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Debt relief company, owner plead guilty to multimillion-dollar scheme

NEW YORK - Mission Settlement Agency (“Mission”) and its owner, Michael Levittis, pled guilty in Manhattan federal court to fraud charges in connection with a multimillion-dollar scheme that victimized more than 1,200 financially struggling people across the country. Levittis and Mission were charged in May 2013, and both pled guilty today before U.S. District Judge Paul G. Gardephe. Four other defendants previously pled guilty for their roles in the scheme.

“Michael Levitis and his company, Mission Settlement Agency, preyed on the desperation of financially struggling people across the country,” said Manhattan U.S. Attorney Preet Bharara. “Today’s guilty pleas ensure that the defendants who falsely offer debt relief, telling their victims a pack of lies in order to line their own pockets, will be held to account.”

Beginning in 2009, Mission offered “debt settlement” services to financially disadvantaged people who were struggling or unable to pay their credit card debts. Like other purported debt settlement providers, Mission held itself out as a company that could successfully negotiate to lower the overall debt its customers owed to credit card companies and banks. Mission solicited prospective customers through telemarketing and mail solicitations. Thereafter, Mission’s sales representatives typically spoke to the prospective customers on the phone, describing Mission’s work and its supposed ability to renegotiate debt.

From 2009 through May 2013, at Levittis’s direction, the defendants systematically exploited and defrauded over 1,200 customers, who were financially disadvantaged people across the country struggling to pay their credit card debts. They tricked people into paying Mission for purported debt settlement services by lying to prospective customers about Mission’s ability to help settle their debts, the fees that Mission charged, and Mission’s purported affiliation with the federal government. Among other things, the defendants:

  • Lied about and/or concealed Mission’s fees, falsely assuring customers that Mission would charge a mere $49 per month when, in truth, Mission took thousands of dollars in fees from funds that its customers believed would be used to pay creditors,
  • Deceived customers by fraudulently and falsely promising that Mission could slash their debts – typically, by 45% -- when, in fact, for the majority of its customers, Mission did little or no work and failed to achieve any reduction in debt,
  • Sent prospective customers solicitation letters that falsely suggested that the agency was acting on behalf of or in connection with a federal governmental program, which letters included an image of the Great Seal of the United States and indicated that they were coming from the “Reduction Plan Administrator” of the purported “Office of Disbursement.”

In connection with the scheme, Mission received over $6.6 million in fees. For more than 1,200 of its customers, Mission took fees totaling nearly $2.2 million but never paid a penny to the customers’ creditors. Levittis used the money that Mission took from its customers to pay for, among other things, the operating expenses of a restaurant/nightclub he controlled, lease payments for two different luxury Mercedes cars, and credit card bills for his mother.

Levittis, 37, of Brooklyn, pled guilty to one count of conspiracy to commit mail and wire fraud, and one count of conspiracy to commit wire fraud, and faces a maximum sentence of 10 years in prison. Mission pled guilty to one count of conspiracy to commit mail and wire fraud, and faces a fine of up to twice the gross pecuniary gain derived from the offense, and up to five years' probation. The defendants are scheduled to be sentenced in federal court on August 21, 2014.