Consumer Law

Inmate Ran Collection Agency While In Prison

By M. Stan Herring

Bloomberg Businessweek has posted an article about an inmate who was running a debt collection company while he was incarcerated. Lamont D. Cooper was imprisoned in October 2009 for violating the terms of his release for a drug conviction and continued to run Legal Action Recovery, his debt collection agency. He was "barred from the business" in back in April 2009 for using "threats and intimidation" when dealing with collecting debts, but it seems most of his business was directed toward people who didn't owe any money in the first place.

Karen Freifeld, author of the article, writes that while Cooper was in prison, his employees would pretend to be law enforcement officers when they contacted debtors and tried to scare them into paying, sometimes nonexistent, debts. People were told they would be arrested and put in jail unless they paid immediately; some people actually sent money through wire transfers or authorized the withdrawal from their bank account. About $1.38 million was collected and deposited into Cooper's CMC Recovery Services account.

While this was going on, Cooper was telling his probation officer that he was employed by a financial corporation that bought and sold debt portfolios. He said he made $72,000 a year plus bonuses.

Cooper has been accused of operating a scheme to defraud and can face up to four years in prison. He can also be charged with criminal contempt and be sentenced to an additional year.

If you have been harassed by a debt collector and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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Full post as published by Alabama Consumer Blog on September 22, 2010 (boomark / email).