Month: October 2022

Source: United States Department of Justice 2

The Justice Department announced that GM Financial has agreed to pay over $3.5 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by illegally repossessing 71 servicemembers’ vehicles and by improperly denying or mishandling over 1,000 vehicle lease termination requests. 

“Members of our Armed Forces should not have to suffer financial hardship as a result of their service to our nation,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division remains steadfast in its commitment to enforcing laws that safeguard the rights of our servicemembers so that they can devote their energy and attention to the defense of our country.”

“The last thing servicemembers should be worried about while deployed is paying off vehicle leases they don’t want and can’t use,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “As members of our armed forces put their lives on the line for our country, we are determined to protect their rights here at home.”

The SCRA is a federal law that provides certain legal and financial protections for servicemembers and their families. The law prevents an auto finance or leasing company from repossessing a servicemember’s vehicle without first obtaining a court order, as long as the servicemember made at least one payment on the vehicle before entering military service. The SCRA also allows servicemembers to terminate a vehicle lease early after entering military service or receiving certain qualifying military orders. If a servicemember terminates a vehicle lease under the SCRA, the leasing company may not impose any early termination charges and must refund, within 30 days, any rent or lease amounts paid in advance.

The Justice Department began investigating GM Financial after receiving a complaint about a potential violation involving U.S. Army Chief Warrant Officer 3 (CW3) Thomas Gorgeny. In September 2017, CW3 Gorgeny received orders to deploy overseas for 10 months and requested that GM Financial allow him to terminate his vehicle lease early pursuant to the SCRA. Although GM Financial told CW3 Gorgeny that his early termination request was approved and he returned his vehicle to the dealer, months later, while he was deployed overseas, CW3 Gorgeny received a letter from GM Financial demanding that he pay over $15,000 to cover the entire remaining period of the lease, as well as costs associated with the sale of the vehicle. 

In a complaint filed in the U.S. District Court for the Northern District of Texas, the department alleges that, since 2015, GM Financial has improperly denied servicemembers’ lease termination requests, charged servicemembers improper early termination fees or lease amounts after the date of termination, and failed to provide servicemembers timely refunds of lease amounts they paid in advance. The department alleges that GM Financial’s failure to properly handle servicemembers’ lease termination requests resulted in over 1,000 SCRA violations. The complaint also alleges that, since 2015, GM Financial has unlawfully repossessed 71 vehicles owned by SCRA-protected servicemembers.

Under the consent order, GM Financial has agreed to pay $3,534,171 to the affected servicemembers and a $65,480 civil penalty to the United States. GM Financial will pay at least $10,000 to each of the 71 servicemembers who had their vehicles unlawfully repossessed. For the servicemembers who were charged an improper fee when they terminated their vehicle leases, GM Financial will refund the fee and will pay additional damages of three times the fee or $500, whichever is greater. Servicemembers whose requests to terminate their vehicle leases were improperly denied will receive a refund of certain payments plus up to $5,000 in additional damages. The order also requires GM Financial to repair the servicemembers’ credit, provide SCRA training to its employees, and implement policies and procedures that comply with the SCRA.

GM Financial is a wholly-owned subsidiary of General Motors, and provides financing for vehicle sales and leases. In 2021, GM Financial had revenue exceeding $13 billion.

This case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section, with the assistance of the U.S. Attorney’s Office for the Northern District of Texas.

Since 2011, the Justice Department has obtained over $480 million in monetary relief for over 123,000 servicemembers through its enforcement of the SCRA. For more information about the department’s SCRA enforcement efforts, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.

Source: United States Department of Justice 2

NEW ORLEANS – The Justice Department announced on October 4, 2022 the results of its efforts over the past year to protect older adults from fraud and exploitation. During the past year, the Department and its law enforcement partners tackled matters that ranged from mass-marketing scams that impacted thousands of victims to bad actors scamming their neighbors. Substantial efforts were also made over the last year to return money to fraud victims. Today, the Department also announced it is expanding its Transnational Elder Fraud Strike Force to amplify efforts to combat scams originating overseas.

 “We are intensifying our efforts nationwide to protect older adults, including by more than tripling the number of U.S. Attorneys’ offices participating in our Transnational Elder Fraud Strike Force dedicated to disrupting, dismantling and prosecuting foreign-based fraud schemes that target American seniors,” said Attorney General Merrick B. Garland. “This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”

“Elder fraud schemes unfairly target elderly, disabled and other vulnerable consumers, ensnaring them into fraudulent ventures with wide reaching consequences and excessive losses, which have a profound effect on our community and nation.  With the continued cooperation from our investigative partners, we will hold the perpetrators of elder fraud schemes accountable for their crimes. Our office reminds seniors and their caregivers to be vigilant for fraudulent schemes and, if victimized, to contact law enforcement,” stated U.S. Attorney Duane A. Evans.

During the period from September 2021 to September 2022, Department personnel and its law enforcement partners pursued approximately 260 cases involving more than 600 defendants, both bringing new cases and advancing those previously charged.  For example, the  EDLA prosecuted the following Elder Fraud matters:

Claudua Antillon Zahuita, age 38, and Sergio Leon Kuri, age 40, both residents and citizens of Mexico, were sentenced  to prison on September 29, 2021 after they each pleaded guilty to one count of conspiracy to commit wire fraud.  Zahuita received 48 months, while Kuri received 60 months.  As part of the elaborate scheme, the conspirators made unsolicited phone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property. The defendants misrepresented the existence of a buyer for their timeshare and solicited money from the victims to facilitate the sale. They solicited the timeshare owners to enter into agreements to sell their timeshares and pay for alleged “closing costs” with electronic wire transfers from banking institutions within the United States to Mexican banks. There were no interested buyers, the closings did not occur, and the timeshares were not resold. Instead, the conspirators simply pocketed the advanced fees. Of the U.S. victims, 40 were age 60 and older and the total estimated loss is at least $20,000,000; and

Karen Farrell Tigler, of Harvey, Louisiana, pled guilty on May 11, 2022 to Bank Fraud and Making and Subscribing False Tax Returns.  According to court documents, Tigler was employed as banker with a local bank and used her position to embezzle approximately $349, 556 from and elderly client’s account.  Tigler faces a maximum term of thirty (30) years imprisonment and/or a fine of $1,000,000.00 or the greater of twice the gross gain to the defendant or twice the gross loss to any person of the offense; and

Acdane Campbell, age 25, a resident of Jamaica, was sentenced on May 26, 2022 to serve 10 months in prison after previously pleading guilty to a one count indictment for Conspiracy to Commit Mail and Wire Fraud.  According to court records, from in or around August 2016, Campbell, and others, conspired to obtain money unlawfully by falsely informing elderly victims that they had won a lottery, sweepstakes, or car. The unidentified co-conspirators telephoned   the victims, promising them that they would receive their winnings if they first paid taxes and fees.

As an additional part of the EDLA’s elder fraud initiative, it has conducted  outreach to both the community and  industry to raise awareness of the ever-present threats of exploitative scams and the  victimization they unleash. This year, our office also participated in Elder Justice presentations at local Retirement Communities that focused on the identification  and  prevention of financial, physical, and emotional crimes against senior populations.

The Department also highlighted three other efforts: expansion of the Transnational Elder Fraud Task Force, success in returning money to victims and efforts to combat grandparent scams. 

The Department announced that as part of its continuing efforts to protect older adults and bring perpetrators of fraud schemes to justice it is expanding the Transnational Elder Fraud Strike Force, adding 14 new U.S. Attorney’s Offices. Expansion of the Strike Force will help to coordinate the Department’s ongoing efforts to combat largest and most harmful fraud schemes that target or disproportionately impact older adults.

In the past year, the Department has notified over 550,000 people that they may be eligible for remission payments. Notifications were made to consumers whose information was sold by one of three data companies prosecuted by the Department and were later victims of “sweepstakes” or “astrology” solicitations that falsely promised prizes or individualized services in return for a fee. More than 150,000 of those victims cashed checks totaling $52 million, and thousands more are eligible to receive checks. Also notified were consumers who paid fraudsters perpetrating person-in-need scams and job scams via Western Union. In the past year, the Department has identified and contacted over 300,000 consumers who may be eligible for remission. Since March of 2020 more than 148,000 victims have received more than $366 million because of a 2017 criminal resolution with Western Union for the company’s willful failure to maintain an effective anti-money laundering program and its aiding and abetting of wire fraud.

Over the past year, the Department pursued cases against the perpetrators of “grandparent scams,” otherwise known as “person-in-need scams.” These scams typically begin when a fraudster, often based overseas, contacts an older adult, and poses as either a grandchild, other family member or someone calling on behalf of a family member. Call recipients are told that their family member is in jeopardy and is urgently in need of money. When recently sentencing one of eight perpetrators of a grandparent scam indicted under the Racketeer Influenced and Corrupt Organizations Act, a federal judge described such scams “heartbreakingly evil.” The Department is working with government partners and others to raise awareness about these schemes.

Reporting from consumers about fraud and fraud attempts is critical to law enforcements efforts to investigate and prosecute schemes targeting older adults. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available the National Elder Fraud Hotline: 1-833 FRAUD-11 (1-833-372-8311). This Department of Justice Hotline, managed by the Office for Victims of Crime, is staffed by experienced professional who provide personalized support to callers by assessing the needs of the victim and identifying next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting or connect them with agencies, and provide resources and referrals on a case-by-case basis. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m.[ET]. English, Spanish, and other languages are available. More information about the Department’s elder justice efforts can be found on the Department’s Elder Justice website, www.elderjustice.gov.

Some of the cases that comprise today’s announcement are charges, which are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.