Collection Agency Founder Arrested by Feds and Charged in $5 million Fraud Case

The  U.S. Attorney in the Southern District of Indiana announced Wednesday the arrest of the owner of a former debt collection agency and the filing of fraud and other charges related to actions he took in the financing of his company and misrepresentations he made concerning his own financial situation.

Acting U.S. Attorney Josh Minkler said that Todd Wolfe defrauded a financial institution and at least one individual investor to keep his firm afloat.

Since 2009, Wolfe operated DECA Financial services in Fishers, Indiana. DECA was a full service credit collections company which at one time employed nearly 75 individuals and whose principal activity was to collect delinquent loans for health care, student loans, and financial services.

On two occasions, Wolfe allegedly filed false financial reports to BMO Harris bank inflating the assets of his company. The false reports allowed Wolfe to obtain lines of credit which he in turn used for personal expenses. Over a two and one half year period, the credit extended to Wolfe increased from $1 million to $7.5 million. Affidavits show he used some of the money to make payments on his personal residence, an automobile, personal credit card accounts, and a lake house.

“Defrauding a financial institution affects all honest, hardworking individuals,” said Minkler. “Anyone who uses their position to abuse the public’s trust will be held strictly accountable.”

Minkler further alleged that in June 2013, Wolfe agreed to sell an individual $1 million in DECA stock which represented 5 percent ownership in the company. The victim was never repaid anything for his stock purchase. Wolfe allegedly used some of the $1 million to purchase a 2011 Audi 5S automobile.

In February of this year, creditors forced Wolfe into bankruptcy. An attorney representing Wolfe and DECA filed a motion with the court stating Wolfe had a living trust worth over $14 million which could be used to repay creditors. The actual value of the trust was $52,000. The misrepresentation likely delayed the appointment of an independent trustee to oversee the operation of DECA and delay creditor’s access to books and records.

The charges filed Wednesday include bank fraud, wire fraud, and bankruptcy fraud. The government’s investigation was conducted by the FBI and the U.S. Bankruptcy Trustee.