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Federal Court Halts Operation, Freezes Assets in Calling Scheme

By Josh Long
April 13, 2012 - News

A federal court in California has put a stop to a fraudulent calling operation that unlawfully collected more than $5.2 million from consumers in less than two years, the Federal Trade Commission announced this week.

In a scheme asking for loan debts, California-based Kirit Patel and two companies he controls were involved in making more than 2.7 million calls to at least 600,000 different phone numbers across the U.S., according to the FTC.

"The court order temporarily stops the illegal conduct and freezes the operation's assets while the FTC moves ahead with the court proceedings and seeks refunds for consumers," the agency said.

The government alleges that callers from India who were collaborating with the defendants often posed as American law enforcement agents and harassed consumers, frequently demanding several hundred dollars while using coarse language. One consumer, court documents allege, reported that a caller threatened to take away her kids if she did not pay.

The case is another lawsuit concerning exploitation of the down-and-out. According to the FTC, the defendants gained access to private information that consumers had submitted to obtain short-term, high-interest payday loans. The victims often believed they owed the defendants money because the callers had such information as their social-security or bank-account numbers, the agency alleged. In at least some cases, consumers reportedly suffered immensely in the fraud.

"Two mothers reported that they could not buy Christmas presents for their families after making payments on the phony debts," the FTC asserted.

The case is Federal Trade Commission v. Broadway Global Master Inc., In-Arabia Solutions Inc. and Kirit Patel.

Click here to read the court's temporary restraining order, which expires on April 18. The Defendants must appear before the U.S. District Court, Eastern District of California on April 18 at 9:30 a.m. to show cause why the court shouldn't enter a preliminary injunction pending a final ruling in the case.

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