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 Michael Levitis and his company, Mission Settlement Agency, entered
the guilty pleas in Manhattan federal court, less than a year after
prosecutors announced charges over a scheme that they said
victimized more than 1,200 people across the country from 2009 to
2013.
At the time, the office of Manhattan U.S. Attorney Preet Bharara
called it the first criminal referral from the CFPB, an agency
created as part of the Dodd-Frank Wall Street Reform and Consumer
Protection Act in 2010.
Prosecutors accused Mission of touting its ability to help customers
reduce their credit card and other debt. Instead, the company
charged excessive fees while failing to aid its clients.
"I'm here to take responsibility for my actions," said Levitis, 37,
before U.S. District Judge Paul Gardephe. "I took advantage of
people who were struggling financially and caused them further
hardship."
His mother, Eva Levitis, who was Mission Settlement's president,
entered a guilty plea on behalf of the company. She was not
criminally charged.
Michael Levitis and Mission Settlement both agreed to forfeit $2.2
million as part of the plea agreement. Levitis faces up to 10 years
in prison, while the company faces an additional fine of up to $4.39
million.
Four other former Mission employees previously have pleaded guilty;
charges against a fifth remain pending.
Levitis, a suspended lawyer, was previously sentenced in August 2011
to three years of probation and fined $15,000 for lying to federal
agents during an investigation into former New York State Senator
Carl Kruger, who pleaded guilty to corruption charges in 2011.
Charles Ross, a lawyer for Levitis, told Gardephe on Tuesday that
the CFPB has indicated it plans to dismiss a parallel civil lawsuit
against Levitis and Mission in light of the forfeiture agreement
with prosecutors.
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Samuel Gilford, a spokesman for the CFPB, declined to comment on the
status of the agency's case. He also declined to disclose how many
other cases the agency had referred to federal prosecutors.
"The CFPB takes its statutory obligation to refer criminal conduct
seriously, and we do it in appropriate circumstances," Gilford said.
Levitis pleaded guilty to one count of conspiracy to commit mail and
wire fraud and one count of conspiracy to commit wire fraud. His
maximum prison sentence is five years on each count.
Mission pleaded guilty to a single count of conspiracy to commit
mail and wire fraud.
"Michael Levitis and his company, Mission Settlement Agency, preyed
on the desperation of financially struggling people across the
country," Bharara said in a statement following the guilty pleas.
The case is U.S. v. Mission Settlement Agency, U.S. District Court,
Southern District of New York, No. 13-cr-j00327.
(Reporting by Nate Raymond in New York;
editing by Tom Brown)
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