U.S. Attorney McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate of the Detroit F Office of the Federal Bureau of Investigation.
Sentenced were Bernadino J. Pavone, Jr., 48, of Macomb, Michigan, and Abood Samaan, 50, of Ypsilanti, Michigan.
Pavone was sentenced to 48 months in prison, and Samaan was sentenced to 12 months and one day by U.S. District Judge Nancy G. Edmunds. Judge Edmunds also ordered the defendants to pay USD 554,000 to the Federal Trade Commission.
The scheme to defraud was executed throughout the United States and involved the sale of a credit repair service by ICR Services (ICR), a multi-level marketing company owned by Pavone and managed with Samaan's help.
Pavone and Samaan falsely claimed to have a "proprietary software" program, often called "the magic disk," that could erase negative and derogatory information from consumer credit reports.
Relying on this false promise, more than 180,000 consumers paid for the worthless product that brought over USD 50 million into ICR.
Pavone and Samaan were well-versed in the consumer protection rules and regulations contained in the Fair Credit Reporting Act.
By taking advantage of these protections through false statements and claims, they were able to temporarily remove negative items from consumer credit reports.
For a short time, this allowed unsuspecting consumers to disguise their true credit-worthiness and to trick potential lenders into risky credit relationships.
United States Attorney McQuade stated, "These defendants preyed upon consumers who were desperate to repair their credit and who would be reluctant to report the crime to law enforcement."
Sentencing for co-defendant Gloria Tactac is scheduled for November 14 at 10:30 am. Sentencing for co-defendant Todd Renzt is scheduled for November 19 at 2:00 pm.
The case was investigated by the FBI with assistance from the Chicago Regional Office of the Federal Trade Commission.
--IBNS (Posted on 08-11-2013)