| NEW YORK, April 8
NEW YORK, April 8 A debt settlement company and
its operator on Tuesday pleaded guilty in New York to conspiracy
charges of mail and wire fraud, capping the first criminal case
referred to U.S. prosecutors by the Consumer Financial
Michael Levitis and his company, Mission Settlement Agency,
entered the guilty pleas in Manhattan federal court, less than a
year after prosecutors announced charges over a scheme that they
said victimized more than 1,200 people across the country from
2009 to 2013.
At the time, the office of Manhattan U.S. Attorney Preet
Bharara called it the first criminal referral from the CFPB, an
agency created as part of the Dodd-Frank Wall Street Reform and
Consumer Protection Act in 2010.
Prosecutors accused Mission of touting its ability to help
customers reduce their credit card and other debt. Instead, the
company charged excessive fees while failing to aid its clients.
"I'm here to take responsibility for my actions," said
Levitis, 37, before U.S. District Judge Paul Gardephe. "I took
advantage of people who were struggling financially and caused
them further hardship."
His mother, Eva Levitis, who was Mission Settlement's
president, entered a guilty plea on behalf of the company. She
was not criminally charged.
Michael Levitis and Mission Settlement both agreed to
forfeit $2.2 million as part of the plea agreement. Levitis
faces up to 10 years in prison, while the company faces an
additional fine of up to $4.39 million.
Four other former Mission employees previously have pleaded
guilty; charges against a fifth remain pending.
Levitis, a suspended lawyer, was previously sentenced in
August 2011 to three years of probation and fined $15,000 for
lying to federal agents during an investigation into former New
York State Senator Carl Kruger, who pleaded guilty to corruption
charges in 2011.
Charles Ross, a lawyer for Levitis, told Gardephe on Tuesday
that the CFPB has indicated it plans to dismiss a parallel civil
lawsuit against Levitis and Mission in light of the forfeiture
agreement with prosecutors.
Samuel Gilford, a spokesman for the CFPB, declined to
comment on the status of the agency's case. He also declined to
disclose how many other cases the agency had referred to federal
"The CFPB takes its statutory obligation to refer criminal
conduct seriously, and we do it in appropriate circumstances,"
Levitis pleaded guilty to one count of conspiracy to commit
mail and wire fraud and one count of conspiracy to commit wire
fraud. His maximum prison sentence is five years on each count.
Mission pleaded guilty to a single count of conspiracy to
commit mail and wire fraud.
"Michael Levitis and his company, Mission Settlement Agency,
preyed on the desperation of financially struggling people
across the country," Bharara said in a statement following the
The case is U.S. v. Mission Settlement Agency, U.S. District
Court, Southern District of New York, No. 13-cr-j00327.
(Reporting by Nate Raymond in New York; Editing by Tom Brown)