A crackdown on identity theft in Minnesota has led the state's Department of Commerce to charge two collection agencies with forging signatures in order to access consumer funds.
The department issued a statement of identity theft charges and a notice of hearing against Lee Hanna and St. Paul, Minn.-based debt collector HS and Associates. Hanna allegedly took money from clients' trust accounts and used some of it for personal expenses. Through its investigation, the department specifically believes Hanna opened a credit card account in the name of John Schnell and misappropriated $14,389.91. Hanna allegedly forged two checks in Schnell's name totaling $6,500. The department further alleges that Hanna transferred at least $19,000 of clients' money out of the HS and Associates trust account. Finally, Hanna also allegedly wrote checks for hundreds of dollars to several bars and paid rent to Hanna's landlord and to Hanna himself. A preconference hearing will be held on December 23.
Also this month, the department issued an order to revoke the collection agency license of Lonsdale, Minn.-based First Financial Services Inc., accusing the company of identity theft, forgery, and providing false information to the state. The department alleges First Financial caused a bank to send a $40,000 check payable to two consumers to First Financial. The company had contacted the consumers on numerous occasions attempting to collect on a purported debt, however the department alleges those consumers did not authorize that the company withdraw $40,000 from their bank account or direct the bank to send a the check to the company.
The department further alleges that First Financial directed or participated in the forging of the endorsement of the $40,000 check that was deposited into First Financial's bank account. The company has until December 3 to request a hearing.
"The people involved in these cases had access to sensitive personal information and they used that information for personal gain," says Minnesota Commerce Commissioner Glenn Wilson. "These cases show the department's commitment to protecting consumers by ensuring companies respect the privacy of consumers and act in good faith."
Companies and individuals found guilty of such violations can be subject to a number of civil penalties including revocation, suspension, censure or fines and penalties. In addition, the department may refer such cases to other law enforcement agencies for possible criminal prosecution.