FILED 

CHARLOTTE.NC 

UNITED STATES DISTRICT COURT FEB - 't 2019 FOR THE WESTERN DISTRICT OF NORTH CAROLINA 

CHARLOTTE DIVISION "" US DISTRICT COURT 

WESTERN DISTRICT OF NC 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

V. 

GLOBAL ASSET FINANCIAL SERVICES 

GROUP, LLC, a limited liability company, 

REGIONAL ASSET MAINTENANCE, 

LLC, a limited liability company, also doing 

business as RAM LLC, 

MIDWESTERN ALLIANCE, LLC, a limited 

liability company, 

lOD HOLDINGS, INC., a corporation, 

TRANS AMERICA CONSUMER 

SOLUTIONS, LLC, a limited liability 

company, 

LLI BUSINESS INNOVATIONS, LLC, a 

limited liability company, 

T ACS I, LLC, a limited liability company, 

formerly known as UPG, LLC, 

T ACS II, LLC, a limited liability company, 

formerly known as BOC Processing, LLC, 

formerly known as BOC, LLC, 

T ACS III, LLC, a limited liability company, 

formerly known as NRA, LLC, 

CEDAR ROSE HOLDINGS & 

DEVELOPMENT, INC., a corporation, 

Case o. 3 .' /CJ Cv 5~-afY\ 

COMPLAINT FOR PERMANENT 

INJUNCTION AND OTHER 

EQUITABLE RELIEF 
ANKH ALI, in his individual and corporate 

capacity, 

AZIZA ALI, in her individual and corporate 

capacity, 

KENNETH MOODY, in his individual and 

corporate capacity, 

DAVID CARR, in his individual and corporate 

capacity, 

JEREMY SCINT A, in his individual and 

corporate capacity, and 

OMAR HUSSAIN, in his individual and 

corporate capacity, 

Defendants. 

Plaintiff, the Federal Trade Commission ("FTC"), for its Complaint alleges: 

1. The FTC brings this action under Section 13(b) ofthe Federal Trade Commission 

Act ("FTC Act"), 15 U.S.C. § 53(b), and Section 814 ofthe Fair Debt Collection Practices Act 

("FDCPA"), 15 U.S.C. § 1692/, to obtain temporary, preliminary, and permanent injunctive 

relief, rescission or reformation of contracts, restitution, the refund ofmonies paid, disgorgement 

ofill-gotten monies, and other equitable relief for Defendants' acts or practices in violation of 

Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a), and the FDCPA, 15 U.S.C. §§ l 692-l 692p, in 

connection with Defendants' deceptive and abusive debt collection practices, including attempts 

to harass consumers into paying debts that they do not actually owe. 

2 
JURISDICTION AND VENUE 

2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), 

and 1345, and 15 U.S.C. §§ 45(a), 53(b), and 1692/. 

3. Venue is proper in this district under 28 U.S.C. § 139l(b)(2), (c)(l), (c)(3), and 

(d), and 15 U.S.C. § 53(b). 

PLAINTIFF 

4. The FTC is an independent agency of the United States Government created by 

statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) ofthe FTC Act, 15 U.S.C. 

§ 45( a), which prohibits unfair or deceptive acts or practices in or affecting commerce. ·The 

FTC also enforces the FDCPA, 15 U.S.C. §§ 1692-1692p, which prohibits abusive, deceptive, 

and unfair debt collection practices and imposes duties upon debt collectors. 

5. The FTC is authorized to initiate federal district court proceedings, by its own 

attorneys, to enjoin violations ofthe FTC Act and the FDCPA and to secure such equitable relief 

as may be appropriate in each case, including rescission or reformation of contracts, restitution, 

the refund ofmonies paid, and the disgorgement ofill-gotten monies. 15 U.S.C. §§ 53(b), 

56(a)(2)(A), and 1692/(a). 

DEFENDANTS 

6. Defendant Global Asset Financial Services Group, LLC ("GAFS") is a 

Delaware limited liability company with Certificates of Authority to transact business in No11h 

Carolina and South Carolina. Its principal place of business is 5700 Executive Center Drive, 

Suite 102, Charlotte, North Carolina. GAFS has also used mailing addresses of 223 E Main 

3 
Street, Suite 102, Rock Hill, South Carolina and 16192 Coastal Highway, Lewes, Delaware. 

OAFS transacts or has transacted business in this district and throughout the United States. 

7. Defendant Regional Asset Maintenance, LLC ("RAM") is a Delaware limited 

liability company with its principal place of business at 631 Brawley School Road, Suite 300, 

PMB 158, Mooresville, North Carolina. RAM has also used the mailing address of 300 

Delaware Avenue, Suite 210-A, Wilmington, Delaware. RAM transacts or has transacted 

business in this district and throughout the United States. 

8. Defendant 10D Holdings, Inc. ("10D Holdings") is a Florida corporation with its 

registered address and principal place of business at 11380 Prosperity Farms Rd, #221E, Palm 

Beach Gardens, Florida. 1OD Holdings has also used the mailing address of 305 West 

Broadway New York, New York. 1OD Holdings transacts or has transacted business in this 

district and throughout the United States. 

9. Defendant Trans America Consumer Solutions, LLC ("Trans America") is a 

Nevada limited liability company. Its registered address is 11380 Prosperity Farms Rd, #221E, 

Palm Beach Gardens, Florida. The address given for its manager, David Carr, is 305 West 

Broadway, New York, New York. Trans America is 100% owned by lOD Holdings. Trans 

America transacts or has transacted business in this district and throughout the United States. 

10. Defendant Midwestern Alliance, LLC ("Midwestern Alliance") is a Nevada 

limited liability company, formerly a New York limited liability company. The address given 

for its managing member, David Carr, is 3145 Geary Boulevard, San Francisco, California. 

Midwestern Alliance has also used the mailing address of 255 Great Arrow Avenue, Suite 118, 

4 
Buffalo, New York. Midwestern Alliance transacts or has transacted business in this district 

and throughout the United States. 

11. Defendant LLI Business Innovations, LLC ("LLI Business") is a California 

limited liability company with its registered address and principal place of business at 506 South 

Spring Street,#13308, SMB 1087, Los Angeles, California. LLI Business has also used the 

mailing address of 255 Great Arrow Avenue, Suite 118, Buffalo, New York. LLI Business 

transacts or has transacted business in this district and throughout the United States. 

12. Defendant TACS I, LLC, formerly known as UPG, LLC, ("TACS I") is a 

Nevada limited liability company. The address given for its managing member, David Carr, is 

3145 Geary Boulevard, San Francisco, California. TACS I has also used the mailing address of 

255 Great Arrow A venue, Suite 118, Buffalo, New York. T ACS I transacts or has transacted 

business in this district and throughout the United States. 

13. Defendant TACS II, LLC, formerly known as BOC, LLC and BOC Processing, 

LLC, ("TACS II") is a Nevada limited liability company. The address given for its managing 

member, David Carr, is 3145 Geary Boulevard, San Francisco, California. TACS II has also 

used the mailing address of255 Great Arrow Avenue, Suite 118, Buffalo, New York. TACS II 

transacts or has transacted business in this district and throughout the United States. 

14. Defendant TACS III, LLC, formerly known as NRA, LLC, ("T ACS III") is a 

Florida limited liability company with its registered address and principal place of business at 

3145 Geary Boulevard, San Francisco, California. T ACS III has also used mailing addresses of 

11380 Prosperity Farms Rd, #221E, Palrp Beach Gardens, Florida and 305 West Broadway, New 

5 
York, New York. TACS III is 100% owned by Trans America. TACS III transacts or has 

transacted business in this district and throughout the United States. 

15. Defendant Cedar Rose Holdings & Development, Inc. ("Cedar Rose") is a 

Florida corporation with its registered address and principal place of business at 11380 

Prosperity Farms Rd, #221E, Palm Beach Gardens, Florida. Cedar Rose transacts or has 

transacted business in this district and throughout the United States. 

16. Defendant Ankh Ali is the vice-president of GAFS. He is or has been an 

authorized signatory to the bank accounts ofGAFS. He is listed as the registrant for GAFS' 

domain name services and as the owner for GAFS primary bank account. At all times material 

to this Complaint, acting alone or in concert with others, he has formulated, directed, controlled, 

had the authority to control, or participated in the acts and practices of GAFS, including the acts 

and practices set forth in this Complaint. Defendant Ankh Ali resides in this district and, in 

connection with the matters alleged herein, transacts or has transacted business in this district 

and throughout the United States. 

17. Defendant Aziza Ali is a member ofGAFS. She is also listed as the registered 

agent on GAFS' applications for certificates of authority to transact business in North Carolina 

and South Carolina. She is or has been an authorized signatory to the bank accounts of GAFS. 

She signed on behalf of GAFS on its Trans Union subscriber agreement, and listed herself as the 

owner on the same agreement. At all times material to this Complaint, acting alone or in concert 

with others, she has formulated, directed, controlled, had the authority to control, or participated 

in the acts and practices of GAFS, including the acts and practices set forth in this Complaint. 

6 
Defendant Aziza Ali resides in this district and, in connection with the matters alleged herein, 

transacts or has transacted business in this district and throughout the United States. 

18. Defendant Kenneth Moody is a managing member ofOAFS. At all times 

material to this Complaint, acting alone or in concert with others, he has formulated, directed, 

controlled, had the authority to control, or participated in the acts and practices ofOAFS, 

including the acts and practices set forth in this Complaint. Defendant Moody, in connection 

with the matters alleged herein, transacts or has transacted business in this district and 

throughout the United States. 

19. Defendant David Carr is or was a manager, incorporator, director, president, or 

organizer of 1OD Holdings, Trans America, Midwestern Alliance, TACS I, T ACS II, and TACS 

III. He is an authorized signatory on the bank and merchant accounts for many ofthe 

Defendants, and is listed as an authorized user for Defendants' payroll services account. At all 

times material to this complaint, acting alone or in concert with others, he has formulated, 

directed, controlled, had the authority to control, or participated in the acts and practices set forth 

in this Complaint. Defendant Carr, in connection with the matters alleged herein, transacts or 

has transacted business in this District and throughout the United States. 

20. Defendant Jeremy Sein ta is a managing member ofLLI Business and a manager 

ofTrans America. He is listed as the registrant and contact person for the LLI Business' 

Internet websites and telecommunications services. In addition, the telecommunications 

services are paid with his personal credit card. At all times material to this complaint, acting 

alone or in concert with others, he has formulated, directed, controlled, had the authority to 

control, or participated in the acts and practices set forth in this Complaint. Defendant Scinta, in 

7 
connection with the matters alleged herein, transacts or has transacted business in this District 

and throughout the United States. 

21. Defendant Omar Hussain is or was a manager, director, president, or organizer 

ofTrans America, Midwestern Alliance, TACS I, TACS II, TACS III, and Cedar Rose. He is or 

was an authorized signatory on the bank and merchant accounts for many ofthe Defendants. At 

all times material to this complaint, acting alone or in concert with others, he has formulated, 

directed, controlled, had the authority to control, or participated in the acts and practices set forth 

in this Complaint. Defendant Hussain, in connection with the matters alleged herein, transacts 

or has transacted business in this District and throughout the United States. 

Buffalo and Charlotte Collection Defendants Operate as Common Enterprises 

22. Defendants 1 OD Holdings, Trans America, LLI Business, T ACS I, T ACS II, 

TACS III, and Cedar Rose, and their principals, Carr, Scinta, and Hussain ( collectively "Buffalo 

Collection Defendants") have collected on phantom debts, including many obtained from 

Defendant Midwestern Alliance and its principals Defendants Carr and Hussain (collectively, 

"Brokering Defendants"). The principal purpose ofthese businesses has been the collection of 

debts. Buffalo Collection Defendants have also received ample notice that consumers did not 

actually owe them these debts. Buffalo Collection Defendants use a variety of unscrupulous 

tactics to coerce consumers into paying the fake or unauthorized debts, such as placing harassing 

robocalls to consumers, making unlawful threats to harass consumers' friends and family 

members, and failing to provide consumers with statutorily required notices of how to dispute 

the debts. 

8 
23. Buffalo Collection Defendants have operated as a common enterprise while 

engaging in the unlawful acts and practices and other violations of law alleged below. Buffalo 

Collection Defendants have conducted the business practices described below through 

interrelated companies that have common ownership, officers, managers, business functions, 

employees, and office locations, and that have commingled funds. Because these Defendants 

have operated as a common enterprise, each of them is jointly and severally liable for the acts 

and practices alleged below. Defendants Carr, Scinta, and Hussain have formulated, directed, 

controlled, had the authority to control, or participated in the acts and practices of the Corporate 

Buffalo Collection Defendants that constitute the common enterprise. 

24. Defendants GAFS, RAM, and their principals Defendants Ankh Ali, Aziza Ali, 

Moody, Carr, and Scinta (collectively "Charlotte Collection Defendants") have collected on 

phantom debts, including those obtained from Brokering Defendants. The principal purpose of 

GAFS and RAM is the collection of debts. Charlotte Collection Defendants have also received 

ample notice that consumers did not actually owe them these debts. Charlotte Collection 

Defendants use a variety ofunscrupulous tactics- substantially similar to the tactics used by the 

Buffalo Collection Defendants- to coerce consumers into paying the fake or unauthorized debts, 

such as placing harassing robocalls to consumers, making unlawful threats to harass consumers' 

friends and family members, and failing to provide consumers with statutorily required notices of 

how to dispute the debts. 

25. Charlotte Collection Defendants have also operated as a common enterprise while 

engaging in the unlawful acts and practices and other violations of law alleged below. Charlotte 

Collection Defendants have conducted the business practices described below through 

9 
inteuelated companies that have common ownership, officers, managers, business functions, 

employees, and office locations, and that have commingled funds. Because these Defendants 

have operated as a common enterprise, each of them is jointly and severally liable for the acts 

and practices alleged below. Defendants Ankh Ali, Aziza Ali, Moody, Carr, and Scinta, have 

formulated, directed, controlled, had the authority to control, or participated in the acts and 

practices of the Corporate Charlotte Collection Defendants that constitute the common 

enterprise. 

COMMERCE 

26. At all times material to this Complaint, Defendants have maintained a substantial 

course oftrade in or affecting commerce, as "commerce" is defined in Section 4 ofthe FTC Act, 

15 U.S.C. § 44. 

DEFENDANTS' MARKETING AND DISTRIBUTION OF COUNTERFEIT AND 

UNAUTHORIZED DEBTS 

27. Since at least 2014, and continuing thereafter, Brokering Defendants have 

engaged in a scheme to profit from the distribution and collection of counterfeit and 

unauthorized debt. Brokering Defendants have purchased and collected on two types of 

purported debt that consumers did not owe: counterfeit debts fabricated from misappropriated 

information about consumers' identities and finances; and debts purportedly owed on bogus 

"autofunded" payday loans that fraudulent enterprises imposed on consumers without their 

permission. Brokering Defendants have distributed and profited from these "phantom debts" 

despite receiving ample notice that the consumers did not actually owe them. 

10 
Creation of the Phantom Debts 

28. Consumer debts that have been charged-off by the original creditors are often sold 

to third parties for collection or sale to other collectors. Typically, the creditor or seller bundles 

debts into what they call "debt portfolios." The portfolios are typically spreadsheets with details 

about the consumers and their alleged debts. 

29. Since 2014, a person named Joel Tucker has sold debt portfolios that he either 

fabricated or that consisted of purported debts that consumers did not legitimately owe. Tucker 

has marketed counterfeit debts as owed to a number of different entities. Tucker has also 

distributed "debts" from "autofunded" loans that were foisted on consumers without their 

permission, which he packaged together with other purported debts under the name "Bahamas 

Marketing Group" or "BMG". On December 16, 2016, Plaintiff FTC sued Tucker for selling 

phantom debt in a case styled FTC v. Tucker, No. 2:16-cv-02816 (D. Kan. Dec. 16, 2016). On 

September 20, 2017, the court in that case entered default judgment against the defendants and 

found, among other things, that Tucker had, "marketed, distributed and sold counterfeit debt 

portfolios that purported to represent loans made by a variety of purported originators," in 

contravention of Section 5 ofthe FTC Act. FTC v. Tucker, No. 2:16-cv-02816 (D. Kan. Sept. 

20, 2017) (ECF No. 69 at *3.) 

30. Prior to 2016, Tucker had access to sensitive consumer information for millions 

of consumers. This information included consumers' bank account numbers, Social Security 

numbers, and other sensitive personal information. Tucker used this information to create or 

cause to be created fake debt portfolios by matching consumers' personal infomrntion to 

fabricated payday loan debts. Tucker, either directly or through entities under his control, then 

11 
sold these portfolios of counterfeit debt in spreadsheet format. The portfolios list consumer 

names and contact information along with Social Security numbers and financial account 

information. For each consumer identified, the portfolios provide detailed, but fabricated, 

information about purported payday loans, such as alleged original loan amounts, loan dates, 

repayment histories, and unpaid balances. 

31. In addition, Tucker, through entities he controlled, obtained and sold unauthorized 

payday loan debts. Tucker first sold purported payday loan leads, which included consumers' 

bank account information, to lenders associated with him. In many instances, these lenders then 

issued "loans" to consumers identified in the leads without their permission, a practice referred 

to as "autofunding." The lenders then attempted to withdraw money from consumers' bank 

accounts as "finance charges" without consumers' consent. When consumers denied the 

attempted debits, the lenders transferred the unauthorized loans to Tucker as "debts." In 

September 2014, the FTC and Consumer Financial Protection Bureau ("CFPB") filed suits 

against these purported lenders in two cases styled FTC v. CWB Services, et al., No. 

4:14-cv-00783 (W.D. Mo. Sept. 5, 2014) and CFPB v. Moseley, et al., No. 4:14-cv-00789 (W.D. 

Mo. Sept. 8, 2014). Tucker, either directly or through entities under his control, sold these debts 

to debt brokers, including Brokering Defendants. 

Brokering Defendants Repeatedly Purchase and Distribute Phantom Debts for Collection 

32. Brokering Defendants have operated as debt brokers since at least 2014. Among 

other things, Brokering Defendants have purchased and sold debt portfolios. Brokering 

Defendants have also placed debt for collection with their interrelated network ofdebt collection 

entities, including both the Buffalo Collection Defendants and Charlotte Collection Defendants 

12 
(collectively, "Collection Defendants"). Starting no later than 2014, Brokering Defendants 

began purchasing phantom debt portfolios from entities controlled by Tucker, through an 

intermediary, Hirsh Mohindra. On March 21, 2016, the FTC and the State ofIllinois sued 

Mohindra for selling counterfeit debt portfolios. FTC et al. v. Stark Law, LLC, et al., No. 

l:16-cv-3463 (N.D. Ill. Mar. 21 , 2016). 

33. On October 27, 2017, Mohindra agreed to entry of a stipulated judgment that, 

among other things, banned him from the debt collection industry and imposed a $47,220,491 

judgment. FTC v. Stark Law, LLC, No. l:16-cv-3463 (N.D. Ill. Oct. 27, 2017) (ECF No. 354 at 

*7, *9). 

34. In addition to placing the phantom debts with Collection Defendants, Brokering 

Defendants have sold and distributed these debts to other brokers and collectors. 

35. Brokering Defendants purchase, sell, and place these portfolios despite having 

notice that consumers do not owe the purported debts. For example, in March 2014, Defendant 

Carr received an email from a debt collector that had purchased debts from Defendant 

Midwestern Alliance. The collector complained that consumers were consistently repudiating 

the debts. In particular, the collector was concerned that the lender names were doctored, or 

fake. Defendants Carr and Hussain received a later email, dated June 11, 2014, from a 

Midwestern Alliance employee that stated, "this portfolio has a lot of clients who paid this off." 

36. Defendant Carr received another email in July 2014 from an unhappy debt 

collector that had recently purchased debts from Defendant Midwestern Alliance. The collector 

complained that the alleged debtors they were contacting were complaining about receiving calls 

13 
from multiple companies regarding the same alleged debt. Some ofthe alleged debtors 

provided proof that they had paid off the debt to another agency. 

37. That same month, Defendant Scinta raised issues internally regarding the 

accuracy and veracity of the information contained in the portfolios. Scinta noted the high 

number of consumer complaints stating that consumers did not owe the alleged debts, including 

consumers who could prove that the bank accounts listed for deposit were not even open at the 

time of the alleged deposit. Further, Scinta reported that numerous Social Security numbers, 

addresses, and names in the portfolios did not match. Despite this, Brokering Defendants 

continued to distribute and collect from the Tucker portfolios riddled with phantom debt. 

Brokering Defendants did not withdraw the Tucker portfolios that they had already placed, or tell 

purchasers of these portfolios that they contained phantom debt. 

38. In numerous instances, using information in debt portfolios marketed, distributed, 

sold, and placed by Brokering Defendants, debt collectors have contacted these consumers, 

demanded payment, and successfully induced consumers to pay the purported debts. In many 

instances, the debts in these portfolios were counterfeit or from "autofunded" loans. 

39. Consumers cannot reasonably avoid collection on these phantom portfolios. 

Consumers are not aware that their personal information has been misappropriated and used to 

create a counterfeit debt or an unauthorized loan. From the portfolios, debt collectors, including 

Collection Defendants, obtain consumers' private personal information and sensitive financial 

information, such as Social Security numbers, bank account numbers, and names ofreferences. 

Debt collectors recite such information to consumers to convince them that the purpmted loan is 

legitimate or that the collectors will be able to coerce the consumers to pay, even ifthey do not 

14 
legitimately owe the loan. Using this detailed information, collectors intimidated consumers 

into paying the purported debts. 

DEFENDANTS' DECEPTIVE AND ABUSIVE COLLECTION PRACTICES 

40. Since at least 2014, Brokering Defendants have placed debts that were counterfeit 

or from unauthorized loans for collection with Collection Defendants. 

41. Collection Defendants' scheme to collect on phantom debt is predicated on 

convincing consumers that a lawsuit has been, or will soon be filed against them and will result 

in dire consequences unless consumers pay Collection Defendants promptly. 

42. In furtherance of the scheme, Charlotte Collection Defendants often use a 

two-step collection process to lend credence to the misrepresentations that the consumer owes 

them a debt and that legal action against a consumer has begun or is imminent. Payments made 

by consumers are processed through merchant accounts controlled by Charlotte Collection 

Defendants before being deposited into Charlotte Collection Defendants' bank accounts. 

43. In the first step, Charlotte Collection Defendants initiate robocalls to consumers 

or their friends and family members, which consist of a prerecorded message that states or 

implies that a lawsuit has been or will soon be filed against the consumer, often regarding a 

purported outstanding debt owed by the consumer. In numerous instances, the prerecorded 

message states that the consumer must call another number for more information. The 

prerecorded message states that the next steps will be to notify the proper authorities. 

44. In numerous instances, in placing these initial robocalls to consumers, Charlotte 

Collection Defendants' collectors do not identify that the call is being placed by or on behalf of 

Charlotte Collection Defendants, that the call is coming from a debt collector who is attempting 

15 
to collect a debt from the consumer, or that any information obtained from the consumer will be 

used for that purpose. 

45. The second step of Charlotte Collection Defendants' collection process generally 

occurs when consumers call the telephone numbers that Collection Defendants' collectors 

provide in the initial call and are connected with collectors whose job is to secure consumers' 

payments for Collection Defendants. 

46. In numerous instances, Charlotte Collection Defendants' collectors who answer 

consumers' calls falsely represent that they are representatives of a law firm or a mediation 

company. In numerous instances, Charlotte Collection Defendants represent that they are 

calling from "County Mediations" and imply that they are affiliated with the local state 

courthouse. 

47. Similarly, in numerous instances, Buffalo Collection Defendants falsely represent 

to consumers during collection calls that they are representatives of a law firm, a mediation 

company, or other company such as "Kingston Marketing." 

48. In numerous instances on these calls, Collection Defendants' collectors inform 

consumers that they are delinquent on a payday loan or other debt and that legal action has been 

taken or will be taken shortly against the consumer. In numerous instances, Collection 

Defendants' collectors advise consumers that they can settle the action by making a payment 

over the telephone via the consumer's credit or debit card. 

49. In some instances, Collection Defendants' collectors possess, or claim to possess, 

the consumers' private information, such as Social Security numbers, bank account numbers, or 

16 
names and contact information ofrelatives, convincing consumers that the calls are legitimate 

collection efforts and that consumers must pay the purportedly delinquent debts. 

50. In numerous instances, to coerce consumers into paying the purported debts, 

Collection Defendants' collectors threaten consumers with prosecution ifthey fail to pay the 

alleged debt immediately. For example, Collection Defendants have told consumers that the 

district attorney is going to file charges against them for intent to defraud or for processing hot 

checks. 

5 1. In fact, in numerous instances when Collection Defendants threaten consumers 

with legal action, no legal action has been taken, Collection Defendants do not intend to take any 

such legal action, and Collection Defendants do not have authority to take any such legal action. 

Collection Defendants also cannot have consumers prosecuted for non-payment of a private debt. 

Further, neither Collection Defendants nor their representatives are attorneys or are working for 

attorneys, and Collection Defendants are not a law firm. 

52. Moreover, in numerous instances, consumers do not owe the purported debt or 

Collection Defendants are not authorized to collect on the debt. In fact, in numerous instances, 

consumers' bank statements verify that they never received the purported loan. 

53. In numerous instances, Collection Defendants also have communicated with third 

parties. In numerous such instances, Collection Defendants: (1) already possessed location 

information for the consumer, including the consumer's place ofabode, telephone number, or 

place of employment; (2) disclosed the consumer's purported debt to the third party; or (3) 

represented to the third party that Collection Defendants will commence legal action against the 

putative debtor ifthe debt is not paid. 

17 
54. In numerous instances, in subsequent communications with consumers, Collection 

Defendants' collectors fail to disclose that they are debt collectors. 

55. In numerous instances, Collection Defendants fail to provide consumers, within 

five days after the initial communication with consumers, a written notice containing (1) the 

amount of the debt; (2) the name ofthe creditor to whom the debt is owed; (3) a statement that 

unless the consumer disputes the debt, the debt will be assumed valid; and (4) a statement that if 

the consumer disputes the debt in writing, Collection Defendants will obtain verification of the 

debt. 

56. Many consumers pay the alleged debts that Collection Defendants purport to be 

collecting because they are afraid of the threatened repercussions of failing to pay, because they 

believe Collection Defendants are legitimate and are collecting real delinquent debt, or because 

they want to stop the harassment. Generally, consumers make these payments using a credit 

card, debit card, or electronic transfer from their bank account. Merchant accounts Collection 

Defendants use to process payments from consumers are held in the name of OAFS or T ACS. 

57. Since at least 2017, Collection Defendants have collected over $4.3 million from 

consumers through their unlawful debt collection scheme. 

VIOLATIONS OF THE FTC ACT 

58. Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a), prohibits "unfair or deceptive acts 

or practices in or affecting commerce." 

59. Misrepresentations or deceptive omissions of material fact constitute deceptive 

acts or practices prohibited by Section 5(a) of the FTC Act. 

18 
60. Acts or practices are unfair under Section 5 of the FTC Act if they cause or are 

likely to cause substantial injury to consumers that consumers cannot reasonably avoid 

themselves and that is not outweighed by countervailing benefits to consumers or competition. 

15 U.S.C. § 45(n). 

COUNT I 

Means and Instrumentalities to Mislead 

(Against Brokering Defendants) 

61. In numerous instances, in connection with their marketing, distribution, sale, and 

placement of purported payday loan debt portfolios, Brokering Defendants have represented, 

directly or indirectly, expressly or by implication, that consumers listed in those portfolios owe 

unpaid payday loan debts, and that those who obtain the portfolios through Brokering 

Defendants have the right to collect debts listed in the portfolios. 

62. In truth and in fact, in numerous instances, consumers listed in those portfolios 

that Brokering Defendants have marketed, distributed, sold, and placed did not owe the 

purported debts, or collectors that obtained those portfolios did not have the right to collect those 

purported debts. 

63. By making the representations in Paragraph 6 I, Brokering Defendants placed in 

the hands of debt collectors the means and instrumentalities by and through which they may 

mislead consumers regarding their debt obligations. 

64. Therefore, Brokering Defendants' representations, as set forth in Paragraph 61 of 

this Complaint are false or misleading, and constitute deceptive acts or practices in violation of 

Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a). 

19 
COUNT II 

Unfair Distribution of Counterfeit or Unauthorized Debts for Collection 

(Against Brokering Defendants) 

65. In numerous instances, Brokering Defendants have distributed, placed for 

collection, and sold debts that were counterfeit or from unauthorized loans. 

66. Brokering Defendants' actions cause or are likely to cause substantial injury to 

consumers that consumers cannot reasonably avoid themselves and that is not outweighed by 

countervailing benefits to consumers or competition. 

67. Therefore, Brokering Defendants' actions as described in Paragraph 65 above 

constitute unfair acts or practices in violation of Section 5 ofthe FTC Act, 15 U.S.C. §§ 45(a) 

and (n). 

COUNT III 

False or Unsubstantiated Representations That Consumers Owe Debts 

(Against Collection Defendants) 

68. In numerous instances, in connection with the collection of alleged debts, 

Collection Defendants have represented, directly or indirectly, expressly or by implication, that: 

(a) The consumer is delinquent on a payday loan or other debt that Collection 

Defendants have the authority to collect; or 

(b) The consumer has a legal obligation to pay Collection Defendants. 

69. The representations set forth in Paragraph 68 are false or misleading or were not 

substantiated at the time the representations were made. 

70. Therefore, the making of the representations as set forth in Paragraph 68 ofthis 

Complaint constitutes a deceptive act or practice, in or affecting commerce in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

20 
COUNTIV 

False or Misleading Representations Regarding Legal Action 

(Against Collection Defendants) 

71. In numerous instances, in connection with the collection of alleged debts, 

Collection Defendants have represented, directly or indirectly, expressly or by implication, that: 

(a) Collection Defendants are attorneys or affiliated with attorneys; 

(b) Collection Defendants are a law firm or affiliated with a law firm; 

(c) The consumer will be prosecuted for failing to pay Collection Defendants; and 

(d) Collection Defendants have taken, intend to take, or have authority to take formal 

legal action against a consumer who fails to pay, such as filing suit. 

72. In truth and in fact, in numerous instances in which Collection Defendants have 

made the representations set forth in Paragraph 71 ofthis Complaint: 

(a) Collection Defendants are not attorneys or affiliated with attorneys; 

(b) Collection Defendants are not a law firm or affiliated with a law firm; 

(c) The consumer will not be prosecuted for failing to pay Collection Defendants; and 

(d) Collection Defendants have not taken, do not intend to take, or do not have 

authority to take formal legal action against a consumer who fails to pay, such as filing suit. 

73. Therefore, Collection Defendants' representations as set forth in Paragraph 71 of 

this Complaint are false or misleading and constitute deceptive acts and practices in violation of 

Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a). 

VIOLATIONS OF THE FDCPA 

74. In 1977, Congress passed the FDCPA, 15 U.S.C. §§ 1692-1692p, which became 

effective on March 20, 1978, and has been in force since that date. Under Section 814 of the 

21 
FDCPA, 15 U.S.C. § 1692/, a violation of the FDCPA is deemed an unfair or deceptive act or 

practice in violation ofthe FTC Act. Further, the FTC is authorized to use all of its functions 

and powers under the FTC Act to enforce compliance with the FDCP A. 

75. Collection Defendants are "debt collectors" as defined by Section 803(6) of the 

FDCPA, 15 U.S.C. § 1692a(6). 

76. A "consumer," as defined in Section 803(3) of the FDCPA, 15 U.S.C. § 1692a(3), 

"means any natural person obligated or allegedly obligated to pay any debt." 

77. A "debt," as defined in Section 803(5) ofthe FDCPA, 15 U.S.C. § 1692a(5), 

"means any obligation or alleged obligation of a consumer to pay money arising out of a 

transaction in which the money, property, insurance or services which are the subject ofthe 

transaction are primarily for personal, family, or household purposes, whether or not such 

obligation has been reduced to judgment." 

78. The term " location information," as defined in Section 803(7) ofthe FDCPA, 15 

U.S.C. § l 692a(7), means "a consumer's place of abode and his telephone number at such place, 

or his place of employment." 

COUNTY 

Unlawful Third-Party Communications 

(Against Collection Defendants) 

79. In numerous instances, in connection with the collection of debts, Collection 

Defendants have communicated with persons other than the consumer, the consumer's attorney, 

a consumer reporting agency ifotherwise permitted by law, the creditor, the attorney of the 

creditor, the attorney ofthe debt collector, the consumer's spouse, parent (if the consumer is a 

minor), guardian, executor, or administrator for purposes other than acquiring location 

22 
information about a consumer, without having obtained directly the prior consent of the 

consumer or the express permission ofa court of competent jurisdiction, and when not 

reasonably necessary to effectuate a post-judgment judicial remedy, in violation of Section 

805(b) ofthe FDCPA, 15 U.S.C. § 1692c(b). 

COUNT VI 

Calls Without Meaningful Disclosure ofIdentity 

(Against Collection Defendants) 

80. In numerous instances, in connection with the collection of debts, Collection 

Defendants have engaged in conduct the natural consequence ofwhich is to harass, oppress, or 

abuse the caller, including, but not limited to, by placing telephone calls without meaningful 

disclosure of the caller's identity, in violation of Section 806(6) of the FDCPA, 15 U.S.C. 

§ 1692d(6). 

COUNT VII 

False or Misleading Representations 

(Against Collection Defendants) 

81. In numerous instances, in connection with the collection of debts, Collection 

Defendants have, directly or indirectly, expressly or by implication, used false, deceptive, or 

misleading representations or means, in violation of Section 807 ofthe FDCPA, 15 U.S.C. § 

l 692e, including, but not limited to: 

(a) Falsely representing the character, amount, or legal status of any debt, in violation 

of Section 807(2)(A) ofthe FDCPA, 15 U.S.C. § l 692e(2)(A); 

(b) Falsely representing or implying that any individual representative is an attorney 

or that any communication is from an attorney, in violation of Section 807(3) of 

the FDCPA, 15 U.S.C. § 1692e(3); 

23 
(c) Threatening to take action that is not lawful or the Collection Defendants do not 

intend to take, such as filing a lawsuit, in violation of Section 807(5) of the 

FDCPA, 15 U.S.C. § 1692e(5); 

(d) Using false representations or deceptive means to collect or attempt to collect a 

debt or to obtain information concerning a consumer, in violation of Section 

807(10) ofthe FDCPA, 15 U.S.C. § 1692e(10); 

(e) Failing to disclose (1) in the initial oral communication with consumers that 

Collection Defendants are debt collectors attempting to collect a debt and that any 

information obtained by Collection Defendants from consumers will be used for 

the purpose of attempting to collect a debt and (2) in subsequent communications 

with consumers that Collection Defendants are debt collectors, in violation of 

Section 807(11) ofthe FDCPA, 15 U.S.C. § 1692e(l l); and 

(f) Using a business, company, or organization name other than the true name of 

Collection Defendants' business, company, or organization, in violation of 

Section 807(14) ofthe FDCPA, 15 U.S.C. § 1692e(14). 

COUNT VIII 

Failure to Provide a Validation Notice 

(Against Collection Defendants) 

82. In numerous instances, in connection with the collection of debts, Collection 

Defendants have failed to send consumers, within five days after the initial communication with 

consumers, a written notice containing (1) the amount ofthe debt; (2) the name ofthe creditor to 

whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt 

ofthe notice, disputes the validity ofthe debt, or any portion thereof, the debt will be assumed to 

24 
be valid by Collection Defendants; ( 4) a statement that if the consumer notifies Collection 

Defendants in writing within the thirty-day period that the debt, or any portion thereof, is 

disputed, Collection Defendants will obtain verification of the debt or a copy of a judgment 

against the consumer and a copy ofsuch verification orjudgment will be mailed to the consumer 

by Collection Defendants; and (5) a statement that, upon the consumer's written request within 

the thirty-day period, Collection Defendants will provide the consumer with the name and 

address ofthe original creditor, if different from the current creditor, in violation of Section 

809(a) ofthe FDCPA, 15 U.S.C. § 1692g(a). 

CONSUMER INJURY 

83. Consumers have suffered and will continue to suffer substantial injury as a result 

ofDefendants' violations ofthe FTC Act and the FDCPA. In addition, Defendants have been 

unjustly enriched as a result oftheir unlawful acts or practices. Absent injunctive relief by this 

Court, Defendants are likely to continue to injure consumers, reap unjust enrichment, and harm 

the public interest. 

THIS COURT'S POWER TO GRANT RELIEF 

84. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), and Section 814(a) of the 

FDCPA, 15 U.S.C. § 1692/(a), empower this Court to grant injunctive and such other relief as 

the Court may deem appropriate to halt and redress violations of any provision of law enforced 

by the FTC. The Court, in the exercise of its equitable jurisdiction, may award ancillary relief, 

including rescission or reformation of contracts, restitution, the refund ofmonies paid, and the 

disgorgement of ill-gotten monies, to prevent and remedy any violation of any provision of law 

enforced by the FTC. 

25 
PRAYER FOR RELIEF 

Wherefore, Plaintiff FTC, pursuant to Section 13(b) ofthe FTC Act, 15 U.S.C. § 

53(b), and Section 814(a) ofthe FDCPA, 15 U.S.C. § 1692/(a), and the Court's own equitable 

powers, requests that the Court: 

A. Award Plaintiffsuch preliminary injunctive and ancillary relief as may be 

necessary to avert the likelihood of consumer injury during the pendency of this action and to 

preserve the possibility of effective final relief, including but not limited to, temporary and 

preliminary injunctions, an order freezing assets, immediate access to business premises, and 

appointment of a receiver; 

B. Enter a permanent injunction to prevent future violations of the FTC Act and the 

FDCP A by Defendants; 

C. Award such relief as the Court finds necessary to redress injury to consumers 

resulting from Defendants' violations ofthe FTC Act and the FDCPA, including but not limited 

to, rescission or reformation ofcontracts, restitution, the refund ofmonies paid, and the 

disgorgement of ill-gotten monies; and 

26 
D. Award Plaintiff the costs of bringing this action, as well as such other and 

additional relief as the Court may determine to be just and proper. 

Dated: February 4, 2019 Respectfully submitted, 

ALDEN F. ABBOTT 

General Counsel 

~~--------

QUINN MARTIN 

GREGORY A. ASHE 

Federal Trade Commission 

600 Pennsylvania A venue NW 

Washington, DC 20580 

Telephone: 202-326-2080 (Martin) 

Telephone: 202-326-3719 (Ashe) 

Facsimile: 202-326-3768 

Email: qmartin@ftc.gov, gashe@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

27