New charges for man with a history of fraud
He is accused of extorting millions from writers of bad checks
Friday, May 16, 2003
BY JOHN P. MARTIN
Star-Ledger Staff
Barry Sussman spent much of the 1980s honing his knowledge of the credit card industry and his skills at ripping it off.
During one prison stint for credit fraud, the Fort Lee resident wrote a 103-page how-to manual called "I Scam-You Scam" and distributed it to inmates. After skipping out on his probation and being declared a fugitive, Sussman sent his sentencing judge a photo of him atop a camel near the Egyptian pyramids.
Sussman, 42, has a wife, two kids and a law degree now, but authorities say he's not a changed man. Yesterday, state and federal regulators accused him of running a Secaucus-based collection agency that abused, harassed and extorted millions of dollars from people who allegedly passed bad checks.
Joe Hall, a plumber in Winter Haven, Fla., told investigators that a Sussman company collector phoned him 17 times in a 10 minutes one afternoon last fall, called Hall's mother "a racist (expletive)" and Hall a "(expletive) criminal" who was "worse than the Taliban."
The collector claimed Hall wrote a $62 check to Pet World that bounced. Hall said he didn't.
Stephanie Stephenson of Brewster, N.Y., said Sussman's collectors hounded her for $169 three years after she bought a $39 necklace by check from the Home Shopping Network. Stephenson said she had returned the necklace after it arrived broken.
"This message is for the criminal check writer, Stephanie Stephenson," said a message left on her answering machine. "You may need to turn yourself in to the local county sheriff's office."
Their accounts were included as evidence by Federal Trade Commission attorneys yesterday who persuaded a federal judge to freeze Sussman's assets and temporarily restrain his company, National Check Control, from using strong-armed collection tactics.
At the same time, the New Jersey attorney general's consumer affairs division sued Sussman in Superior Court in Hudson County, alleging 350 complaints against his companies.
Sussman insisted he had done nothing wrong.
"Evidently, there are a lot of people that don't like the fact that they are being aggressively pursued for their unlawful obligations," he said after a hearing in federal court in Newark. "We are the largest purchaser of bad checks in the United States. All I can say is this is a legitimate business."
Authorities aren't disputing the size of the business. They said Sussman's companies -- which also included Check Investors Inc., Check Enforcers Inc. and Jaredco -- collected as much as $10 million during the past two years from 42,000 consumers and millions of dollars more since 1995.
State Labor Department records submitted in the case suggest Sussman drew a salary close to $150,000 as the sole officer or a president of the companies.
In the process, regulators contend Sussman's collectors committed some of the most egregious violations of the Fair Debt Collection Practices Act that they have encountered. They also said a federal grand jury is weighing criminal charges against the defendants.
FTC staff attorneys Gregory Ashe and Seena Gressin gave Chief U.S. District Judge John Bissell a foot-high stack of affidavits outlining complaints from individuals and government agencies.
They said Sussman and his partners -- his wife, Elisabeth, and lawyer Charles Hutchins -- are not licensed to collect debts in any state, have ignored cease-and-desist orders in at least six states, and are running a "boiler room" operation in Las Vegas in addition to their New Jersey call centers.
Sussman bought hundreds of thousands of bad checks for pennies on the dollar from legitimate companies that had written off the collections, officials said. The debts were often minor and sometimes accounting mistakes. Some of the victims didn't even know about the bad checks because their checkbooks had been stolen.
Sussman's collectors allegedly tacked illegal fees -- usually $125 or $130 -- onto the check balances. They also purported to be law enforcement personnel and threatened the debtors or their relatives with jail.
"Regardless of whether the consumers owed the debts or not, the defendants' allegedly aggressive and shameless tactics fly in the face of basic decency and New Jersey law," acting state Attorney General Peter Harvey said.
One woman told investigators the collector threatened that her kids would "be bringing their mommy care packages in prison." Another said she got a call in the morning in which she was told her husband would be arrested if he didn't pay by noon that day.
Dennis Snyder, a lawyer in Grand Blanc, Mich., said a collector demanded that he pay $612 for a $172 bad check written by his son, a Navy serviceman. The collector claimed he was a former military lawyer, and allegedly told Snyder, "Your son may be coming home (from the Navy) sooner than you think."
Sussman said nothing during the hearing, but his attorney, Steve LaCheen, argued that many of the allegations "are simply way off the mark."
LaCheen called the consumers "deadbeats" and contended that because Sussman bought the accounts outright, he was not a debt collector and thus not subject to federal regulations.
"I think my client had every right to do what he had to do," he said.
Bissell scheduled a June 9 hearing on whether to impose a permanent injunction.
In 1981, Sussman was arrested for impersonating an FBI agent while trying to collect a debt. He was sentenced to probation, but fled the country. He was captured in Florida in 1986 and ordered to serve two years in prison. Not long after, federal prosecutors filed new charges against him and he was sentenced to an additional five years. He served about half.
In the late 1990s, Sussman completed a law degree and applied to be licensed in New Jersey, but the state's board of bar examiners rejected him, citing his past.
John P. Martin covers federal courts and law enforcement. He can be reached at jmartin@starledger.com or (973) 622-3405.
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