By Matt Chandler
Buffalo Law Journal

The collections crackdown continued this week as New York Attorney General Andrew Cuomo announced Tuesday that his office has filed a lawsuit against a Buffalo-based agency.

Investigators said city residents Omar Smith, Narvell Benning and Keith Marshall collectively ran 13 debt-collection companies under the banner of the Benning Smith Group. The attorney general's office received more than 850 complaints, Cuomo said, from consumers who said they faced physical and sexual threats and intimidation in the company's attempts to collect debts that, in many cases, the victims did not owe.

The lawsuit, filed Tuesday morning in state Supreme Court, seeks to shut down all 13 businesses operating under The Benning Smith Group. The charges against the company appear to be more severe than those against companies previously cited in the AG's ongoing investigation into credit collection agencies.

"This company made lies, threats and abuse their calling cards in their efforts to manipulate and take advantage of consumers already facing tough economic times," Cuomo said. "They did everything they could to demean and humiliate their targets, stooping so low as to sexually harass and verbally abuse individuals nationwide."

Cuomo says Benning Smith's actions violated state and federal laws through actions such as posing as law-enforcement officials and threatening to jail consumers who didn't pay their debt immediately.

The press release cited more than 1,000 instances where the AG's office has found evidence that Benning Smith has breached state and federal statues.

Cuomo's investigation determined that collectors regularly demanded payment for non-existent debts or substantially inflated the amount owed on an actual debt. Posing as law-enforcement officials, collectors allegedly used intimidation and harassment to coerce consumers into agreeing to make payments. Fearful of facing arrest and public humiliation, many consumers authorized withdrawals from their checking accounts or sent money orders to the resolve the debts.

In one instance, the AG's office reports, a Benning-Smith collector uttered the name of a consumer's daughter, describing sexual acts he would subject her to unless the debt was paid. Another collector told a female consumer that he would pay a debt himself if she and her husband performed sexual acts with him.

The collection companies that the trio ran operated under the following names: Abrams Burke & Associates; Benning and Smith Acquisitions Inc.; Brady and Caruso LLC; DebtPayments.com; Fredericks Goldstein & Zoe; Graham Noble & Associates Bookkeeping; Graham Noble & Associates LLC; Graham Beagle & Associates LLC; Kingman Cole and Associates LCC; Marshall and Ziolkowski Enterprise LLC; Marshall Ziolkowski Acquisitions LLC; Lansky Goldstein Zoe; OLS Payment Services; and University Debt Collection.

The telephone number for Benning and Smith Acquisitions Inc. was out of service Tuesday, and a phone message left at the offices of Abrams Burke & Associates seeking comment was not returned.

Tuesday's action is part of a larger investigation by Cuomo's office looking into unlawful debt-collection practices. In June, Cuomo obtained a court order shutting down the fraudulent activities of another Buffalo-based collections operation and initiated criminal charges against the owner of that operation. His office previously shut down two other collectors for threatening and intimidating consumers into paying debts that they did not owe.