Clarence debt collector who owes $60M told to show finances or expect to be jailed
Here’s a perfect example of the distraction the government uses to try and justify that it’s stopping predatory lending and rogue debt collectors.
The truth is the opposite, they are still allowing the theft of homes from citizens over a decade after the 2008 Financial Crisis and the banks responsible are still receiving cash windfalls from insurers and secret payments from the Government for their greed and theft.
No banksters went to jail but millions of citizens lost their homes and along with it, their hope for any type of justice and meaningful relief in the corrupt court system.
It is the largest theft in history by the United States against its own people.
DEC 23, 2021 | REPUBLISHED BY LINY : DEC 24, 2021
A federal judge told a former debt collector who owes millions of dollars in restitution and civil penalties to furnish information about his finances by Jan. 6 – or expect jail.
Douglas MacKinnon has not paid anything toward the $60 million he agreed to pay in a settlement with federal and state officials in 2019, government lawyers say. So in May 2020, the federal Consumer Financial Protection Bureau and state Attorney General’s Office told him to provide an exhaustive accounting of his finances.
In their filing, government lawyers said they believe Douglas MacKinnon “has transferred and concealed his assets and stonewalled discovery efforts to avoid collection efforts.”
More than a year and half later, MacKinnon still hasn’t turned over any information, despite benefiting from multiple deadline extensions, prosecutors said.
“He has no respect for this court or the court’s orders,” state Assistant Attorney General Christopher Boyd told U.S. District Judge Frank P. Geraci Jr. during a court hearing last week.
Attorney Joseph G. Makowski, who represents MacKinnon, said he has sought more time to comply with the agency’s demands so he could submit comprehensive information – rather than “a piecemeal response” just to make a deadline.
Two men described as “kingpins” of debt-collection operations in the Buffalo region have had their businesses shut down and were ordered to pay $66 million under a settlement revealed Thursday. Douglas MacKinnon and his companies Northern Resolution Group and Enhanced Acquisitions, along with Mark Gray and his company Delray Capital, also have been banned from working in the debt-collection
Makowski said the information would be forthcoming before the next hearing on Jan. 7.
“We are working on it,” Makowski told the judge.
“If it’s not done, I suggest Mr. MacKinnon bring a tooth brush with him” to the next hearing, Geraci said.
MacKinnon did not show up at the hearing Dec. 16.
“He might be going to jail. He should be here,” Geraci said.
“Buffalo is ground zero for debt collection companies that routinely violate state and federal debt collection laws,” Assistant Attorney General James M. Morrissey
The judge told Makowski to make sure MacKinnon appears in person at the next hearing and that the financial information is turned over to the government lawyers by Jan. 6.
Makowski has previously identified MacKinnon as a potential target of a criminal investigation, so he needed time to run the information past criminal counsel and explore Fifth Amendment and spousal privilege issues, he said.
Lawyers for the government have asked for MacKinnon to be incarcerated if he doesn’t provide the information, saying a fine for contempt would not mean much to someone with an unpaid $60 million debt.
In 2016, the state and federal governments sued MacKinnon and his companies Northern Resolution Group and Enhanced Acquisitions, accusing them of harassing, threatening and deceiving millions of consumers across the nation into paying inflated debts or amounts they did not owe. The collection tactics included using “spoofed” phone numbers to pretend to be calling from a court or government agency, and the collectors also sent threatening messages to consumers to frighten them into paying, according to the lawsuit. MacKinnon and his companies were permanently banned from the debt collection industry.
When State Attorney General Letitia James announced the $60 million settlement in 2019, she referred to MacKinnon as a “kingpin” of Buffalo debt collectors.
+3Meet some Buffalo debt collectors accused of unlawful practices
Meet some Buffalo debt collectors accused of unlawful practices
Here are snapshots of some cases against debt collectors that the State Attorney General’s Office, Federal Trade Commission and other law enforcement agencies have pursued in the past decade.
Of the $60 million MacKinnon agreed to pay, $40 million would be set aside to pay restitution to consumers, and $20 million would be set aside for civil penalties to state and federal governments.
Reacting to his failure to pay, the state and federal agencies are seeking his bank statements, credit card bills, income tax returns, deeds, mortgages, promissory notes, and documents reflecting any trusts, stocks, properties, estate planning and asset transfers to his family members, among other records.
Government lawyers say MacKinnon has a history of using his family members and friends as straw persons to hold and transfer assets on his behalf, so they also issued subpoenas seeking financial information to his wife, Amy MacKinnon; three children, Mary Kate MacKinnon, Connor MacKinnon and Ryan MacKinnon; and a brother, Matthew MacKinnon.
Amy MacKinnon and Mary-Kate MacKinnon responded to their subpoenas, and while the government sees deficiencies in their responses, both are in compliance with the court order to respond, Boyd said.
Matthew MacKinnon “is making a good-faith effort” to respond, so government lawyers are not seeking sanctions against him, Boyd said.
As of last Thursday’s hearing, Douglas MacKinnon had provided no responses, nor have his sons Connor and Ryan or two affiliated businesses, CMAC Properties LLC and RMFSG LLC, Boyd said.
The State Attorney General’s Office has sought sanctions against Douglas MacKinnon since February.
In court papers seeking a civil contempt charge and sanctions against Douglas MacKinnon, Boyd bristled at the reasons he heard from Makowski over the missed deadlines.
“It appears that Mr. Makowski is feigning an inability to read simple communications regarding extensions and deadlines in order to engage in gamesmanship and stonewall efforts to take discovery,” Boyd said.
At last week’s hearing, Boyd called Makowski’s explanations “just more excuses.”
In a scolding court decision in September, Magistrate Judge H. Kenneth Schroeder Jr. said, “There is no doubt that Douglas MacKinnon failed to comply with the clear and unambiguous order of the court to produce documents and answer interrogatories.”
Schroeder, who handled the state’s request for sanctions, said Makowski’s “declared confusion” over a Nov. 20, 2021, order that granted him the exact deadline extension he requested “is absurd.”
“It is also part of a contemptible pattern of dilatory tactics that will no longer be countenanced,” Schroeder said in his ruling.
It took Schroeder over nine months to respond to the government agencies’ request, which Makowski said demonstrated that his legal arguments on behalf of MacKinnon “were meritorious and warranted a detailed judicial response.”
The breadth and depth of the government agencies’ discovery demands have “proved to be cumbersome,” Makowski said in court papers.
Also, many of the documents needed to respond to the government agencies are not in MacKinnon’s possession but instead were contained in the computers previously seized by government officials and remain in their possession or control, Makowski said.
Makowski told Geraci that he has cleared his professional schedule for the remainder of the month to complete and provide the responses to the government.
In a ruling on a separate legal case, Geraci in October denied MacKinnon’s motion to dismiss a lawsuit the governmental agencies filed to seize the six-bedroom, seven-bathroom home in Clarence where they say he lives.
The government sees seizing the $1.6 million home on the 3.6-acre lot as a way to recover part of what he owes. But in April 2015, before his settlement with government agencies over his debt-collection practices, MacKinnon transferred ownership of the home to his wife and daughter.
The government says he transferred the home to them after learning of the investigation into his companies, according to the federal lawsuit.
In a court filing, Douglas MacKinnon said that in the spring of 2015, six of his 10 children were minors and living in the family home.
“As such, my wife and I were concerned about what would happen to our children if both of us were to die,” he said in the filing, seeking to block the seizure.
So for estate planning purposes, he transferred his interest in the home to his wife and adult daughter, he said, so that “if anything happened to me and Amy, the premises would pass to our daughter, who would assume responsibility for raising our minor children in the home.”
Prosecutors called his explanation “implausible and nonsensical.”
MacKinnon offered no explanation why he could not simply add his daughter as a third owner, allowing her to keep the home if both parents died, or prepare a will, “like most people who want to bequeath real estate to their children,” Boyd said in court papers.