FOR IMMEDIATE RELEASE
Sacramento, CA – 2 July 2019 – The owner of a collection agency hired by several credit unions in the Sacramento and Bakersfield, California areas, has been sentenced to 6 years in prison for his orchestrating and profiting from fraudulent transactions against his clients to the estimate of $4M in damage.
Charles V. Stanley Jr., 65, of Agua Dulce, was sentenced today by U.S. District Judge John A. Mendez to six years in prison for conspiring to commit bank fraud and wire fraud, U.S. Attorney McGregor W. Scott announced.
According to court documents, Stanley was the owner and operator of Creditor Specialty Service Inc. (CSS), a debt collection company that operated in California, Oregon, and Nevada. Various companies contracted with CSS to collect debts, including credit unions based in Folsom, Sacramento, and Bakersfield.
At Stanley’s direction, CSS employees collected money from debtors but underreported to creditors the amounts CSS actually collected.
During the scheme, Stanley caused CSS to file lawsuits or settle with debtors without client authorization. After one credit union terminated its contract with Stanley, he continued to demand and collect money from its debtors, and persisted in this fraudulent conduct even after a court ordered Stanley to cease collecting from the credit union’s debtors.
Evidence was presented at sentencing that Stanley’s business maintained three sets of books and that Stanley used about $839,608 of the collected funds for his own personal spending. He also used funds to pay other clients to whom CSS owed money and to cover CSS’s operating costs. Stanley’s conspiracies and schemes caused clients and debtors to lose over $4 million.
The company filed for bankruptcy in 2016; individuals, businesses and organizations had made more than $20 million in monetary claims against them, the Credit Union Times reported in 2018.
Stanley was out on bail following his arrest but was placed back into custody Feb. 14, 2018, after it was determined he may have committed additional crimes while on release, according to court documents. He pleaded guilty while in custody, court documents said.
This case was the product of an investigation by the FBI and the IRS Criminal Investigation. Assistant U.S. Attorney Matthew Segal prosecuted the case.
Department of Justice
U.S. Attorney’s Office
Eastern District of California
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