BUFFALO, N.Y. (WIVB) – A Buffalo man has pleaded guilty to running a fraudulent debt collection scheme.
Shawn Sylvia, 35, of Buffalo, pleaded guilty to conspiracy to commit wire fraud in U.S. District Court.
According to the assistant U.S. attorney handling the case, Sylvia organized a scheme to collect on non-existent debts and over-collect on debts that had been paid-in-full.
Sylvia or people he managed contacted eight victims via phone pretending to be from organizations including American Mutual Holdings (AMH); Check Systems, LLC; Interstate Recovery Solutions; Apex Resolution Group; Interstate Check Registry; Miller and Flemming and Associates (MFA); Pasquale and Associates LLC; Checking Solutions; or Aries Resolution Group.
He and the people he managed used “strong arm tactics” including threats of arrest, jail, and lawsuits to convince victims to make payments toward what they were told were outstanding debts.
Victims were directed to transfer money via MoneyGram and Western Union and to wire funds into bank accounts controlled by the defendant or his associates. Merchant accounts were established with two merchant processing companies in order to process credit card payments made by victims.
By creating those merchant accounts, Sylvia and others made false representations to the payment processing companies claiming that the business entities they operated were engaging in legal services, investment services, and software sales. The payment processing companies suffered losses as a result of chargebacks of payments as a result of unauthorized and fraudulent charges.
Between May 2013 and Aug.2017, Sylvia and his associates fraudulently obtained a total of $342,303.
Sylvia faces a maximum of 20 years in prison and a $250,000 fine when he is sentenced April 3.