Debt Collector Is Target Of Civil Lawsuits, Federal Probe


Source: site

Mark M. Miller, a Kenmore debt collector, is under investigation by federal Homeland Security Investigations agents for alleged wire fraud in connection with unlawful debt collecting. Agents seized $90,385 from Miller in 2020 while executing a raid at a Kenmore home he owns.

A Kenmore debt collector may have ended up hounding the wrong guy for a debt his mother allegedly owed.

When Nicholas Nazarovech of Ohio asked the collector to stop calling, he said the collector put him on notice that the calls would not stop until he “gave up his mother.”

Nazarovech said he asked if he would have to hire an attorney to stop the harassing phone calls.

The collector shot back, “You can’t even afford a slice of bread,” according to Nazarovech.

But Nazarovech did hire an attorney, and his lawsuit against Mark M. Miller and his workers alleges a boiler room operation where collectors were fired up on illegal drugs and under intense pressure to produce results.

Miller, 48, denies any wrongdoing in his debt collection practices, claiming he has been unfairly targeted by lawyers, prosecutors and federal agents. He said he is getting out of debt collections because of what he considers government harassment.

“Federal agents in Army suits, pointing machine guns, raided my home and my business almost a year ago, last May 7,” Miller told The Buffalo News. “They have not charged me with anything … because my companies follow the law.”

No criminal charges have been filed, but in a court document filed April 1, the U.S. Attorney’s office said Miller’s debt collection companies are under investigation for an alleged “wire fraud scheme related to unlawful debt collection activities involving victims across the United States.”

Federal agents have seized $90,385 from Miller’s companies and $392,495 from Market Street Debt Partners, a Lockport company that processed credit card transactions for Miller’s companies and other debt collectors.

Federal agents are investigating almost $2.8 million in transactions involving five companies run by Miller, Assistant U.S. Attorney Mary Clare Kane said in a document filed at federal court last month.

Suit: Drugs for workers

In the lawsuit against Miller, Nazarovech’s attorney, Jonathan Hilton, has alleged that a supervisor, under the direction of Miller, encouraged debt collectors to get “high” on drugs so that they will collect more aggressively.

The lawsuit also claims that, because Miller often fails to pay his collectors even minimum wage, Miller relies on the lure of free access to illegal drugs to maintain his workforce.

Hilton stated in court papers that Miller was rarely present at the two-floor operation at 1561 Kenmore Ave., but managed to keep a constant eye on the collectors through electronic surveillance.

Miller operated his collection agency “remotely through a series of cameras and microphones located inside the building, which allow him to command subordinates located in the building,” the lawsuit stated.

When contacted by The News for comment about the lawsuit, Miller denied ever giving drugs to his employees and repeatedly called Nazarovech a “registered sex offender.”

Government documents show that Nazarovech, 30, is a registered sex offender in Kentucky, but the sex offense had no connection to his dealings with debt collectors on behalf of his mother.

“It has nothing to do with the merits of the case,” Hilton said. “Frankly it is a tactic that Mark Miller is trying to use as leverage.”

Hilton also represents several others in a separate lawsuit over debt collections that succeeded in winning judgments against Miller for his unfair practices.

But those five individuals have yet to be paid $1,000 apiece and court costs, Hilton said, adding he has asked the judge in that case to impose a penalty of $250 a day on Miller.

Miller confirmed that he did use surveillance cameras to watch and listen to his employees.

“The reason we did that is to make sure the employees are not lying to people,” Miller said. “If we catch them lying, we fire them.”

Miller added: “I can make $50,000 a month doing collections legally. Why would I break the law when I can make that kind of money?”

Miller’s companies listed in the lawsuit include American Recovery Systems and America Elite Recovery.

Feds armed with guns seized cash

In a court document filed April 20 by defense attorney Cheryl Meyers Buth, Miller denied any involvement with wire fraud or illegal debt collection practices. He asked a judge to return to him the $90,385 seized by federal agents.

“This is money I had in shoe boxes in my home. There was nothing illegal about it,” Miller told The News. “They were looking for drugs, but they didn’t find any drugs.

“Federal agents came to my home and pointed machine guns at my 11-year-old son, the mother of my son, and a 70-year-old lady who is a friend of the family,” Miller added. “It was unbelievable.”

Miller said the agents raided four homes associated with him and his Kenmore Avenue business addresses.

“I’m fighting the government to get that money back,” Miller said.

He told The News that he was out of town when the raids were conducted. He said his information about the raid came from his son, his son’s mother and other people who were present.

Three Homeland Security officials reviewed reports on the raid and told The News that agents did nothing improper.

No shots were fired, no one was injured and guns were only carried as a precaution against potential violence, said Kevin Kelly, special agent in charge of the Buffalo office of Homeland Security Investigations.

If agents entered a room and pointed guns at anyone, the guns were only pointed long enough to make sure that no one in the room posed a danger, Kelly said.

“Our tactical agents spend many hours in training,” Kelly said. “The goal is safety … not only for our people but for anyone else present.”

Federal prosecutors said the seizure of $392,495 from Market Street Debt Partners that same day was part of an investigation into claims of “money laundering.”

Herbert Greenman, an attorney for the Lockport firm, said the firm did nothing illegal.

In both cash seizures, the government is seeking civil forfeiture of the money.

Miller cited his forfeiture case and the Lockport case as examples of unfair harassment from the government.

Selling counterfeit Nikes

The debt collection probe is not the first time Miller has come under the scrutiny of federal authorities. In 2009, he was sentenced to 30 months in prison for selling counterfeit Nike sneakers that he purchased in New York City. Miller pleaded guilty to conspiracy to traffic in counterfeit goods, a felony.

U.S. District Judge Richard J. Arcara ordered Miller to pay $62,400 in restitution to Nike and placed him under supervised release for three years after his prison term. Miller was one of 23 defendants prosecuted in the Nike case.

While acknowledging his guilt in that case, Miller told The News: “I sold some counterfeit sneakers. I didn’t kill anybody.”

Miller said he believes federal agents have targeted him because “my father was in the Mafia,” and he thinks agents want to link him to an ongoing investigation into organized crime in Western New York.

Miller declined to identify his father by name. He said that, in his opinion, there no longer is any viable Mafia organization in the Buffalo area.

U.S. Attorney James P. Kennedy declined to comment when asked if the investigation of Miller and any other debt collectors is related to the organized crime probe.

And Miller alleged that some of the claims in Nazarovech’s lawsuit against him came from a disgruntled former employee. Miller said he fired the employee because she illegally used a debtor’s credit card numbers to buy a pizza.

Suit: Miller’s collectors used threats of arrest

Hilton, the Columbus, Ohio, attorney who represents Nazarovech, says he is no stranger to Buffalo area debt collectors, whom he has sued approximately 65 times since 2018.

“Buffalo is the hub for the worst violations of the Fair Debt Collection Practices Act,” Hilton said of the federal law that makes it illegal to be abusive and deceptive in debt collection.

In Nazarovech’s lawsuit, Hilton lays out how Miller’s Kenmore Avenue operation allegedly functioned:

“This building has two floors. On the first floor, approximately 13 collectors … collect upon what is known in the debt collection industry as ‘bad paper’ – that is, paper that has already been collected upon by other collectors.”

The lawsuit also alleges Miller’s companies maintained a “warrant division” that “threatens consumers with arrest if they do not pay on debts that those same consumers have already paid.”

Referring to “the Miller Conspiracy” in court papers, Hilton alleged that collectors “will also triple or even quadruple the amount of the debt supposedly owed, a practice known in the industry as ‘overbiffing.’ ”

Such practices, Hilton stated, generated a monthly revenue ranging from $80,000 to $100,000.

Nazarovech said he does not know if his 75-year-old mother ever legitimately owed a debt, but he said Miller’s collectors had no business calling and harassing him.

The calls were so numerous that he ended up losing his retail job because his phone was ringing all the time. When asked why he did not turn off his phone, Nazarovech said he needed to keep it on for work-related calls.

According to his lawsuit, he is seeking several thousand dollars in damages.