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Minnesota debt collector charged with fraud

Jan 03, 2013 Philip Burgess

Minnesota debt collector charged with fraud

Debt collection agencies have experienced a spotty record in the media in the past few years, with a number of questionable practices bringing the entire industry into question.

Recently, the U.S. Justice Department announced fraud charges against a Minnesota debt collection agency, InsideARM reported. Khemall Jokhoo, the founder, owner and sole collector of First Financial Services, was charged with 11 counts of bank fraud, nine counts of mail fraud, three counts of wire fraud, 10 counts of aggravated identity theft and one count of false impersonation of an officer or employee of the United States.

According to the news source, Jokhoo's collection agency license was revoked in 2009 by the Minnesota Department of Commerce. In 2011, Jokhoo and his company were fined $100,000 for violating the Fair Debt Collection Practices Act.

Jokhoo allegedly used improperly gathered information to contact victims and falsely tell them they had past due debts. If found guilty and convicted, Jokhoo could be sentenced to up to 30 years in prison for each count he's charged on.

Earlier this year, a separate agency ran into trouble for allegedly pressuring hospital patients to recoup debts. To avoid similar issues, agencies will want to make sure new hires are trained according to best practices and have gone through thorough background checks.