Credit Repair: Connecting the Dots

Based on interviews for this story, people who market debt-elimination services online are riddled with bad judgment. They have to be, because the only other possibility is that they are knowingly engaging in fraud, and some of these people are lawyers, so that just can't be.

Phil Manger, an attorney and "managing member" of the Credit Collections Defense Network, told the Houston Press he was completely snowed by former Houston contractor Bob Lindsey.

"He had us totally fooled, obviously, to the point where we even lent him money to create some marketing plans," Manger said, before going on to say that "I don't want you to get the impression that we don't check people out, but in this day and age, when you're running basically virtual offices all over the country and you don't see people eyeball to eyeball and you don't have a bricks-and-mortar business...it's difficult to know who you're dealing with."


credit-repair scams

Funny, we thought he was going to say that, in this day and age, it's actually so freaking easy to check someone's background. If you can't find out anything online, then you can maybe check with a third party, the way we did when we wanted to check out Manger's partner, Chicago attorney Robert Lock. Lock claims on the Network's Web site to be a member of something called the Mayor of Chicago's Council on Technology Advisors. So we called the people in Chicago with a list of past and present members, and they had no record of a Robert Lock serving on that council. See? Easy!

When we e-mailed Lock about this, along with other questions, he declined to answer on the basis that the questions weren't "intelligent." It's possible he just doesn't like the term "vapor money" to describe the theory that he has peddled on various Web sites. In fact, the Network's Web site indicates that the company focuses more on trying to catch debt collectors violating federal collections laws. However, certain form letters that the Network has provided clients appear to use kooky "vapor money" theory arguments to invalidate debts.

Lock told us in an e-mail that "I have never espoused anything that did not come directly from case law, codes, or the Federal Reserve...You might want to read what the Federal Reserve itself says, as these are the foundations for anything that I have ever stated as far as credit and monetary issues go."

Another of our unintelligent questions had to do with a debt-invalidation company called Financial Solutions Educational Institute. A supposed contractor for the Network, Financial Solutions' Web site lists no directors and provides only an Alaska P.O. box for Western Union payments. The company purports to be a ministry, but offers no direct way to connect with a live human being. Lock appears on this Web site in a video testimonial, saying he vouches for the company because he's looked closely into how they operate. Lock's testimonial is also part of a prerecorded "conference call" by an organization called Quest International.

So when we asked Lock for the second time about Financial Solutions, Lock e-mailed the following: "I do not know who the people you have referenced are, nor do I know what you are talking about."

When we pointed out that he actually appears on the Web site saying, "You know, I wouldn't be here with Financial Solutions if I didn't have confidence in theories and strategies...that they were pursuing," Lock told us, "I have had my materials and other information circulated on the Internet for years.  If you can tell me a cost-effective way to police the entire Internet to stop this, I will jump all over it."

When we again expressed dismay, he explained: "I have sent communications to anyone who I could contact to remove any image or likeness or other reference to me from any sites that I did not sanction.  Again, I ask you, how does one with limited resources follow up and enforce that?"

Perhaps Lock was just embarrassed to be endorsing a company whose operator was one of 13 people in three different states arrested by federal agents and indicted in 2008 for allegedly engaging in a "conspiracy to impair and impede the Internal Revenue Service and to commit wire fraud [and] conspiracy to commit money laundering...all as part of a nationwide tax defier movement which promoted the use of offshore trusts and foreign bank accounts as a way of evading federal income taxes."

Of course, accidentally endorsing a company that winds up being part of an alleged massive criminal conspiracy can happen to anyone. But the grief over that might be compounded by Capital One's lawsuit against Lock's company in South Carolina, which accuses Credit Collections Defense Network of teaming up with contractors who used forged Citibank documents that purported to absolve debtors of their obligations.

Plus there's the lawsuit awaiting class certification in Illinois, brought by a Pennsylvania couple who engaged the services of a supposed credit-repair company that lawyers say conspired with Lock's company to pretend to repair credit while actually keeping it in the crapper so Lock's company can then charge the clients to help them with the debt-collection calls.

There's also the North Carolina lawsuit awaiting class certification, filed by lawyer Chris Livingston — an attorney whom the Network once referred clients to, but who came to believe that the Network and its contractors were ripping off the people they purported to help.

Plus it might have been a blow to Lock's confidence when he unsuccessfully defended an accountant named Todd Ellis Swanson before the South Carolina State Board of Accountancy in 2005. The Board stripped Swanson of his license for his involvement in a mortgage scam, where a pair of San Francisco-area guys operating as the "Dorean Group" applied the vapor money theory to mortgages. Swanson signed off on hundreds of bogus mortgage payoffs. (The judge in that case against the two masterminds — who eventually went to prison — opined that "Greater bad faith would be hard to imagine").

The Board stated that "opinion letters embracing the theory that serves as a basis for the scheme could lead to 750+ individuals losing their homes to foreclosure, and potentially many more if the respondent is allowed to continue the practice of accountancy."

Todd Ellis Swanson apparently hoped to avoid any fallout from the Dorean Group scheme by changing his name to Todd-Ellis;Swanson. When we called him at the North Carolina accountancy firm where he (unbelievably) works, we asked him if he still spelled his name with a semicolon. He told us to spell it however we wanted. We totally prefer the semicolon.


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