Operator of Scam Collection Agency Pleads Guilty to Federal Charges

Kirit Patel of California has pleaded guilty to four counts of mail fraud and wire fraud after an extensive federal investigation of the debt collection agency he ran. The FTC and prosecutors noted that many of the debts Patel was attempting to collect did not exist.

Patel’s collectors operated primarily from a call center in India. The reps there would call Americans claiming that they owed money. Many of the consumers had no recollection of the original debts.

The scheme involved more than 2.7 million calls to at least 600,000 different phone numbers nationwide. In less than two years, it fraudulently collected more than $5.2 million.

Patel’s scam was halted in 2012 when the FTC won a court order to freeze operations and seize assets while it investigated further. At the time, the FTC specifically charged Patel and his company with violations of the Fair Debt Collection Practices Act (FDCPA).

Often pretending to be American law enforcement agents such as “Officer Mike Johnson” or representatives of fake government agencies like the “Federal Crime Unit of the Department of Justice,” callers from India who were working with Patel would harass consumers with back-to-back calls, according to the FTC. One consumer reported that the caller threatened to have her children taken away if she did not pay, according to court documents.

But it was later discovered that the debts were almost entirely fake and that the operation was merely a scam.

Eventually, the government charged him 21 counts of mail and wire fraud.

Sentencing is slated for February. According to federal guidelines, Patel may face as much as 20 years in prison and a $250,000 fine, although that is unlikely considering his guilty plea.