monies held in trust with the Law Office of Cockburn & Associates.
Ms. Cockburn stated that she and Lupolover ultimately sold their 1,500 debt relief clients for $1.45 million to Marcus and the Receivership Defendant he created for the transaction, Cockburn & Associate. The Receiver has confirmed from his analysis of bank records that the Receivership Defendants transferred the purchase price to The Law Office of Cockburn & Associates.
Ms. Cockburn also stated that upon receipt of the purchase money, The Law Office of Cockburn & Associates transferred its clients’ over $2 million in escrow monies to an account established by Receivership Defendant Cockburn & Associate at Bank of Montreal over which Marcus had authority.
The Receiver’s forensic accountants have identified $2,550,000 in escrow/trust monies transferred into Receivership Defendant Cockburn & Associate’s BMO operating account. BMO.
The Receiver’s forensic accountants have determined that this $2,550,000 was then used, along with $1.7 million from Receivership Defendant Administrative Services and $600,000 from Receivership Defendant Halfpay, to purchase Marcus’ waterfront home.”
One of the Receivership Defendants’ promises to prospective customers was that they would improve customers’ credit scores. The Receiver has learned from his investigation that one tactic Defendants used to accomplish this was to report to major credit bureaus that a purported third party lender NGP Enterprises, LLC (“NGP”) had issued loans to consumers and had been making regular monthly loan repayments.
The address reported to the major credit bureaus as the “Creditor Contact Details” is NGP’s according to Sunbiz. But, the phone number provided on the report, (888) 276-0979, is not. Rather, this number rings a dedicated “NGP Hard Line” originally answered at the Pompano Complex, later answered at the Panama office (This number currently rings to the Receiver’s hotline, where all known numbers of the Receivership Defendants have been redirected).
The Receiver’s search of the Receivership Defendants’ e-mail data uncovered emails from Defendant Segrea directing the creation of a special “hard” NGP phone line to receive calls to that number. Segrea also appears to have assigned employees to answer the calls from consumers asking why their credit reports were showing a loan from “NGP Enterprises.”
Reporting an NGP phone number that actually rang at the Receivership Defendants’ offices would have allowed Defendants to deceive credit bureaus and creditors who called to confirm the purported statements in the consumers’ credit reports by NGP.
Employees with this responsibility at various times included Alan Messina at the Pompano Complex and subsequently Allena Tinker in Panama.
The Receivership Defendants also appear to have told their customers that if they failed to timely make payments to the Receivership Defendants, they would report (falsely) that the customers had failed to make payments on a loan to NGP, which they said “WILL have a NEGATIVE effect on your credit score”:
321Financial is pleased to announce that starting on October 15, 2015 we will begin reporting you [sic] loan and payment history to the credit bureaus. Now more than ever it is extremely important that you make your payments on time.
See Ex. G (e-mail from Alan Messina to Craig Smith dated October 8, 2015).
The Receiver issued Hodari Askari, whose LinkedIn page lists him as NGP’s Managing Partner from January 2009 to October 2016, with a turnover demand and served him with a copy of the Preliminary Injunction. Mr. Askari wrote back stating that he has “never done business with Jeremy Lee Marcus or ANY of the defendants or affiliates listed in this case.” – Source