CFPB files legal action against the former head of a debt collection company and his family for allegedly seeking to fraudulently transfer assets in order to undermine a prior consent decree – Finance and Banking
United States: CFPB takes legal action against the former head of a debt collection company and his family for allegedly seeking to fraudulently transfer assets in order to undermine a prior consent decree
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Recently, the CFPB and the New York Attorney General filed a Complaint against Douglas MacKinnon and members of his immediate family to unravel the alleged fraudulent transfer of MacKinnon’s $ 1.6 million home, made shortly after learning that his business practices were under CFPB investigations and from NYAG.
This complaint follows a 2019 consent decree, in which MacKinnon was one of three defendants who had rendered a final judgment stipulated with the CFPB and NYAG. In this action, the CFPB and NYAG accused McKinnon and others of buying millions of dollars in consumer debt at a fraction of its value, then inflating debt and using illegal tactics. – including, posing as law enforcement officers, government agencies, and court officials – to extract as much money as possible from consumers. The stipulated order settling this action required MacKinnon and his co-defendants to pay $ 60 million to $ 40 million in consumer redress, as well as a fine of $ 10 million to the CFPB and $ 10 million to NYAG. However, the consent decree suspended the payment of these amounts in exchange for $ 10,000 in recourse to consumers and $ 1 to the CFPB.
The recently filed lawsuit alleges that MacKinnon transferred ownership of his home to his wife and daughter in 2015 in exchange for just $ 1 shortly after learning about federal and state investigations into his debt collection companies. Shortly thereafter, the lawsuit alleges that MacKinnon’s wife granted MacKinnon’s brother a mortgage of $ 900,000 in order to make it appear that the property was encumbered and not available to pay MacKinnon’s creditors. In the complaint, the CFPB and the NYAG ask the court to declare the transfer and subsequent mortgage void and to order the sale of the property in order to satisfy, at least partially, MacKinnon’s unpaid debt to the federal and state governments. . CFPB reports that MacKinnon has not made any payment to satisfy the judgment against him since the 2019 consent decree, and alleges that neither he nor his family members have cooperated in efforts to obtain relevant financial information .
The CFPB issued a Press release after filing the complaint in which CFPB Acting Director Dave Uejio strongly condemned MacKinnon’s actions and signaled that the CFPB intended the complaint to serve as a warning to other fraudsters. Mr Uejio said that “Douglas MacKinnon carried out a brazen scheme, fraudulently inflating consumer debts, and he was also brazen in trying to fraudulently conceal his own assets.” He went on to note that the complaint “shows that attempts to defraud the federal government and evade the consequences of breaking the law will not succeed.” The press release also included NYAG Letitia James’ comment that she viewed MacKinnon’s conduct as “utter disregard for the government’s authority to bring law breakers to justice.” She also noted that “[n]ot a dime was paid to put money back in the pockets of New York consumers. “
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