A debt collector in Williamsville recently pleaded guilty to scamming a local bank in a fraud that caused his nearly two dozen victims to lose $440,000. Noah Schapiro, the man who ran the fraud was told by the State Supreme Court he will probably face a prison term of six to twelve years and will that he will be forced to sign confessions of judgment for his whole scam to seventeen debt investors and the Citizens Bank.

Talking in a soft voice that caused the judge to periodically tell him to speak louder, Schapiro pleaded guilty to grand larceny and scheme to defraud charges. Pending his March 22 sentencing, he was remanded.

Financial Crimes Prosecutor, Candace K. Vogel and the State Police Investigator Therese Schroeder informed the judge that the mastermind of the ploy, a former stock broker stole $388,168 from his victims ranging from March 2008 through September 2009. The victims, of course, had been promised big profits in his debt collections funds.

According to Vogel and Schroeder, Schapiro was also convicted in 1998 of investment fraud and that he spent his investment funds either on himself or to pay off past debts from from former investors he had scammed before. Vogel informed the judge that the debt collection scam was just “one big Ponzi scheme.”

She attested to the fact that Schapiro pulled off a check “kiting” fraud scheme to scam the bank between May twentieth, 2009, and June eleventh, 2008 by writing out checks to other business on a bank account from Citizens Bank that he knew did not have the funds to cover those checks.

Businesses that are looking to hire out potential third party debt collections agencies can prevent this fraud from happening by taking the following precautions. Know the company you are working with, acquire the contact information, address, and name of the person in charge of accounts receivable. Ironically, pulling a credit report on this person can be of assistance as well.

Mallory Megan works for a nationwide collection agency. Kick off your recovery services with a collection letter.