by Diane Kelly
Something was definitely wrong with me, huh?
Nick riffled through a file that had been mine mere days ago. The file contained documentation relating to an international debt collection fraud case that had made its way into the hands of the IRS in a roundabout way. Over the past two years, the Consumer Protection Division of the Texas attorney general’s office had received a multitude of complaints against United National Debt Recovery. The collection agency had contacted thousands of Texas residents, demanding payments on loans the collection agency insisted were past due. The debtors, however, disputed the delinquencies.
Many of the victims had previously obtained small, unsecured loans from EZ Funz, an online lender headquartered in McKinney, a small city located a few miles north of Dallas. These particular complainants insisted they’d fully repaid the loans they’d received from EZ Funz. When the assistant state attorney general contacted EZ Funz, the loan company’s owner corroborated his customers’ claims. All of the victims had long since repaid their loans in full. No money was due.
Despite the fact that the people owed nothing further on the debts, United National’s staff continued to relentlessly pursue them. The firm reported the debts as delinquent on the victims’ credit reports, thus violating the Fair Credit Reporting Act and lowering the victims’ credit scores. The collection agency’s representatives phoned victims at all hours of the day and night, in direct violation of the both the Texas Debt Collection Act and the federal Fair Debt Collection Practices Act, which allowed calls only between 8:00 AM and 9:00 PM local time. United National also phoned the victims’ neighbors and relatives, alleging the victims had failed to repay their loans, disparaging the victims’ reputations and causing them untold embarrassment. According to the victims, each of the callers had a distinct Indian accent.
The collection agency sent letters to the victims’ employers, threatened to file theft and fraud charges against the victims themselves, and threatened to seize the victims’ property even though such seizures violated state law. Texas had been settled largely by deadbeats fleeing creditors in the Northeast and, as a result, the state property code contained fairly liberal exemptions to protect debtors from pauperism. United National had no court judgments against the victims and, even if it had, it couldn’t seize assets that did not secure the loan and were legally exempt. Making such false statements was another violation of the Fair Debt Collection Practices Act.
The amounts alleged to be in arrears were relatively small, most in the one- to two-hundred-dollar range. Though the debtors had proof they’d paid their loans on time and in full, United National refused to back off. To the victims, a couple hundred dollars seemed like a small price to pay to stop to the harassment and buy some peace.
The assistant AG had completed a preliminary investigation, determining that the collection agency had failed to post the required ten-thousand-dollar bond with the Texas secretary of state and that Darshan Sundaram, the man who had filed the assumed name certificate for United National, held no Texas driver’s license or identification card, owned no real estate in Texas, and appeared to be untraceable. The business address listed for United National was a fictitious address that didn’t actually exist. Sundaram and United National were operating out of the shadows.
Each of the victims had been instructed to make their payments directly to specified accounts at local banks. The AG’s office contacted the banks and closed the accounts, though in each instance the vast majority of the funds had already been transferred out of the accounts to another bank in India. As new information poured in, the AG repeatedly closed accounts, but Sundaram maintained a number of accounts at different banks and when one was closed he’d simply use another. Typical MO for this type of crime. Some of the accounts were in neither Sundaram’s name nor that of United National but were in the names of other Indian citizens and collection companies, indicating Sundaram was merely the tip of the iceberg in a much larger scam.
None of the addresses the collection agencies provided to the banks were legitimate. Unless a victim who’d made payment to a particular account reported it, it was impossible to tell how many of the accounts remained open. It was also impossible to tell how many bogus collection agencies and people were involved.
In addition to closing the bank accounts, the AG also terminated the local phone numbers used by the collection agencies. Like the bank accounts, though, it was primarily an exercise in futility. The government would terminate one telephone account only to have someone open another immediately thereafter. Still, it kept Sundaram and his cohorts on the run. When the crooks tired of the game of cat and mouse, the collection agency began using Internet calling services based in India. The Texas AG’s office had no authority to order a foreign phone company to shut down its services to a particular customer. What’s more, without knowing all the names of the people and collection agencies involved it was impossible to completely close the illegal enterprise down. The best law enforcement could do was chase after the bad guys and put out small fires.
When the state AG’s office learned that Sundaram and his cohorts had operated similar scams in other states, too, it booted the case up to the Federal Trade Commission, which had nationwide authority. Unfortunately, the FTC had more easily catchable fish to fry. They’d put some effort into locating Sundaram and the others in his crime ring, but they had no better luck than the state AG’s office. Given that the funds had been transferred to Indian bank accounts, the FTC speculated that the operation was now being primarily run from abroad. Trying to enforce U.S. law against an outfit operating overseas would be next to impossible.
When the FTC hadn’t been able to make progress, the case had been punted over to the IRS as a potential tax evasion case. It was no big surprise when I’d searched the tax filings and found no tax return had been filed by Sundaram or United National Debt Recovery. In addition to the individuals they’d victimized, they’d also defrauded Uncle Sam.
As I headed up the on-ramp for Central Expressway, Nick found the address for EZ Funz, plugged it into his phone’s GPS app, and gave me turn-by-turn instructions.
When we reached the red dot on the screen, we found ourselves in a small business park. The building was two-story white stucco with a minimum of landscaping, a low-rent venue for businesses with no need to impress clients, nothing like the quaint nearby square in old downtown McKinney.
Nick and I stepped inside the double glass doors and consulted the building directory. The sign indicated our destination, suite 103, was to our left.
The glass door to suite 103 was locked, though we could see a young Hispanic woman with a headset sitting at a desk inside the space. A quartet of cubicles sat behind her, followed by an open door that led into an office.
Nick whipped out his badge and held it up as he rapped on the glass. “We’re from the IRS!” he called loudly. “We need to see Mr. Bower!”
The girl came to the door, turned the knob, and let us in. “Wait here, please. I’ll get Mr. Bower for you.”
There were no chairs, so we remained standing while the girl stepped to the back office. She returned with a graying sixtyish man in navy pants and a green sweater covered in small fabric pills.
“You’re with the IRS?” the man asked.
Nick nodded and held out his hand. “Senior Special Agent Nick Pratt.” He then introduced me. “My associate, Tara Holloway.”
There was that word again. “Associate.” A vague moniker, but it sounded far more professional than introducing me as his orgasm provider.
“Come back to my office,” Bower said, indicating the way with a tilt of his head.
We followed him past the cubicles, where two young women and two young men sat processing loan applications and payments.
Bower’s office was spare and tidy. He had a large, cheap desk with a desktop computer and multiline phone resting on it.
He gestured to a couple of vinyl chairs and Nick and I each took a seat.
“I know you’ve already spoken with the AG’s office and the FTC,” Nick said, “but I’d like to get the rundown again. Sometimes one agent picks up on something another didn’t.”
Bower lifted his chin in acknowledgment. “Okay. So here’s how we operate. At EZ Funz we do all of our loans online. The maximum loan is a thousand dollars and we require a short payback period, one to six months depending on the circumstances. Most of our clients have decent credit but low-to-moderate incomes.”
The company filled a critical niche, making short-term loans to people who found themselves in a temporary financial bind. Bower noted that he’d spent decades in banking, first as a personal loan officer and later in commercial lending. After the financial crisis, he’d been let go by the bank as they consolidated their branches and cut back on staff. Given his extensive experience in the loan market, he decided to start his own company.
“I was approached a while back by a representative of United National Debt Recovery. An Indian guy. He wanted to buy our client list and contact information for the purported purpose of offering larger, secured loans for cars, appliances, that type of thing.”
“Sounds reasonable.” Nick shifted in the uncomfortable chair and leaned forward. “When this deal was being worked out, what type of research did you do into United National?”
A cloud passed over Bower’s face as he lifted a shoulder. “None. I had no reason to suspect the guy was some kind of con artist.” He crossed his arms over his chest, a clearly defensive gesture. “It’s not my fault if the guy used the information for improper purposes.”
Nick raised a palm to let Bower know we weren’t here to nail him, we just wanted information that might help the IRS nail the assholes who were ripping people off. “We’re just trying to find the people who are running this thing. That’s all.”
Several days ago, before I’d been terminated, I’d tried the callback number the collection agency had provided to some of the victims. I’d reached a call center in India. The staff at the call center refused to disclose who they worked for. Heck, maybe they didn’t even know. One had gone so far as to tell me that she didn’t get a paper paycheck or direct deposit of her earnings but was paid in cash. One hundred and twenty-five rupees per hour.
Bower threw up his hands. “I’m as upset about the situation as you are. Probably more so. I’m running a legitimate business here. Whoever has done this has ruined the name of EZ Funz. We get four or five calls a day from previous clients who have been contacted by that damn collection agency and are ready to tear us a new one. My employees spend lots of time dealing with upset clients and gathering up information to show their loans were paid off. I can’t even begin to tell you how many complaints I’ve dealt with through the Better Business Bureau, too. Our rating has gone down from an A to a C minus as a result of all the reports. Business is down forty percent, too.”
Bower, too, had become a victim.
“Do you have a copy of the information you sold to United National?” I asked.
“I can get it for you,” Bower said. “It’s basically a list of every client through July seventeenth of last year.”
He summoned his receptionist and asked her to download the data to a thumb drive.
“How did Sundaram pay for the data he purchased from you?” Nick asked.
“Wire transfer.”
“What was he like?” I asked, more out of personal curiosity than any sense the information would help us locate the man.
Bower lifted the shoulder again. “He seemed like a nice guy. I even took him to lunch at Rick’s Chophouse after we negotiated the deal.”
“Who paid for lunch?” Nick asked.
“I did. He ate like he was starved. He said he’d stayed at a bed-and-breakfast and that he’d overslept and missed the breakfast.”
Nick and I exchanged glances. Knowing where Sundaram stayed when he was in town could help us track him down. Then again, it could be a dead end. If the guy was smart, he’d stay at different hotels so he’d be harder to trace. Still, neither the AG’s office nor the FTC had pursued this angle.
Nick turned back to Bower. “Did he say which bed-and-breakfast?”
There were several situated throughout McKinney’s Historic District.
Bower looked down in thought for a moment before turning back to us. “I don’t think he said. If he did, I don’t remember.”
It wasn’t much, but at least we had a new lead now.
chapter ten
Who’s the Fairest of Them All?
We thanked the man and headed out to my car. I handed Nick the keys. He drove while I searched the Internet on my phone, finding a half-dozen bed-and-breakfasts in McKinney. I directed Nick to the one nearest our current location.
The first B and B was gorgeous, an enormous three-story gray Victorian with burgundy trim, a wraparound porch and balcony, and a cupola on the third floor. We pulled into the gravel lot and parked.
The porch creaked as we stepped onto it. A hand-lettered calligraphy sign in the front window read: “Come on in.” So, we went on in.
We found the proprietors, a fiftyish couple, in the home’s front parlor. The woman lay sprawled on a velvet-covered fainting couch reading a racy romance novel with a bare-chested man on the cover. Her husband stood on a stepstool nearby, replacing bulbs in a Tiffany light fixture. Unlike the fictional hero on the book, he was fully dressed.
“We’re from the IRS,” Nick said, flashing his badge. “We need to find out if a certain person stayed here on or around July sixteenth of this year.”
The woman lifted a finger, not taking her eyes off the page. “Gimme a second. They’re almost done screwing.”
I glanced around while Nick and I waited for the characters to climax. A tall, wide bookshelf behind the fainting couch was loaded with books at least two layers deep. Romances. Mysteries. Thrillers. A few classics sprinkled here and there among them in no particular order. A small orange tabby had curled up for a nap in the gap between Pride and Prejudice and what appeared to be an erotic tome titled Every Inch of You.
The woman finished the scene, sighed, and closed the book, depositing it on an antique table next to her chair. “All right. Let’s check those records.”
She led us to a small desk, where she sat down and logged in to a laptop computer. She punched a few keys to pull up the information. “We had a couple of guests around that date,” she noted. She rattled off their names. “Morton. Schuster. Vreeland.” None of them sounded remotely Indian.
“No Indian man?” Nick asked.
The woman shook her head. “It doesn’t appear so.”
“How did the guests pay for their stay?” I asked. There could be a chance Sundaram had provided a false name and passed himself off as an ethnicity other than Indian. After all, actors did it all the time. They even had a term for it. “Racebending.” Though he wasn’t African-American, Fred Armisen did a great Obama impression on Saturday Night Live. Rashida Jones, who was the daughter of a white mother and black musician Quincy Jones, played an Italian-American woman on The Office. Sacha Baron Cohen played a variety of repulsive European assholes, though in retrospect they were all white repulsive assholes, so maybe that didn’t prove my point.
The woman checked her records. “All of the guests around that date paid with credit cards.”
Hm-m. If Sundaram had used a false name, I might’ve expected him to pay with traveler’s checks or in cash. Then again, he could have used a stolen credit card or a counterfeit one.
“Any problems with the credit cards?” I asked. “Identity theft? Fraud?”
“No. No problems.”
We thanked the woman for the information and continued on our rounds. Unfortunately, we had no better luck at the next two B and Bs.
It was after five o’clock and dusk settled in. The streetlights flickered on as we drove to the fourth bed-and-breakfast. The place was a sunny yellow one-story with white gingerbread trim and scalloped shingles on the gables. Cute.
Quaint. Homey.
The sign out front read: “The House of the Seven Fables—Bed, Breakfast, and Boarding.” An orange pumpkin-shaped horse-drawn carriage stood in the yard to the right of the center walkway, as if waiting for its horse and driver to take Cinderella to the ball. Centered in the left half of the front yard was a black iron gas lamp on an eight-foot post. Given that the lamp contained an electric lightbulb rather than a gas outlet, it couldn’t be an original. Nonetheless, it added to the old-fashioned look of the place.
As we watched, a blond woman in a puffy baby-blue dress opened the door, stepped out onto the porch, and crouched to plug an extension cord into an outlet on the wall next to the front door. Bling! The house exploded in so many lights it appeared to be on fire.
Nick gave a whistle. “Holy moly. Did Clark Griswold decorate this place?”
I blinked in a desperate attempt to focus. My retinas felt fried.
When I could finally see clearly again, I noted that the house was completely outlined in large red lights, including the four dormer windows adorning the roof. Icicle lights hung from every eave. Multicolored strands were wrapped around the porch rail, while the bushes sported solid blue. The black iron lamppost in the front yard served as the central support beam for a dozen strands of green lights that angled out from the top, forming a conical Christmas tree of lights. I could only imagine what the owner’s electric bill would look like.
Blinking against the brilliance, we stepped onto the porch, pulled open the screen door, and rapped on the front door. Our knock was answered by the woman who’d been on the porch a moment before.
Whoa. She could be Cinderella’s doppelganger.
The woman’s teased blond hair was topped with a rhinestone-studded tiara. Along with the puffy blue dress she wore a sparkling necklace, long white gloves, and Lucite heels, probably the closest thing she could find to glass slippers. A drooling, droopy-eyed basset hound with a big red bow around her neck shuffled past the woman and onto the porch, sniffing my loafers and Nick’s boots, leaving a smear of saliva across Nick’s left toe.