The owner of a collection agency who pleaded guilty to charges of wire fraud and tax evasion was sentenced yesterday to 33 months in prison. Under federal law, Kevin Welsch of Fort Thomas, Kent., will have to serve at least 85% of that sentence — 28 months — before being eligible for parole.
Welsch admitted to defrauding clients of the debt collection business he owned and operated, called RCC Services. He kept the money he collected on behalf of his clients and used it for his own purposes, according to prosecutors. Welsch allegedly collected more than $837,000 on behalf of his clients, but only remitted $64,000 of those funds back to them.
Welsch also admitted to collecting more from debtors than what they owed, sometimes making multiple unauthorized withdrawals from their accounts and charging his clients for fees and expenses that were not incurred. Welsch also admitted to evading taxes in the process.
One of his former clients said Welsch preyed on small businesses. The woman hired Welsch to collect on a $5,400 debt. After claiming the debt could not be collected and telling the client he obtained a judgment, the woman found out that the debt had been paid but Welsch had never forwarded the money to her.
“At first, Kevin was very nice, very sympathetic on us losing almost $6,000. Then he kind of fell of the map, and the lies started. At one point, he told me he couldn’t get back to me because his wife was in the hospital having a baby. That wasn’t true,” said Lori Kott, who placed the debt.
Kott eventually started looking into Welsch and found others who had similar complaints. She submitted her findings to law enforcement, who took the case from there.
