Colorado Attorney General John Suthers has sued collection agencies United Credit Recovery, GTF Services and Standley & Associates for allegedly using fraudulent bank documents to try collecting outstanding debts and for engaging in deceptive trade practices that harmed consumers.
UCR purchased consumer debt from Wells Fargo and US Bank and, according to the complaint, then used account information provided by the banks to create hundreds of fake affidavits purporting to describe and to verify debt owed by consumers. Leonard Potillo, UCR's principal and director, also was sued.
The civil lawsuit, filed in Denver District Court, stated that UCR sold accounts of Colorado consumers to other agencies and distributed the falsely-created affidavits to those agencies. Investigators alleged that UCR profited by using the fake affidavits and reselling debt to third-party collectors.
The lawsuit alleged that the fabricated affidavits helped in the collection of money from Colorado consumers by being filed in court as evidence of the amount of money owed and by being presented as validation of the debt directly to Colorado consumers.
"UCR faked bank officer signatures on documents to orchestrate a debt-for-sale scheme from which they handsomely profited," Suthers alleged in a statement. "The scheme involved thousands of individual accounts totaling tens of millions of dollars."
GTF allegedly used the affidavits through collection law firm Standley & Associates, which filed the affidavits in more than 300 collection lawsuits.
The lawsuit asks that civil penalties be imposed against the defendants; that actual damages be awarded to the injured consumers; that restitution of money be made to persons harmed by the violations; and award costs, expenses and attorneys' fees incurred by the state of Colorado. The defendants could not be immediately reached for comment on the lawsuit.