The CFPB Civil Action Against Mission Settlement, Levitis, Lupolover, and Others

The Consumer Financial Protection Bureau (CFPB) took action yesterday in a coordinated effort with the Manhattan U.S. Attorney and took both civil and criminal action against Mission Settlement Agency and others.

Named in the civil complaint filed were Mission Settlement Agency, Mission Abstract, Michael Levitis, Law Office of Michael Levitis, Premier Consulting Group, and Law Office of Michael Lupolover.

Information on the criminal Indictment can be found here. Some employees of Mission Settlement Agency have already pled guilty.

Michael Levitis, an attorney, is also known for his participation, along with his wife Marina Levitis, in a reality television show “Russian Dolls.”

Michael Levitis and wife Marina Levitis.
Michael Levitis and wife Marina Levitis.

In 2011, he was sentenced to three years probation and fined $15,000 for lying to FBI agents about serving as a bag man in a scheme to bribe then-state Sen. Carl Kruger, who’s now imprisoned for corruption.

The civil complaint filed by the CFPB made the following allegations.

Mission is a for-profit company that is located and does business in this district.

Mission has used office space at 280 Madison Avenue, Suite 300, New York, NY 10017 and has offices at 2713 Coney Island Avenue, Brooklyn, NY 11235.

The Law Office of Michael Levitis is a law firm located at 1729 E. 12th Street, Brooklyn, NY 11229. It does business in this district.

Premier is a for-profit company with offices at 180 Sylvan Avenue, 2nd Floor, Englewood Cliffs, NJ 07632 and 1130 Hooper Avenue, Toms River, NJ 08753. It does business in this district.

The Law Office of Michael Lupolover is a law firm located at 180 Sylvan Avenue, 2nd Floor, Englewood Cliffs, NJ 07632. It does business in this district.

Each Corporate Defendant engages in offering or providing a consumer financial product ors ervice and is therefore a “covered person” under the CFPA. 12 U.S.C. 5481(15)(A)(viii)(II), (6).

Levitis is the principal of Mission and the Law Office of Michael Levitis, and is heavily involved in their day-to-day operations. He approved, ratified, endorsed, directed, controlled, managed, and otherwise materially participated in the conduct of their affairs. Levitis is a “related person” under the CFPA. 12 U.S.C. 5481(25). Because of his status as a related person, Levitis is a “covered person” for purposes of the CFPA. Id. Levitis does business in this district.


Since at least September 2010, Defendants have marketed and sold debt-relief services to consumers. Defendants attracted financially distressed consumers through phone calls, mailings, and other solicitations promising substantial reductions in outstanding debts owed to unsecured creditors. In the course of offering their services, Defendants unlawfully collected fees in advance of providing any debt-relief services.

In addition, since at least July 2011, Mission and Levitis committed deceptive and unfair acts and practices causing substantial financial injury to consumers. Specifically, they misled consumers, impersonated a government agency, and gave false statements regarding fees for Mission’s debt-relief service. Instead of being applied towards repayment of consumers’ debts, a large percentage of the amounts that consumers paid into Mission’s debt-relief services program went to Mission, which provided scant meaningful assistance to resolve consumers’ debts and often left consumers in worse financial positions than before they enrolled.


The Corporate Defendants sold or offered to sell debt-relief services to consumers. In exchange for a fee, the Corporate Defendants promised to renegotiate, settle, reduce, or otherwise alter the terms of at least one debt between a consumer and one or more unsecured creditors or debt collectors in accordance with a settlement agreement or other contractual agreement executed by the consumer.

The Corporate Defendants marketed their debt-relief services via the U.S. Mail, the Internet, and outbound or inbound telephone calls to or from consumers, including via at least more than one interstate telephone call.

The Corporate Defendants requested or received enrollment fees, processing fees, debt-relief service fees, and other types of fees in advance of settling at least one of the consumer’s debts.

Each of the Corporate Defendants separately entered into a contract with a payment processor to receive services for the management, processing, and administration of payments. Under this contract, the payment processor managed the savings account (Dedicated Account) of each and every consumer who contracted for debt-relief services from each of the Corporate Defendants.

When consumers signed up to receive debt-relief services through the Corporate Defendants’ respective debt-relief programs, the Corporate Defendants directed consumers to sign up for the Dedicated Account with the payment processor. The Corporate Defendants also instructed consumers to stop paying their creditors and instead to start making payments into the Dedicated Account managed by the payment processor.

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The Corporate Defendants represented to consumers that, if and when a consumer’s Dedicated Account reached a sufficient balance, they would instruct the payment processor to transmit funds to a consumer’s creditors to help satisfy the consumer’s debts.

At all times relevant to this Complaint, the Corporate Defendants required and relied on assistance from the payment processor to collect and disburse monies through the consumer’s Dedicated Accounts.

Consistent with the Corporate Defendants’ direction, the payment processor:

  • (i) withdrew funds from a consumer’s bank account through ACH transfer and deposited them into the Dedicated Account, and
  • (ii) transmitted funds from the Dedicated Account to itself and to the
    Corporate Defendants to cover processing and servicing fees, including the fee the Corporate
    Defendants charge to consumers for its debt-relief services.

The transactions managed by the payment processor reflected that funds were routinely transferred out of a consumer’s Dedicated Account to pay the Corporate Defendant’s debt-relief fees before payments went to any creditors.

With respect to Dedicated Accounts that were established on or after October 27, 2010, the effective date of the TSR’s advance-fee ban, Mission and the Law Office of Michael Levitis collected fees from consumers in advance of settling the consumers’ debts totaling approximately $1.1 million.

With respect to Dedicated Accounts that were established on or after October 27, 2010, Premier collected fees from consumers in advance of settling the consumers’ debts totaling approximately $187,830.

With respect to Dedicated Accounts that were established on or after October 27, 2010, the Law Office of Michael Lupolover collected fees from consumers in advance of settling the consumers’ debts totaling approximately $111,809.


At Levitis’s direction, Mission impersonated a government agency to induce a higher volume of sales calls from consumers who incorrectly believed that Mission offered a government program. Mission routinely disseminated a written solicitation to consumers in an envelope bearing an image of the Great Seal of the United States for what Mission called the “Office of Disbursement.” Mission circulated this solicitation in order to cause consumers to believe Mission was affiliated with a government program and to enhance Mission’s ability to attract financially distressed consumers to receive debt-relief services. Mission’s debt-relief service was in fact not affiliated with the government.

Mission also misled consumers about the timing of fees for debt-relief services. Mission falsely asserted in the written solicitation that there were no “Upfront Fees” when in fact Mission charged them. Mission, at Levitis’s direction, did not inform consumers that Mission charges advance fees, and otherwise concealed and misrepresented the size of Mission’s fees.

Mission, at Levitis’s direction, also committed unfair acts and practices causing consumers substantial injury. Despite promising consumers that it would settle their unsecured debts for typically 55% of consumers’ total outstanding credit-card balances, Mission often:

  • (i) concealed the fact that creditors will not be paid by the time that consumers expect, or might not be paid at all;
  • (ii) charged exorbitant debt-relief services fees often without settling any debts; and
  • (iii) left consumers in worse financial positions than before they enrolled in Mission’s program.

Specifically, many consumers enrolled in Mission’s program received zero or scant benefit in the form of settled debts and suffered net losses of approximately $1,300 to $3,000 per person. Consumers often learned from creditors that Mission had never contacted them. Unaware that this would occur, consumers had stopped communicating with and paying their creditors based on Mission’s representation that it would handle consumers’ debts on their behalf and based on Mission’s instruction to cease communicating with the creditors and to cease paying these creditors directly. Because Mission did not often make negotiated payments to creditors as it promised it would, many consumers suffered additional financial injury in the form of credit-card penalties, higher interest rates, and adverse effects on their credit. Many consumers faced lawsuits commenced by their creditors or had to file for bankruptcy.

By virtue of Mission’s own conduct, the substantial injury that Mission caused was not reasonably avoidable by consumers: Mission systematically erected barriers to prevent consumers from obtaining information regarding the disadvantages of its debt-relief program.

Whether Mission was originating new consumer accounts or working to maintain existing consumer accounts, Mission communicated with consumers in a manner that prevented consumers from learning of the debt-relief program’s risks, costs, and conditions — the disclosures of which would have permitted consumers to ascertain the likelihood of consumer injury. For example:

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  • a. At Levitis’s direction, Mission staff enrolled as many consumers as possible regardless of whether consumers understood Mission’s fee structure or other attributes of its debt-relief program.
  • b. Levitis directed Mission’s staff to conceal the debt-relief services fees when enrolling new customers. If a consumer made specific inquiries regarding fees, Levitis told staff to explain that the fee was embedded in the overall amount that consumers contributed on a monthly basis to their Dedicated Accounts so that Mission could obscure how much money accrued to pay off underlying debts versus went to Mission. If the consumer continued seeking more information, Levitis, at times, allowed the Mission employees to reveal the size of the fee (18%) but even then instructed them to withhold other information, including the timing of fees. Mission staff followed Levitis’s instructions.
  • c. Mission employees avoided answering consumers’ questions about termination policies or the consequences of ineffective debt negotiations. Mission staff, at Levitis’s direction, used deliberate obfuscation — by providing nonresponsive or misleading answers — to confuse consumers about the program’s risks and costs. At other times, Mission staff dodged consumers’ questions by assuring consumers that answers would be provided by more knowledgeable Mission employees during a later meeting with the consumers — despite knowing that no such meeting would occur.
  • d. To retain the exorbitant fees paid into the program by consumers, Levitis instructed staff during periodic staff meetings not to issue refunds and to delay responding to consumers’ refund requests until they ceased to be made.
  • e. Before obtaining the consumer’s consent to pay for the program, Mission failed to disclose the time by which it would make a bona fide settlement offer to the consumer’s creditors or debt collectors, or the amount that the consumer would have to accumulate in the Dedicated Account before Mission would initiate settlement attempts or make a bona fide settlement offer to the consumer’s creditors.

Mission’s conduct as described above ensured that consumers could not avoid substantial injury. Mission prevented consumers from learning information that would lead consumers to decide to forgo participation in the program.

Mission’s conduct did not generate any meaningful countervailing benefit to consumers or to competition.


Levitis managed Mission’s day-to-day operations, including activities that form the basis for this Complaint. Levitis approved the use of marketing materials bearing counterfeit government seals, demanded regular reports on sales and consumer complaints, directed employees to provide misleading information to consumers, and determined the outcome of consumer complaints and refund requests. Accordingly, Levitis engaged in the sale of debt-relief services provided by Mission.

Levitis also designed and implemented the business model through which Mission charged advance fees from consumers while often providing consumers little to no debt-relief services.

Levitis also retained payment processors on Mission’s behalf.

Since Mission’s inception, Levitis knew that Mission routinely charged fees before settling consumers’ debts and that Mission engaged in unfair and deceptive acts and practices. – Source

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