The Consumer Financial Protection Bureau was created as a watchdog. Not just a rulemaking and regulatory agency, it also was chartered to crack down on wrongdoing in financial markets. But, while the bureau has collected penalties from transgressing financial institutions, it never has been responsible for criminal charges.
This month, after nearly two years in operation, a CFPB investigation has helped bring charges against criminals in financial crime for the first time. The U.S. Department of Justice charged Mission Settlement Agency, its manager, Michael Levitis, and three of its employees for exploiting and defrauding more than 1,200 people, taking fees for debt settlement amounting to $2.2 million without ever having paid a penny to customers’ creditors.
The wrongdoing came to DOJ’s attention as a result of a CFPB investigation which began in July 2012. The bureau discovered Levitis was preying upon people in financial desperation, stealing what money they had to buy a Mercedes-Benz and to pay credit-card bills for his mother. The bureau then referred the case to the DOJ as required by the Dodd-Frank Act. Charges were brought in the Southern District of New York on May 7, according to the DOJ press release.
“We are proud of this joint effort to crack down on unscrupulous behavior,” CFPB Director Richard Cordray said at the Southern District of New York’s enforcement press conference on May 7. “Consumers deserve better.”