The owner of Credit Specialty Service, a collection agency based in Acton, Calif., has been arrested and charged with stealing millions of dollars from its clients.
Charles V. Stanley, Jr., was arrested earlier this month. His firm is accused of collecting on debts on behalf of a number of creditors, but under-reporting the amount collected. The agency, CSS, filed for bankruptcy protection last year.
More than two dozen creditors have filed petitions with the bankruptcy court, alleging that they are owed nearly $20 million, according to court records.
A credit union in California is cited as bringing the alleged illegal activities to the attention of law enforcement, after the collection agency stopped remitting payments back to the financial institution. The credit union sued the agency, alleging that employees of CSS were forging signatures of credit union employees and that the agency obtained judgments and initiated lawsuits against individuals without the consent or permission of the credit union. The agency even continued to collect debts on behalf of a credit union after the credit union had terminated its agreement with CSS and removed its accounts.
Stanley is alleged to have been mis-appropriating funds from clients for more than four years. Without providing specifics, the indictment claims that Stanley’s actions cost the agency’s clients “several million dollars.”
Stanley has been charged with 15 counts of fraud and conspiracy.
