Charles Stanley, the owner of Credit Specialty Service, a collection agency based in Acton, Calif., has been sentenced to six years in prison after being accused of stealing $4 million in from its clients. Stanley pleaded guilty to charges of conspiring to commit bank fraud and wire fraud.
At Stanley’s direction, employees collected money on behalf of the agency’s clients, but underreported how much was actually being collected. Stanley also filed lawsuits against individuals without being authorized to do so by the agency’s clients, and continued to collect on debts after clients terminated their contracts with the agency.
The agency’s clients and individuals lost about $4 million, according to federal prosecutors. Stanley was accused of using $839,608 of the funds for his own personal spending.
After he was arrested and freed on bail, Stanley was accused of continuing to commit collection-related crimes. He allegedly used his time out of jail to open bank accounts in the name of a defunct law firm to receive commissions for funds that were collected by the firm on behalf of the Sacramento County Sheriff’s Department. The law firm used to work with creditors in wage garnishment cases, in which some of the funds were paid to the Sheriff’s Department. Stanley allegedly submitted 77 claims to the Sheriff’s Department, saying that the firm never received its commission. The Sheriff’s Department sent the “law firm” more than $7,000.
The actions caused prosecutors to revoke Stanley’s bail, a decision he appealed to the Ninth Circuit. The Appeals Court denied his request.
