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Case 1:14-cv-00490-RJA-JJM Document 90 

UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF NEW YORK 

FEDERAL TRADE CO.l'vfMISSION and 

PEOPLE OF TIIE ST ATE OF NEW YORK, 

by ERIC T. SCHNEIDERMAN, Attorney 

General of the State ofNew York, 

Plaintiffs, 

v. 

NATIONAL CHECK REGISTRY, LLC, et 

al., 

Defendants. 

Case No.: 14-cv-490-A 

STIPULATION TO ENTER INTO A 

FINAL ORDER FOR PERMANENT 

INJUNCTION AND SETTLEMENT OF 

CLAIMS 

Plaintiffs Federal Trade Commission ("FTC") and the Pe9ple of the State of New York 

("State of New York," and, collectively with the FTC, "Plaintiffs") commenced this civil action 

on June 23, 2014, pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 

15 U.S.C. § 53(b), Section 814(a) of the Fair Debt Collection Practices Act ("FDCPA"), 15 

U.S.C. § 1692/(a), N.Y. Executive Law§ 63(12), and N.Y. General Business Law Articles 22-A, 

§ 349, and 29-H, § 602. On motion by Plaintiffs, on June 24, 2014, this Court entered a 

temporary restraining order ("TRO") with asset freeze, appointment of a receiver, and other 

equitable relief against Defendants National Check Registry, LLC, Check Systems, LLC, 

Interchex Systems, LLC, American Mutual Holdings, Inc., Goldberg Maxwell, LLC, Morgan 

Jackson, LLC, Mullins & Kane, LLC, Buffalo Staffing, Inc., eCapital Services, LLC, Joseph C. 

Bella, III, Diane L. Bella, and Luis A. Shaw. On July 10, 2014, this Court entered a Stipulated 

Preliminary Injunction against the Defendants. The FTC, State ofNew York, and Defendants 

National Check Registry, LLC, Check Systems, LLC, Interchex Systems, LLC, American 

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Mutual Holdings, Inc., Goldberg Maxwell, LLC, Morgan Jackson, LLC, Mullins & Kane, LLC, 

Buffalo Staffing, Inc., eCapital Services, LLC, Joseph C. Bella, III, Diane L. Bella, and Luis A. 

Shaw, have stipulated and agreed to the entry of this final order for permanent injunction and 

settlement of claims ("Order") to resolve all matters in dispute in this action. 

THEREFORE, IT IS ORDERED as follows: 

FINDINGS OFF ACT 

1. The Court has jurisdiction over this matter. 

2. The Complafot charges that Defendants participated in unlawful debt collection practices 

in violation of Section 5 of the FTC Act, 15 u.s;c. § 45, the FDCPA, 15 U.S.C. §§ 1692 

- 1692p, N.Y. Executive Law§ 63(12), N.Y. General Business Law § 349, and N.Y. 

General Business Law§ 601. 

3. · Defendants neither admit nor deny any of the allegations in the Complaint, except as 

specifically stated in this Order. Only for purposes of this action, Defendants admit the 

facts necessary to establish jurisdiction. 

4. Defendants waive any claim that they may have under the Equal Access to Justice Act, 

28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order, and 

agree to bear their own costs and attorney fees. 

5. Defendants and Plaintiffs waive all rights to appeal or otherwise challenge or contest the 

validity of this Order. 

DEFINITIONS 

For purposes of this Order, the following definitions apply: 

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1. "Credit repair services" means using any instrumentality of interstate commerce or the 

mails to sell, provide, or perform any service, in return for the payment of money or other 

valuable consideration, for the express or implied purpose of (i) improving any 

consumer's credit record, credit history, or credit rating, or (ii) providing advice or 

assistance to any consumer with regard to any activity or service described in clause (i). 

2. "Debt" means any obligation or alleged obligation to pay money arising out of a 

transaction, whether or not such obligation has been reduced to judgment. 

3. "Debt collection activities" means any activities of a debt collector to collect or attempt 

to collect, directly or indirectly, a debt owed or due, or asserted to be owed or due, 

another. 

4. "Debt collector" means any person who uses any instrumentality of interstate commerce 

or the mails in any business the principal purpose of which is the collection of any debts, 

or who regularly collects or attempts to collect, directly or indirectly, debts owed or due 

01· asserted to be owed or due another. The term also includes any creditor who, in the 

process of collecting its own debts, uses any name other than its own which would 

indicate that a third person is collecting or attempting to collect such debts. The term 

also includes any person to the extent such person receives an assignment or transfer of a 

debt in default solely for the purpose of facilitating collection of such debt 

5. "Financial-related product or service" means any product, service, plan, or program 

represented, expressly or by implication, to: 

A. provide to any consumer, arrange for any consumer to receive, or assist any 

consumer in receiving, an extension of consumer credit; 

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B. provide to any consumer, arrange for any consumer to receive, or assist any 

consumer in receiving, credit repair services; or 

C. provide to any consumer, arrange for any consumer to receive, or assist any 

consumer in receiving, any secured or unsecured debt relief product or service. 

6. "Person" means a natural person, an organization or other legal entity, including a 

corporation, partnership, sole proprietorship, limited liability company, association, 

cooperative, or any other group or combination acting as an entity. 

7. "Receivership Entities" means the Corporate Defendants, with the exception of Buffalo 

Staffing, Inc., and any successors, assigns, affiliates, and subsidiaries that conduct any 

business related to the Defendants' debt collection business and that the Receiver has 

reason to believe are owned or controlled in whole or in part by any of the Defendants. 

8. "Secured or unsecured debt relief product or service" means, with respect to any 

mortgage, loan, debt, or obligation between a person and one or more secured or 

unsecured creditors or debt collectors, any product, service~ plan, or program represented, 

expressly or by implication, to; (A) negotiate, settle, or in any way alter the terms of 

payment or other terms of the mortgage, loan, debt, or obligation, including but not 

limited to, a reduction in the amount of interest, principal balance, monthly payments, or 

fees owed by a person to a secured or unsecured creditor or debt collector; (B) stop, 

prevent, or postpone any mortgage or deed of foreclosure sale for a person's dwelling, 

any other sale of collateral, any repossession of a person's dwelling or other collateral, or 

otherwise save a person's dwelling or other collateral from foreclosure or repossession; 

(C) obtain any forbearance or modification in the timing of payments from any secured or 

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unsecured holder of any mortgage, loan, debt, or obligation; (D) negotiate, obtain, or 

arrange any extension of the period of time within which the person may (i) cure his or 

her default on the mortgage, loan, debt, or obligation, (ii) reinstate his or her mortgage, 

loan, debt, or obligation, (iii) redeem a dwelling or other collateral, or (iv) exercise any 

right to reinstate the mortgage, loan, debt, or obligation or redeem a dwelling or other 

collateral; (E) obtain any waiver of an acceleration clause or balloon payment contained 

in any promissory note or contract secured by any dwelling or other collateral; or (F) 

negotiate, obtain, or arrange (i) a short sale of a dwelling or other collateral, (ii) a deedin-lieu of foreclosure, or (iii) any other disposition of a mortgage, loan, debt, or 

obligation other than a sale to a third party that is not the secured or unsecured loan 

holder. The foregoing shall include any manner of claimed assistance, including, but not 

limited to, auditing or examining a person's application for the mortgage, loan, debt, or 

obligation. 

9. "Individual Defendants" means Joseph Bella, m, Diane Bella, and Luis Shaw. 

10. "Corporate Defendants" means National Check Registry, LLC, Check Systems, LLC, 

Interchex Systems, LLC, American Mutual Holdings, Inc., Goldberg Maxwell, LLC, 

Morgan Jackson, LLC, Mullins & Kane, LLC, Buffalo Staffing, Inc., eCapital Services, 

LLC, and their successors, assigns, affiliates, or subsidiaries, and each of them by 

whatever names each might be known. 

11. "Defendants" means the Individual Defendants and the Corporate Defendants, 

individually, collectively, or in any combination, and each of them by whatever names 

each might be known. 

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12. The tenns "and" and "or" shall be construed conjunctively or disjunctively as necessary 

to make the applicable phrase or sentence inclusive rather than exclusive. 

ORDER 

BAN ON DEBT COLLECTION ACTIVITIES 

I. IT IS THEREFORE ORDERED that the Defendants, whether acting directly or 

through any other person, are permanently restrained and enjoined from: 

A. Engaging in debt collection activities; 

B. Assisting others engaged in debt collection activities; and 

C. Adve11ising, marketing, promoting, offering for sale, or selling, or assisting others 

engaged in the advertising, marketing, promoting, offering for sale, or selling, of 

any portfolio of consumer or commercial debt or any program that gathers, 

organizes, or stores consumer information relating to a debt or debt coUection 

activities. 

PROHIBITED MISREPRESENTATIONS RELATING TO FINANCIALRELATED PRODUCTS OR SERVICES 

II. IT IS FURTHER ORDERED that the Defendants and their officers, agents, employees, 

and attorneys, and those persons or entities in active concert or participation with any of 

them who receive actual notice of this Order by personal service, facsimile transmission, 

email, or otherwise, whether acting directly or through any corporation, subsidiary, 

division, or other device, in connection with the advertising, marketing, promotion, 

offering for sale or sale of any financial-related product or service, are hereby 

permanently restrained and enjoined from: 

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A. Misrepresenting or assisting others in misrepresenting, expressly or by 

implication, any material fact, including but not limited to: 

1. The terms or rates that are available for any loan or other extension of 

credit; 

2. Any person's ability to improve or otherwise affect a consumer's credit 

record, credit history, credit rating, or ability to obtain credit; 

3. That any person can improve any consumer's credit record, credit history, 

or credit rating by pennanently removing negative information from the 

consumer's credit record, credit history, or credit rating, even where such 

information is accurate and not obsolete; 

4. Any aspect of any secured or unsecured debt relief product or service, 

including but not limited to, the amount of savings a consumer will 

receive from purchasing, using, or enrolling in such secured or unsecured 

debt relief product or service; the amount of time before which a consumer 

will receive settlement of that consumer's debts; or the reduction or 

cessation of collection calls; 

5. . That a consumer will receive legal representation; 

6. That any particular outcome or result from a financial-related product or 

service is guaranteed, assured, highly likely or probable, or very likely or 

probable; 

7. The nature or terms of any refund, cancellation, exchange, or repurchase 

policy, including, but not limited to, the likelihood of a consumer 

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obtaining a full or partial refund, or the circumstances in which a full or 

partial refund will be provided to the consumer; and 

8. Any other fact material to consumers concerning any financial-related 

product or service, such as: the total costs; any material restrictions, 

limitations, or conditions; or any material aspect of its perfonnance, 

efficacy, nature, or central characteristics; and 

B. Advertising or assisting others in advertising credit terms other than those terms 

that actually are or will be arranged or offered by a creditor or lender. 

CONSUMER INFORMATION 

III. IT IS FURTHER ORDERED that the Defendants and their officers, agents, employees, 

and attorneys, and those persons or entities in active concert or participation with any of 

them who receive actual notice of this Order by personal service, facsimile transmission, 

email, or otherwise, whether acting directly or through any corporation, subsidiary, 

division, or other device, are permanently restrained and enjoined from directly or 

indirectly: 

A. Failing to provide sufficient consumer information to enable the Plaintiffs to 

administer efficiently consumer redress. If a representative of tb.e Plaintiffs 

requests in writing any information related to redress, the Defendants must 

provide it, in the form prescribed by the Plaintiffs, within 14 days. 

B. Disclosing, using, or benefitting from consumer information, including the name, 

address, telephone number, email address, social security number, other 

identifying information, or any data that enables access to a customer's account 

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(including a credit card, bank account, or other fmancial account) of any person 

that any Defendant obtained prior to entry of this Order in connection with the 

collection or attempted collection of any debt. 

C. Failing to destroy such consumer information in all forms in their possession, 

custody, or control within thirty (30) days after receipt of written direction to do 

so from a representative of the Plaintiffs. 

D. Provided, however, that consumer information need not be disposed of, and may 

be disclosed, to the extent requested by a government agency or required by a 

law, regulation, or court order. 

MONETARY JUDGMENT AND PARTIAL SUSPENSION 

IV. IT IS FURTHER ORDERED that 

A. Judgment in the amount of EIGHT MILLION THREE HUNDRED NINETY 

FIVE THOUSAND FOUR HUNDRED TWENTY THREE dollars ($8,395,423) 

is entered in favor of the Plaintiffs against the Defendants, jointly and severally, 

as equitable monetary relief. 

B. In partial satisfaction of the judgment against the Defendants: 

1. All financial institutions holding accounts in the name of, or for the 

benefit of, any Receivership Entity shall, within ten (10) business days 

from receipt of a copy of this order, transfer as directed below all funds, if 

any, in such accounts, including, but not limited to: 

a. Bank of America, N.A., shall, within ten (10) business days from 

receipt of a copy of this Order, transfer to the Receiver or her 

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designated agent, all funds, if any, in account numbers xxxx 

in the name of Check Systems, LLC, xxxx in the name of 

American Mutual Holdings, Inc., xxxx. in the name of 

American Mutual Holdings, Inc., xxxx in the name of 

eCapital Services, LLC., and xxxx in the name of Buffalo 

Staffing, Inc.; 

b. Global Payments shall, within ten (10) business days from receipt 

of a copy of this Order, transfer to the Receiver or her designated 

agent, all funds, if any, in account number xxxx in the name 

of American Payment Services; xxxx in the name oflnterchex 

Systems LLC; and xxx in the name of Check Systems, LLC. 

2. Tampa Bay Federal Credit Union shall, within (10) business days from 

receipt of a copy of this Order, transfer to the Receiver or her designated 

agent, all funds, if any, in account number xxxx in the name of Diane 

Bella. 

C. The Receiver is authorized and directed to liquidate the vehicles identified in Item 

t 6 of the Financial Statement oflndividual Defendant Joseph C. Bella III dated 

July 2, 2014, including the (1) 1969 Pontiac GTO, (2) 2013 Infiniti QX56, (3) 

1998 Donzi X275, and (4) 1980 Donzi Hornet, without further order of this Court. 

To facilitate the Receiver's completion of this directive, Individual Defendant 

Joseph C. Bella III is ordered to 

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1. Take all steps necessary to assist the Receiver in the sale of the vehicles, 

including but not limited to, transferring possession and title of any 

vehicle to any person identified by the Receiver and not adding any 

encumbrances to any vehicle. 

2. As necessary, execute documents, within three (3) days of a request from 

the Plaintiffs or the Receiver, to facilitate the liquidation of any vehicle. 

3. Maintain the vehicles in good repair and to timely pay all taxes, fees, and 

all other attendant expenses related to the maintenance and ownership of 

the vehicles until the vehicles are liquidated as required by this Subsection 

IV.C. 

4. Maintain insurance on each vehicle in an amount not less than the full 

replacement value of each vehicle until each vehicle is liquidated as 

required by this Subsection IV.C. In the event that any vehicle suffers any 

loss or damage covered by such insurance policy, Individual Defendant 

Joseph C. Bella, III is ordered to make such claims that are permitted by 

the insurance policy and shall assign or remit any insurance payment he 

receives as a result of such loss or damage to the Receiver or her 

designated agent. 

D. Individual Defendant Joseph C. Bella III shall pay to the Plaintiffs an additional 

ONE HUNDRED TWELVE THOUSAND DOLLARS ($112,000). In complying 

with this subsection, Individual Defendant Joseph C. Bella III is ordered, within 

five (5) days of entry of this Order, to transfer all funds held in trust by Counsel 

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for Individual Defendant Joseph C. Bella Ill to the Receiver or her designated 

agent. The remaining payment must be made by no later than ten (10) days after 

entry of this Order. The payment shall be made in accordance with instructions 

provided by the Receiver or her designated agent. Upon entry of this judgment, 

Defendant Joseph C. Bella IIII shall not encumber any real estate he owns, unless 

he does so to facilitate the $112,000 payment. 

E. As set forth in Section V, the Receiver is directed to liquidate assets held by the 

Receiver and, after satisfaction of any Court-authorized payments, transfer the 

remaining assets and net proceeds, if any, from the sale of these assets to the FTC. 

Any assets or proceeds turned over to the Plaintiffs as part of this Section shall be 

applied to the Judgment, with the remainder of the Judgment suspended as 

described in this Section. 

F. Upon the asset transfers and payments identified in this Section, the remainder of 

the judgment is suspended as to the Individual Defendants and Corporate 

Defendant Buffalo Staffing, Inc., subject to the Subsections below. 

G. The asset freeze is modified to permit the transfers identified in this Section. 

Upon completion of those transfers, the asset freeze as to the Defendants is 

dissolved. 

H. Plaintiffs' agreement to the suspension of the judgment against the Individual 

Defendants and Corporate Defendant Buffalo Staffing, Inc., is expressly premised 

upon the truthfulness, accuracy, and completeness of the Defendants' sworn 

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financial statements and related documents (collectively, "financial statements") 

submitted to Plaintiffs, including: 

1. The financial statement of Defendant Joseph C. Bella, III and attachments, 

submitted to the FTC on July 2, 2014; 

2. The financial statement of Defendant Diane Bella and attachments, 

submitted to the FTC on June 30, 2014; 

3. .The financial statement of Defendant Luis A. Shaw and attachments, 

submitted to the FTC on June 30, 2014; 

4. Joseph C. Bella, Ill's responses to Plaintiff Federal Trade Commission's 

First Set oflnterrogatories to Defendant Joseph C. Bella III Pursuant to 

the Stipulated Preliminary Injunction, dated February 11, 2015; and 

5. Joseph C. Bella, Ill's sworn statement, taken by Plaintiffs on February 17, 

2015. 

I. The suspension of the judgment will be lifted as to any Defendant if, upon motion 

by the Plaintiffs, the Court finds that Defendant failed to disclose any material 

asset, materially misstated the value of any asset, or made any other material 

misstatement or omission in the financial statements identified above. 

J. If the suspension of the judgment is lifted, the judgment becomes immediately 

due as to that Defendant in the amount specified in Subsection A above (which 

the parties stipulate only for purposes of this Section represents the unjust 

enrichment alleged in the Complaint), less any payment previously made pursuant 

to this Section, plus interest computed from the date of entry of this Order. 

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K. All money paid to Plaintiffs pursuant to this Order may be deposited into a fund 

administered by Plaintiffs or their designee to be used for equitable relief, 

including consumer redress and any attendant expenses for the administration of 

any redress fund. If representatives of the Plaintiffs decide that direct redress to 

consumers is wholly or partially impracticable or money remains after redress is 

completed, Plaintiffs may apply any remaining money for such other equitable 

relief (including consumer information remedies) as Plaintiffs determine to be 

reasonably related to Defendants' practices alleged in the Complaint. Plaintiffs 

shall retain authority and sole discretion over the division among Plaintiffs of any 

funds not used for equitable relief. Any funds paid to the FTC not used for 

equitable relief shall be deposited to the U.S. Treasury as disgorgement. Any 

funds paid to the State of New York not used for equitable relief may be used to 

the full extent authorized by the State's laws, including but not limited to, as 

payment for the State's costs of investigating and litigating the instant ca.se. 

Defendants have no right to challenge any actions the Plaintiffs or their 

representatives may take pursuant to this Subsection. 

L. The Defendants relinquish dominion and all legal and equitable right, title, and 

interest in all assets transferred pursuant to this Order and may not seek the return 

of any assets. 

M. The facts alleged in the Complaint will be taken as true, without further proof, in 

any subsequent civil litigation, by or on behalf of Plaintiffs, in a proceeding to 

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enforce their rights to any payment or monetary judgment pursuant to this Order, 

such as a nondischargeability complaint in any bankruptcy case. 

N. The facts alleged in the Complaint establish all elements necessary to sustain an 

action by Plaintiffs pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 

U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such 

purposes. 

0. The Defendants acknowledge that their Taxpayer Identification Numbers (Social 

Security Numbers or Employer Identification Numbers), which the Defendants 

previously submitted to Plaintiffs, may be used for collecting and reporting on 

any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 

7701. 

P. Pursuant to Section 604(a)(l) of the Fair Credit Reporting Act, 15 U.S.C. § 

168lb(a)(l), any consumer reporting agency may furnish a consumer report 

concerning any of the Defendants to Plaintiffs, which shall oe used for purposes 

of collecting and reporting on any delinquent amount arising out of this Order. 

CONTINUATION OF RECEIVER 

V. IT IS FURTHER ORDERED that the Receiver must complete all duties, including, but 

not limited to, winding up the Receivership Entities and liquidating all assets; within 120 

days after entry of this Order, but any party or the Receiver may request that the Court 

extend that Receiver's term for good cause. 

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COOPERATION WITH PLAINTIFFS AND RECEIVER 

VI. IT IS FURTHER ORDERED that the Defendants must fully cooperate with 

representatives of any Plaintiff and the Receiver in this case and in any investigation 

related to or associated with the transactions or the occurrences that are the subject of the 

Complaint. The Defendants must provide truthful and complete information, evidence 

and testimony. The Individual Defendants must appear and the Corporate Defendants 

must cause their officers, employees, representatives, or agents to appear for interviews, 

discovery, hearings, trials, and any other proceedings that a representative of any Plaintiff 

or the Receiver may reasonably request upon 5 days written notice, or other reasonable 

notice, at such places and times as a representative of any Plaintiff or the Receiver may 

designate, without the service of a subpoena. 

ORDER ACKNOWLEDGMENTS 

VII. IT IS FURTHER ORDERED that the Defendants obtain aclmowledgments of receipt 

of this Order: 

A. Each Defendant, within 7 days of entry of this Order, must submit to the FTC and 

the New York Office of the Attorney General, an acknowledgment of receipt of 

this Order sworn under penalty of perjury. 

B. For 20 years after entry of this Order, the Individual Defendants for any business 

that any of the Individual Defendants, individually or collectively with any other 

Defendant, is the majority owner or directly or indirectly controls, and the 

Receivership Entities, must deliver a copy of this Order to: (I) all principals, 

officers, directors, and LLC managers and members; (2) all employees, agents, 

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and representatives who participate in any offering or provision of any FinancialRelated Products or Services; and (3) any business entity resulting from any 

change in structure as set forth in the Section titled Compliance Reporting. 

Delivery must occur within 7 days of entry of this Order for current personnel. 

To all others, delivery must occur before they assume their responsibilities. 

C. From each individual or entity to which a Defendant delivered a copy of this 

Order, that Defendant must obtain, within 30 days, a signed and dated 

acknowledgment of receipt of this Order. 

COMPLIANCE REPORTING 

VITI. IT IS FURTHER ORDERED that the Defendants make timely submissions to the FTC: 

A. One year after entry of this Order, each Defendant must submit a compliance 

report, sworn under penalty of perjury. 

1. Each Defendant must: (a) identify the primary physical, postal, and email 

and telephone number, as designated points of contact, which 

representatives of the FTC may use to communicate with such Defendant; 

(b) identify all of that Defendant's businesses by all of their names, 

telephone numbers, and physical, postal, email, and Internet addresses; ( c) 

describe the activities of each business, including the goods and services 

offered, the means of advertising, marketing, and sales, and the 

involvement of any other Defendant (which the Individual Defendant must 

describe if he or she knows or should know due to his or her own 

involvement); (d) describe in detail whether and how that Defendant is in 

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compliance with each Section of this Order; and (e) provide a copy of 

each Order Acknowledgment obtained pursuant to this Order, unless 

previously submitted to the FTC; 

2. Additionally, each Individual Defendant must: (a) identify all telephone 

numbers and all physical, postal, email, and Internet addresses, including 

all residences; (b) identify all business activities, including any business 

for which the Individual Defendant performs services whether as an 

employee or otherwise and any entity in which the Individual Defendant 

has any ownership interest; and ( c) describe in detail the Individual 

Defendant's involvement in each such business, inclμding title, role, 

responsibilities, participation, authority, control, and any ownership. 

B. Individual Defendant Diane Bella, for 10 years after entry of this Order, and each 

other Defendant, for 20 years after entry of this Order, must submit a compliance 

notice, sworn under penalty of perjury, within 14 days of any change in the 

following: 

1. Each Defendant must report any change in: (a) any designated point of 

contact; or (b) the structure of any Corporate Defendant or any entity that 

such Defendant has any ownership interest in or controls directly or 

indirectly that may affect compliance obligations arising under this Order, 

including: creation, merger, sale, or dissolution of the entity or any 

subsidiary, parent, or affiliate that engages in any acts or practices subject 

to this Order. 

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2. Additionally, each Individual Defendant must report any change in: (a) 

name, including aliases or fictitious name, or residence address; .or (b) title 

or role in any business activity, including any business for which the 

Individual Defendant performs services whether as an employee or 

otherwise and any entity in which the Individual Defendant has any 

ownership interest, and identify its name, physical address, and any 

Internet address of the business or entity. 

C. Each Defendant must submit to the FTC notice of the filing of any bankruptcy 

petition, insolvency proceeding, or similar proceeding by or against such 

Defendant within 14 days of its filing. 

D. Any submission to the FTC required by this Order to be sworn under penalty of 

perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by 

concluding: "I declare under penalty of perjury under the laws of the United 

States of America thatthe foregoing is true and correct. Executed on: __ " and 

supplying the date, signatory's full name, title (if applicable), and signature. 

E. Unless otherwise directed by a FTC representative in writing, all submissions to 

the FTC pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by 

overnight courier (not the U.S. Postal Service) to: Associate Director for 

Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 

Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: 

FTC v. National Check Registry, Matter Number Xl 40043. 

Page 19 of24 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 20 of 45

Case 1:14-cv-00490-RJA-JJM Document 90 Filed 07/29/15 Page 20 of 25 

RECORDKEEPING 

IX. IT IS FURTHER ORDERED that the Defendants must create certain records for 20 

years after entry of the Order, and retain each such record for 5 years. Specifically, the 

Corporate Defendants and the Individual Defendants for any business in which the 

Individual Defendants, individually or collectively with any other Defendant, is a 

majority owner or controls directly or indirectly, must maintain the following records: 

A. Personnel records showing, for each person providing services, whether as an 

employee or otherwise, that person's: name, addresses, and telephone numbers; 

job title or position; dates of service; and, if applicable, the reason for termination; 

B. Records of all complaints and refund requests, whether received directly or 

indirectly, such as through a third party, and any response; 

C. All records necessary to demonstrate full compliance with each provision of this 

Order, including all submissions to the FTC; and 

D. A copy of each unique advertisement or other marketing material. 

COMPLIANCE MONITORING 

X. IT IS FURTHER ORDERED that, for the purpose of monitoring the Defendants' 

compliance with this Order, including the financial representations upon which part of 

the judgment was suspended and any failure to transfer any assets as required by this 

Order: 

A. Within 14 days of receipt of a written request from a representative of any 

Plaintiff, each Defendant must: submit additional compliance reports or other 

requested information, which must be sworn under penalty of perjury; appear for 

Page 20 of24 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 21 of 45

Case 1:14-cv-00490-RJA-JJM Document 90 Filed 07/29/15 Page 21of25 

depositions; and produce documents, for inspection and copying. Plaintiffs are 

also authorized to obtain discovery, without further leave of Court, using any of 

the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including 

telephonic depositions), 31, 33, 34, 36, 45, and 69. 

B. For matters concerning this Order, Plaintiffs are authorized to communicate 

directly with each Defendant. The Defendants must permit representatives of any 

Plaintiff to interview any employee or other person affiliated with any Defendant 

who has agreed to such an interview. The person interviewed may have counsel 

present. 

C. Plaintiffs may use all other lawful means, including posing, through their 

representatives, as consumers, suppliers, or other individuals or entities, to the 

Defendants or any individual or entity affiliated with the Defendants, without the 

necessity of identification or prior notice. Nothing in this Order limits the FTC' s 

lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 

15 u.s.c. §§ 49, 57b-1. 

EFFECT ON ASSURANCE OF DISCONTINUANCE 

XI. IT IS FURTHER ORDERED that this Order supersedes the Assurance of 

Discontinuance that was entered into on October 30, 2013 by the New York Office of the 

Attorney General and Defendants Joseph C. Bella III, Check Systems, LLC, Interchex 

Systems, LLC, Goldberg Maxwell, LLC, Mullins & Kane, LLC, Morgan Jackson, LLC, 

and National Check Registry, LLC, attached hereto as Attachment A. 

Page 21 of24 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 22 of 45

Case 1:14-cv-00490-RJA-JJM Document 90 Filed 07/29/15 Page 22 of 25 

ENTRY OF JUDGMENT 

XII. IT IS FURTHER ORDERED that there is no just reason for delay of entry of this 

judgment, and that, pursuant to Federal Rule of Civil Procedure 54(b), the Clerk 

immediately shall enter this Order as a final judgment as to Defendants National Check 

Registry, LLC, Check Systems, LLC, Interchex Systems, LLC, American Mutual 

Holdings, Inc., Goldberg Maxwell, LLC, Morgan Jackson, LLC, Mullins & Kane, LLC, 

Buffalo Staffing, Inc., eCapital Services, LLC, Joseph C. Bella, III, Diane L. Bella, and 

Luis A. Shaw. 

RETENTION OF JURISDICTION 

XIII. IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for 

purposes of construction, modification, and enforcement of this Order. 

IT IS SO ORDERED, this /. L day of 0 cl..., ,2015. 

~;~~A~ 

Page 22 of24 

United States District Judge 

United States District Court 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 23 of 45

Case 1:14-cv-00490-RJA-JJM Document 90 Filed 07/29/15 Page 23 of 25 

SO STIPULATED AND AGREED. 

/' .· ,~;? /,/ //; ~:, :r·.L---·- , N' £--.. ~~''.r ~:-=--

CtiLJN HECTOR 

THOMAS WIDOR 

NIKHIL SINGHVJ 

rcderal Trade Commission 

600 Pennsylvania Ave., N W. 

Washington, DC 20580 

Telephone: 202-326-3376 (Hector) 

Email: chector@ftc_gov 

tv.idor@ftc.gov 

nsingh v1@ftc.gov 

Attonwysfor Plaintiff 

7L·'l'RAD~ CO 

--- ) C1t';.'1fV/ $i · 

JAMES MORRISSEY 

Assistant Attorney General 

350 Main Street, Suite 300A 

Buffalo, NY 14202 

'.:'elephone: (716) 853-8471 

Artorncy for Plaintiff State of New York 

.~ 

ONll CHECK REGISTRY, LLC 

; Joseph C. Bella, Ill 

Seu/mg Corporate Defendant 

-~~ I. /// ,...., 

A c... TM-~ ~IA 

C K STEMS, LLC 

Bf Joseph C. Bella, III 

Settling Corporate Defendant 

f 

HEX SYSTEMS, LLC 

y: Joseph C. Bella, Ill 

Settling Corporate Defendant 

A~ MUTUAL HOLDINGS, INC. 

By: Joseph C. Bella, Ill · 

Settling Corporate Defendant 

oQi!>BE GMAJfWELL,LLC 

By: Joseph C. Bella, III 

Settling Corporate Defendant 

J _ -,.111.._ c . !J~?fL' ~JACKSON, LLC 

By: Joseph C. Bella, III 

Settling Corporate Defendant 

iVj'U'J...l.'1.l"s & KANE, LLC 

y: Joseph C. Bella, III 

Settling Corporate Defendant 

~f~c.- By: Joseph C. Bella, ID 

Settling Corporate Defendant 

e I ALSERVICES, lLC 

y: Joseph C. Bella, IIl 

Settling Corporate Defendant 

Page 23 of24 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 24 of 45

LOO/LOO" d 

Case 1:14-cv-00490-RJA:-JJM Document 90 Filed 07/29/15 Page 24 of 25 

. /JdauL~ DIANE L. BELLA 

Attorneys for Defendants Joseph C Bella 

III, Diane L. Bella, and Corporate 

Defendants 

LUISA. SHAW 

Settling Individual Defendant 

VINCENTE. DOYLE llI 

Connors & Vilardo LLP 

1000 Liberty Building 

424 Main S1reet 

Buffalo, NY 14202 

Telephone: (716) 852-5533 

Email: ved@oonnors-vilardo.com 

Attorney for Defendant Luis A. Shaw 

Page24 of24 

9ZLZ GtiZ ELB(XV:J) 

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Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 25 of 45

Case 1:14-cv-00490-RJA-JJM Document 90 Filed 07/29/15 Page 25 of _25 

DIANE L. BELLA 

Settling Individual Defendant 

DENNIS V ACCO 

CHRISTIAN LOVELACE 

ERIC SOEHNLEIN 

Lippes Mathias Wexler Friedman LLP 

665 Main Street, Suite 300 

Buffalo, NY 14203 

Telephone: (716) 853-5100 

Email: dvacco@lippes.com; 

clovelace@lippes.com; 

esoehnlein@lippes.com 

Attorneys for Defendants Joseph C. Bella 

Ill, Diane L. Bella, and Corporate 

Defendants 

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; LUIS A. SHA ; ""== J S~!tling Indivi ual/bejenda~ 

•, / /" ~ I _/ ~b \ 

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VINCENTE. DOYLEIII 

Connors & Vilardo LLP 

1000 Liberty Building 

424 Main Street 

Buffalo, NY 14202 

Telephone: (716) 852-5533 

Email: ved@connors-vilardo.com 

Attorney for Defendant Luis A. Shaw 

Page 24 of24 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 26 of 45

Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 1 of 20 

Attachment A 
Case 1:14-cv-00490-RJA-JJM Document 91 Filed 10/16/15 Page 27 of 45

Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 2 of 20 

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK 

BUFFALO REGIONAL OFFICE 

In the Matter of the Investigation by Eric T. Schneiderman, 

Attorney General of the State of New York of Joseph Bella, 

individually and as owner of Check Systems, LLC, 

lnterchex Systems, LLC, Goldberg Maxwell, LLC, 

Mullins & Kane, LLC, Morgan Jackson, LLC, and National 

Check Registry, LLC 

ASSURANCE OF DISCONTINUANCE 

PURSUANT TO EXECUTIVE LAW 

SECTION 63(15) 

AOD #13-458 

Pursuant to the provisions of Executive Law§ 63(12) and General Business Law ("GBL") 

Article 22-A, Eric T. Schneiderman, Attorney General of the State of New York ("OAGj, caused 

an inquiry to be made into the debt collection practices of Joseph Bella ("Bella"),Check Systems, 

LLC, lnterchex Systems, LLC, Goldberg Maxwell, LLC, Mullins & Kane, LLC, Morgan Jackson, 

LLC, and National Check Registry, LLC, all companies operated by Bella. Specifically, the OAG 

investigated whether Bella and his companies had repeatedly violated, inter a/ia, General 

Business Law ("GBL"), Article 22-A and the Fair Debt Collection Practices Act, 15 U.S.C.A. §§ 

1692-1692(0) ("FDCPA"). As part of the OAG's investigation, on December 6, 2012, Bella, 

pursuant to a subpoena, appeared for a deposition without counsel. References herein to Bella's 

statements are derived from that deposition. Based upon that inquiry the OAG makes following 

findings: 

BELLA'S VARIOUS DEBT COLLECTION COMPANIES 

1. Bella is a resident of Erie County and has operated the following debt collection 

companies: Check Systems, LLC, lnterchex Systems, LLC, Goldberg Maxwell, LLC, Mullins & 

Kane, LLC, Morgan Jackson, LLC and National Check Registry, LLC (referred to collectively as 

"the Bella Debt Collection Companies"). Bella has in the past, operated several of these 

companies on a one-at-a-time basis for a very short period, usually for less than six months, when 

he would shut the company down and simply began operations under a new name. 

1 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 3 of 20 

Check Systems, LLC 

2. In or around July 24, 2009, Bella formed Check Systems, LLC ("Check Systems") 

located at 268 Main Street, Buffalo, New York 14202. Check Systems was in the business of 

collecting consumer debt and, according to Bella, it ceased operating in or around December 

2010 after it received a "cease and desist" letter from a business called "Chex Systems." Bella 

was not able to produce a copy of the letter. Notwithstanding the prior suspension of business 

through Check Systems, Check Systems d/b/a Lighthouse Recovery is presently operating in the 

business of collecting consumer debt. 

3. Bella described himself as the sole owner of Check Systems, but was unable to 

name the officers of the company because he owns twelve different companies. Bella operated 

Check Systems on a day-to-day basis and, among other things, monitored its collectors for 

compliance with the FDCPA. Check Systems had approximately 25 collectors. At any given time, 

Check Systems debt collectors, and the debt collectors for all of the Bella debt collection 

companies, worked on about 100 accounts. Currently Check Systems has no actual employees; 

all collectors are placed and paid for by Buffalo Staffing, Inc. (the "Staffing Company"). 

4. According to Bella, Check Systems had a legal department that was staffed by 

legal assistants and an attorney named M. Robert Madia ("Madia"). According to Bella, 'When I 

went to St. Joes [Madia] went to Nichols. He's a man I played with. Is now licensed and [admitted] 

in the State of New York who I often times hired to sue debtors who were welching on their debt." 

According to Bella, Madia was an employee of Check Systems and Check Systems sent letters to 

consumers under Madia's signature, for example, whenever a consumer asked for a letter with 

respect to the debt owed. According to Bella, Madia did not have a fixed schedule or a fixed 

payment structure. 

5. Although Bella described Madia as an employee of Check Systems, Check 

Systems never issued a Form W-2 or Form 1099 to Madia. 

2 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 4 of 20 

lnterchex Systems, LLC 

6. In or around June 22, 2010, Bella formed lnterchex Systems, LLC ("lnterchex'') a 

business that like Check Systems, collected on consumer debt. lnterchex was located at the 

same street address as Check Systems and at least some of the debt collectors that worked for 

Check Systems also worked for lnterchex. lnterchex also had a business location at 2005 

Niagara Falls Boulevard, Amherst, New York 14228. lnterchex employed about 40 debt 

collectors. Bella operated lnterchex on a day-to-day basis. 

7. Bella stated that he operated lnterchex for six months to a year and then ceased 

operating it because, according to Bella, he thought the name was bad and it sounded too much 

like a technology company. Bella could not state the approximate date that it ceased operations. 

According to Bella, lnterchex had a legal department staffed by Madia. 

8. Although Bella stated that Madia staffed the lnterchex legal department, in 2011, 

lnterchex paid Madia a total of only $350. 

Mullins & Kane, LLC, Goldberg Maxwell, LLC and Morgan Jackson, LLC 

9. In or around May 3, 2011, Bella formed, and was the sole owner of, Mullins & 

Kane, LLC ("Mullins & Kane"), Goldberg Maxwell, LLC ("Goldberg Maxwell") and Morgan 

Jackson, LLC ("Morgan Jackson, LLC), all of which were in the business of collecting consumer 

debt. According to Bella, he created the three companies so that he could shift consumer account 

from one company to the other and make repeated collection attempts using the names of the 

three companies. 

Morgan Jackson 

10. Morgan Jackson was located at 268 Main Street, Buffalo, New York, the same 

street address as Check Systems and lnterchex and was operated by Bella. According to Bella, 

there was no one associated with the company named Morgan or Jackson; he simply made the 

names up. 

11. According to Bella, he began operating Morgan Jackson in 2011 but operated it 

only for a few months (six months or less), and it is no longer operating. Bella was unable to state 

3 
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the approximate dates when he began operating and then ceased operating Morgan Jackson but 

it began and ceased operations in 2011. According to Bella, he closed Morgan Jackson because 

it was not profrtable and he wanted to switch from collecting on delinquent payday loans to 

collecting on delinquent credit card debt. 

12. According to Bella, Morgan Jackson had a legal department that was staffed by 

Madia. 

13. Neither Morgan Jackson or the Staffing Company, however, issued Form W-2 of 

form 1099 to Madia in 2011. 

14. Morgan Jackson had no actual employees; all collectors were placed and paid for 

by the Staffing Company. 

Mullins & Kane 

15. Mullins & Kane was located at 1673 Hertel Avenue, Buffalo, New York 14216 and 

was operated by Bella after he ceased operating Morgan Jackson. According to Bella, there was 

no one associated with the company named Mullins or Kane; he simply made the name up. 

According to Bella, he began operating Mullins & Kane sometime in 2011 but the company is no 

longer operating. Bella was unable to state the date that he began or ceased operating the 

company which, he stated, he shut down because it was not profitable. According to Bella, the 

Staffing Company placed about 30-45 debt collectors at Mullins & Kane and he operated the 

company on a day-to-day basis. 

16. Mullins & Kane has no actual employees; all collectors were placed and paid for by 

the Staffing Company. 

17. According to Bella, Mullins & Kane had a legal department that was staffed by 

Madia. Bella described Madia as "[o]ne of our lawyers, he was our house lawyer_" 

18. According to Bella, Madia was paid "a certain amount per week or month" but he 

did not indicate the amount. 

19. Neither Mullins & Kane or the Staffing Company, however, issued Form W-2 of 

form 1099 to Madia in 2011. 

4 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 6 of 20 

Goldberg Maxwell 

20. Goldberg Maxwell was located at 1673 Hertel Avenue, Buffalo, New York 14216, 

the same address as Mullins and Kane and was operated by Bella but is no longer operating. 

According to Bella, there was no one associated with the company named Goldberg or Maxwell; 

he simply made the name up. Bella was unable to state when Goldberg Maxwell began or ceased 

operations. According to Bella, Goldberg Maxwell ceased operations because "bigger, better 

business ventures awaited." Goldberg Maxwell had no actual employees; all collectors were 

placed and paid for by the Staffing Company. 

21. Bella stated that Goldberg Maxwell had a legal department and it was staffed by 

Madia. 

22. Neither Goldberg Maxwell or the Staffing Company, however, issued Form W-2 of 

form 1099 to Madia in 2011. 

National Check Registry, LLC 

23. On or around June 15, 2012, Bella formed National Check Registry, LLC ("National 

Check Registry") and it began operations shortly thereafter. National Check Registry no longer 

operates. 

24. National Check Registry is located at 268 Main Street, Buffalo New York 14202 

(the former offices of Check Systems, lnterchex Systems, and Morgan Jackson) and 1673 Hertel 

Avenue, Buffalo, New York 14216 (the former offices of Mullins & Kane and Goldberg Maxwell). 

25. National Check Registry has no actual employees and the Staffing Company has 

placed about 55 collectors with the company. 

26. National Check Registry had a legal department staffed by Madia until Bella 

terminated him. 

27. According to Bella, prior to his termination, Madia bought several actions against 

debtors on behalf of National Check Registry. Bella stated: "we would sue a few debtors a month 

is our template." In fact National Check Registry just sued I think debtors in New York State. 

5 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 7 of 20 

We're getting to we would enforce, if there was a potential of a kinetic possibility of us suing a 

debtor that that possibility would be real, it wouldn't be a virtual myth." 

28. Again, according to Bella, "[Madia] may have done a few [lawsuits] by mail 

because I know I've seen a few letters come back in the mail which were for lawsuits. Typically 

when a debtor has a large amount that they owe we call them to get them to pay their bill then 

they give us the wrong answer, you know the equivalent to giving us, to flipping us the bird over 

the phone we'll say, that would be someone I would like to sue please." 

29. In fact National Check Registry has never sued a debtor. 

30. Despite the fact that Bella terminated Madia in November 2012, as late as 

February 22, 2013, National Check Registry continued to send letter to consumers from Faith 

Galloway, Legal Assistant, that, according to the letters, were copied to Madia. 

ALLEGED VIOLATIONS OF LAW 

Failure to Validate Debts After The Initial Communication With A Consumer 

31. 15 U.S.C. § 1692g(a) requires that within five days after the debt collector initially 

contacts a consumer, it must send the consumer a written notice that, among other things, 

contains (i) the amount of the debt, (ii) the name of the creditor to whom it is owed, (iii) the right of 

the consumer to dispute the validity of the debt and require that the debt collector obtain 

verification it, and (iv) the right of the consumer to obtain the name and address of the original 

creditor if different from the current creditor (referred to herein as ''the Verification Rights Notice'). 

32. The Verification Rights Notice is a significant feature of the FDCPA, see S. Rep. 

No. 382, 95th Cong., 1st Sess, 4 at 4, and is intended to minimize the chance that the debt 

collector is pursuing the wrong consumer or has misstated the amount of the debt. According to 

the Senate Report, ''This provision will eliminate the recurring problem of collectors dunning the 

wrong person or attempting to collect debts which the consumer paid." Id; see also Jacobson v. 

Healthcare Fin. Ser., Inc., 516 F.3d 85, 89 (2d Cir. 2008). 

33. This is especially the case where collectors collect on older portfolios like these 

have been frequently sold back-and-forth by debt collectors and been collected on many times 

6 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 8 of 20 

before. Recently, the Federal Trade Commission concluded that "debt collectors often have 

inadequate information when they contact consumers, thereby increasing the likelihood that they 

will reach the wrong consumer, try to collect the wrong amount, or both." Fed. Trade Comm'n, 

Collecting Consumer Debt: Challenges of Change 21 (2009). Indeed, in 2010 alone, the FTC 

received 33, 122 complaints alleging that debt collectors attempted to collect a debt that the 

consumer did not owe, or was larger than what the consumer actually owed, the precise errors 

that 15 U.S.C. § 1692g(a) is meant to address. 

34. Thus, the significance of the Verification Rights Notice could hardly be overestimated. 

35. The OAG subpoenaed from the Bella Debt Collection Companies documentary 

proof that they were in compliance with 15 U.S.C. § 1692g(a). The Bella companies produced no 

documents. 

36. The Bella Debt Collection Companies did not provide the Verification Rights Notice 

to consumers. 

Use Of Verification Of Employment Forms 

37. The Bella Debt Collection Companies routinely sent Verification of Employment 

("VOE") forms to the employers of consumers. The VOE form illegally sought, among other 

things, the consumer's Social Security Number, hourly wage, date of hire, and information on 

whether the consumer's wages are being garnished. 

38. The FDCPA puts very strict limitations on when a debt collector may contact the 

employer of a consumer; indeed, the strict limitations put on third party contacts are among the 

most important of the FDCPA protections. According to the FDCPA Senate Report: 

[T]his legislation adopts an extremely important protection . . . [l]t 

prohibits disclosing the consumer's personal affairs to third persons. 

Other than to obtain location information, a debt collector may not contact 

third persons such as a consumer's friends, neighbors, relative or 

employer. Such contacts are not legitimate collection practices and 

result in serious invasions of privacy, as well as loss of jobs. 

S. Rep. No. 382, 95th Cong., 1st Sess. 4 at 4. (emphasis added) 

7 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 9 of 20 

39. Section 1692c(b) provides that a debt collector like respondents may not 

communicate with the employer of a consumer except to acquire location information. Section 

1692a{7) defines "location information" as a "consumer's place of abode and his telephone 

number at such place, or his place of employment." Further, Section 1692b(1) requires that any 

debt collector contacting an employer to acquire location information about a consumer must 

"identify himself, state that he is confirming or correcting location information concerning the 

consumer, and, if expressly requested, identify his employer." 

40. The Bella Debt Collection Companies VOE form, on its face, violates Sections 

1692a(7) and 1692b(1) in two fundamental ways. First, the VOE form does not state that the 

Bella debt collection companies are confirming or correcting location information of the consumer. 

Second, the VOE form illegally seeks much more than "location information" about the consumer, 

including the consumer's Social Security Number, hourly wage, date of hire, and information on 

whether the consumer's wages are being garnished. 

41. The Bella Debt Collection Companies VOE form violates Sections 1692e(4) 

(prohibiting debt collectors from "represent[ing) or impl[ying] that nonpayment of any debt will result 

in ... the seizure, garnishment, attachment, or sale of any property or wages of any person unless 

such action is lawful and the debt collector or creditor intends to take such action") and 1692e(10) 

because it seeks information about garnished wages and it instructs the employer to show the 

form to the consumer for a signature. As a result, the "least sophisticated consumer" may think his 

wages are at risk of garnishment. See Cabron v. Medical Data Systems, Inc., 379 B.R. 371 

(Bkrtcy. M.D. Ala. 2007). The Bella Debt Collection Companies, however, have never obtained a 

judgment against a consumer and thus, had no intention of garnishing, or right to garnish, wages. 

42. Quite apart from the fact that the VOE form facially violates the Section 1692c(b), 

Bella admitted admits that he used the VOE form for purposes not permitted by the FDCPA. Bella 

stated: 'When we talk to an associate in our company that would not be able to get money from a 

debtor or find out if they were making money or a debtor would make an arrangement to pay, we 

8 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 10 of 20 

would make sure they actually work here. Let's verify they actually have this job, they're not going 

to stiff on this debt a third or fourth time." 

43. Although Bella stated that after he ceased using the VOE forms after he received a 

communication from the OAG in March 2012 stating that the forms were not permissible, in fact, 

as late as August 2012, his companies continued to send them out even after that communication. 

Sending Letters That Used Attorney M. Robert Madia's Name 

44. The FDCPA has strict limits on the use of an attorney's name and/or stationary in 

the collection of consumer debt. 

45. The Bella Debt Collection Companies routinely sent letters to consumers under the 

name of Attorney M. Robert Madia. Madia, however, did not have any direct personal involvement 

in the sending of the letters. Madia had not reviewed the consumers' files prior to the letters being 

sent, did not determine that the letters should be sent, and did not know the identity of the 

consumers to whom the letter had been sent. 

46. Despite the fact that Bella terminated Madia in November 2012, as late as 

February 22, 2013, National Check Registry continued to send letters to consumers from Faith 

Galloway, Legal Assistant, that, according to the letters, were copied to Madia. 

Collection On Payday Loans From New York Residents 

47. Payday loans are a type of short-term borrowing where an individual borrows a 

small amount at a very high rate of interest, often 450% or more. The borrower typically writes a 

post-dated personal check in the amountthey wish to borrow plus a fee in exchange for cash. The 

lender holds onto the check and cashes it on the agreed upon date, usually the borrower's next 

payday. These loans are also called cash advance loans or check advance loans. 

48. Payday loans are illegal in New York State because they are usurious. 

49. The Bella Debt Collection Companies have collected on, or have attempted to 

collect on, payday loans from New York State residents. 

50. By reason of the foregoing, the OAG finds that Bella and the Bella Debt Collection 

Companies (i) has engaged in repeated deceptive and fraudulent practices in violation of GBL § 

9 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 11of20 

349 and Executive Law, § 63(12), and (ii) has engaged in repeated illegality in violation of 

Executive Law,§ 63(12). 

IT NOW APPEARING that Bella and the Bella Debt Collection Companies desire 

to settle and resolve the investigation without admitting or denying the OAG's findings, the OAG 

and Bella and the Bella Debt Collection Companies hereby enter into this Assurance of 

Discontinuance. 

AGREEMENT 

51. IT IS HEREBY AGREED that Bella and the Bella Debt Collection Companies, and 

their agents, trustees, servants, employees, successors, heirs and assigns, or any other person 

under direction and control, whether acting individually or in concert with others, or through any 

corporate or other entity or device through which they may now or hereafter act or conduct 

business, operating or doing business in New York State, including businesses in which they have 

any legal or beneficial interest, are bound by the terms of this Assurance of Discontinuance. 

Hereinafter, Bella and the Bella Debt Collection Companies are referred to collectively as "Bella." 

52. IT IS FURTHER AGREED AND UNDERSTOOD that Bella hereby acknowledges 

and agrees that he will abide by all applicable federal and state laws, including but not limited to 

the FDCPA. Specifically, Bella will not: 

a. communicate with alleged debtors at their places of employment when the debt 

collectors know, or have reason to know, that the employers do not permit such 

communications; 

b. discuss alleged debtors' debts with third parties without the consent of the alleged 

debtor or his/her attorney or unless otherwise permitted by law; 

c. communicate with third parties for any purpose other than acquiring location 

information without the consent of the alleged debtor or his/her attorney or unless 

otherwise permitted by law; 

d. communicate with third parties more than once, except as permitted by the FDCPA 

or other applicable law; 

e. represent or imply that the collector is acting on behalf of an attorney when that is 

untrue: 

10 
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f. represent or imply that the collector is affiliated with a law enforcement agency, a 

court or state or local agency; 

g. represent or imply that they or a creditor has commenced, or is about to 

commence, legal action against a consumer when that is untrue; 

h. threaten to revoke a consumer's driver's license; 

i. represent or imply that the consumer has committed a crime or is subject to arrest; 

or 

j. threaten to seize a co_nsumer's assets or garnish a consumer's wages. 

53. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will, within five (5) days 

of the initial contact with consumers, provide the verification rights notice required by 15 U.S.C. § 

1692g. 

54. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will create and maintain 

a file for each consumer complaint he receives, which will include the consumer complaint, any 

response thereto, including all related written and oral communications and the disposition and 

the name of the collector associated with the complaint. 

55. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will maintain a 

personnel file for each employee or contractor (including supervisors) that must include the 

disciplinary history of the employee or contractor with respect to each complaint in which the 

employee is named or involved, including a record of all disciplinary actions taken against any 

employee or contractor in connection with any such complaint. For a period of three (3) years 

following the date of execution of this Assurance, Bella will, upon written request from the OAG, 

make available to the OAG any and all information and documents described in this paragraph. 

56. IT IS FURTHER AGREED AND UNDERSTOOD that, within fifteen (15) days of the 

execution of this Assurance, Bella will identify to the OAG an employee responsible for directing 

compliance with the terms of this Assurance ("Compliance Manager"). Within ninety (90) days 

thereafter, the Compliance Manager(s) shall submit to the OAG a sworn, written statement 

describing in detail the practices and procedures that Bella has put in place to ensure compliance 

with the term of this Assurance. 

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57. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will maintain a system 

that will permit the Compliance Manager to monitor electronically any employees' or contractors' 

telephone calls with debtors, without the employees' or contractors' knowledge, and will maintain 

a daily log of which employees were monitored, during what period and by whom. 

58. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will ensure that the 

Compliance Manager monitors each employee or subcontractor at least once per week for thirty 

minutes and maintains a daily log of which employees or contractors were monitored, during what 

period and by whom and will make such log available to the OAG. Each daily log will be 

maintained by Bella for a period of three (3) years. 

59. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will not send letters to 

consumers that are from legal assistants, paralegals or any other job title that implies legal 

training or make reference to a legal department or legal department of administration. 

60. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will not send letters 

signed by, or copied to an attorney unless the attorney has direct personal involvement in the 

sending of the letters, has reviewed the consumers' files prior to the letters being sent and 

determined that the letters should be sent. 

61. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will not send verification 

of employment forms to the employers of consumers, or contact third parties generally except to 

confirm or correct the address of a consumer which third party may be contacted only once. 

62. IT IS FURTHER AGREED AND UNDERSTOOD that Bella, for a period of three (3) 

years, shall maintain a file with a physical or electronic copy of all letters and emails sent to 

consumers arranged in chronological order. 

63. IT IS FURTHER AGREED AND UNDERSTOOD that, for a period three (3) years 

following the date of execution of this Assurance, in the event that Bella changes a principal place 

of business of any of the Bella Debt Collection Companies, incorporates a new corporation or 

business entity involved in the business of debt collection, or any of the Bella Debt Collection 

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Companies does business under a new name, (collectively, "Change in Business"), Bella shall 

inform the OAG in writing within thirty (30) days after any such Change in Business. 

64. IT IS FURTHER AGREED AND UNDERSTOOD that, for a period of three (3) 

years following the date of execution of this Assurance, no debt collection company in which Bella 

has a legal or beneficial interest may collect on a debt that any of the Bella Debt Collection 

Companies has previously owned. 

65. IT IS FURTHER AGREED AND UNDERSTOOD that, within 90 days of execution 

of this Assurance, Bella will cease doing business, of any nature, through the following 

companies: lnterchex Systems, LLC, Goldberg Maxwell, LLC, Mullins & Kane, LLC, Morgan 

Jackson, LLC, and National Check Registry, LLC. 

66. IT IS FURTHER AGREED AND UNDERSTOOD that Bella will not knowingly 

engage in any debt collection activities with respect to payday loans involving New York State 

residents and will, upon the execution of this Assurance, provide full restitution in the total amount 

of $2,261.36, per the schedule attached hereto as Exhibit A, to the OAG for the benefit of each 

New York State resident from whom any Bella Debt Collection Company collected any amounts 

on a payday loan from January 1, 2012 to date. 

67. IT IS FURTHER AGREED AND UNDERSTOOD that Bella shall pay, as costs and 

penalties to the Attorney General's Office, the total sum of $162,738.64 made payable to the State 

of New York, delivered to Eric T. Schneiderman, Attorney General of the State of New York, 350 

Main Street, Suite 300A, Buffalo, NY, 14202 Attention: James M. Morrissey, Assistant Attorney 

General pursuant to the following terms: (a) Bella shall make an initial payment of $52,738.64, upon 

the execution of this Assurance; and (b) Bella shall thereafter make monthly payments in the 

amount of $9, 166.67 on the first business day of each month, for the eleven (11) months following 

the month in which this Assurance is executed; (c) Bella shall make a final payment in the amount 

of $9, 166.63 on the first business day of the twelfth (12th) month following the month in which this 

Assurance is executed. 

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68. IT IS FURTHER AGREED AND UNDERSTOOD that the OAG has agreed to the 

terms of this Assurance based on, among other things, the representations made to the OAG by 

Bella, and the OAG's own factual investigation as set forth in Findings (1) - (50) above. To the 

extent that any material representations are later found to be inaccurate by a court of competent 

jurisdiction, this Assurance is voidable by the OAG in its sole discretion. 

69. IT IS FURTHER AGREED AND UNDERSTOOD that no representation, 

inducement, promise, understanding, condition, or warranty not set forth in this Assurance has 

been made to or relied upon by Bella in agreeing to this Assurance. 

70. IT IS FURTHER AGREED AND UNDERSTOOD that Bella represents and 

warrants, through the signature below, that the terms and conditions of this Assurance are duly 

approved, and execution of this Assurance is duly authorized. 

71. IT IS FURTHER AGREED AND UNDERSTOOD that Bella shall not take any 

action or make any statement denying, directly or indirectly, the propriety of this Assurance or 

expressing the view that this Assurance is without factual basis. Nothing in this paragraph affects 

his (i) testimonial obligations, or (ii) right to take legal or factual positions in defense of litigation or 

other legal proceedings to which OAG is not a party. 

72. IT IS FURTHER AGREED AND UNDERSTOOD that this Assurance is not an 

admission which can be used as evidence against Bella and/or the Bella Debt Collection 

Companies, in any judicial or administrative hearing, proceeding or action except for a proceeding 

by the OAG to enforce its terms. 

73. IT IS FURTHER AGREED AND UNDERSTOOD that this Assurance may not be 

amended except by an instrument in writing signed on behalf of all the parties to this Assurance. 

74. IT IS FURTHER AGREED AND UNDERSTOOD that this Assurance shall be 

binding on and inure to the benefit of the parties to this Assurance and their respective successors 

and assigns, provided that no party, other than OAG, may assign, delegate, or otherwise transfer 

any of its rights or obligations under this Assurance without the prior written consent of OAG. 

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75. IT IS FURTHER AGREED AND UNDERSTOOD that, in the event that any one or 

more of the provisions contained in this Assurance shall, for any reason, be held to be invalid, 

illegal, or unenforceable in any respect, in the sole discretion of the OAG such invalidity, illegality, 

or unenforceability shall not affect any other provision of this Assurance. 

76. IT IS FURTHER AGREED AND UNDERSTOOD that, to the extent not already 

provided under this Assurance, Bella shall, upon request by OAG, provide all documentation and 

information necessary for OAG to verify compliance with this Assurance. 

77. IT IS FURTHER AGREED AND UNDERSTOOD that acceptance of this Assurance 

by OAG shall not be deemed approval by OAG of any of the practices or procedures referenced 

herein, and Bella shall make no representation to the contrary. 

78. IT IS FURTHER AGREED AND UNDERSTOOD that all correspondence to the 

Attorney General shall be delivered or mailed to the following address: 

Office of the Attorney General of the State of New York 

Attn: James M. Morrissey, Assistant Attorney General 

350 Main Street, Suite 300A Buffalo, New York 14202 

79. IT IS FURTHER AGREED AND UNDERSTOOD that nothing contained in this 

Assurance shall be construed to limit the rights of a person or an entity who is not a party to this 

Assurance with respect to any of the matters contained herein. Notwithstanding the foregoing, in 

no event shall this Assurance be construed to limit the rights of Bella in connection with any action 

commenced by any party other than the Attorney General. 

80. IT IS FURTHER AGREED AND UNDERSTOOD by Bella pursuant to Executive 

Law § 63(15), in the event of any violation of this Assurance, the Attorney General may 

commence an action or proceeding, under General Business Law Article 22-A and Executive Law 

'63(12), and that evidence of a violation of the Assurance shall constitute prima tacie proof of 

violation of the applicable laws in any civil action or proceeding thereafter commenced by the 

Attorney General. 

81. IT IS FURTHER AGREED AND UNDERSTOOD by Bella that, should the OAG 

prove in a court of competent jurisdiction that a breach of this Assurance by the Company has 

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occurred, they shall pay to OAG the cost, if any, of such determination and of enforcing this 

Assurance, including without limitation legal fees, expenses, and court costs. 

82. IT IS FURTHER AGREED AND UNDERSTOOD that the OAG finds the relief and 

agreements contained in this Assurance appropriate and in the public interest. The OAG is willing 

to accept this Assurance pursuant to New York Executive Law Section 63(15), in lieu of 

commencing a statutory proceeding. This Assurance shall be governed by the laws of the State of 

New York without regard to any conflict of laws principles. 

IN WITNESS WHEREOF, the undersigned subscribe their names. 

Dated: Buffalo, New York 

October 3Q_, 2013 

By: 

JO PH BELLA, individually and on behalf of Check 

stems, LLC, lnterchex Systems, LLC, Goldberg Maxwell, 

, LC, Mullins & Kane, LLC, Morgan Jackson, LLC, and 

National istry, LLC 

ACCO, Attorney for Bella and the Bella 

companies 

Consented to: 

ERIC T. SCHNEIDERMAN 

Attorney General of the State of New York 

JAMES M. MORRISSEY, Assistant Attorney Ge eral 

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CORPORATE ACKNOWLEDGMENT 

STATE OF NEW YORK ) 

:ss 

COUNTY OF ERIE 

Joseph Bella, being duly sworn, depose and say: 

I am the owner and managing member and/or president of Check Systems, LLC, lnterchex 

Systems, LLC, Goldberg Maxwell, LLC, Mullins & Kane, LLC, Morgan Jackson, LLC, and National 

Check Registry, LLC, and have authority to execute the foregoing Assurance of Discontinuance, 

and have authority to bind the above-referenced companies to this Assurance. I have executed 

the aforesaid instrument with the consent and authority of the above-referenced companies and 

those responsible for the acts of said entity and duly acknowledge the same. I subscribed my 

name understanding the provisions thereof 

and entered into it knowingly and willingly. 

Sworn to before me this 

so~ day of October, 2013 

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Exhibit A 
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Case 1:14-cv-00490-RJA-JJM Document 90-1 Filed 07/29/15 Page 20 of 20 

EXHIBIT A 

(New York Pay Day Loans) 

Paid State Zip 

$762.25 NY 13142 

$436.00 NY 10705 

$365.50 NY 11518 

$322.66 NY 11213 

$199.00 NY 14456 

$155.95 NY 11236 

$20.00 NY 13212 

18