A collection agency’s involvement in a federal pay-to-play scandal has cost it an additional $25,000 after entering into a consent order with the Massachusetts Division of Banks.
Penn Credit will pay the administrative penalty after notifying the regulator that its Chief Executive, Don Donagher, had pleaded guilty to felony charges of corruptly giving something of value to reward a public official — a payment of $869 to a trophy company that provided plaques to judges being honored at an event sponsored by the former Circuit Court Clerk of Cook County, Illinois. The company was indicted in 2019.
The consent order in Massachusetts does not specifically cite what rules may have been broken, but does mention that companies licensed to collect in the state are required to notify the Commissioner of the Division of Banks within one business day after the filing of a criminal indictment, which Penn Credit did on October 12, 2021.
Along with the $25,000 fine, Penn Credit is also required to provide the Division with a report every quarter that details the compliance measures that have been implemented as a result of its deferred prosecution agreement in the pay-to-play scandal. The company is also required to notify the Division if there is any violation of the deferred prosecution agreement.
Under the deferred prosecution agreement, Penn Credit admitted to engaging in the corruption scheme at Donagher’s request. After paying a fine of $225,000 and agreeing to take “remedial measures to enhance its ethics and compliance programs” and continuing to cooperate with prosecutors for two years, the charges against the company will be dismissed.
