The Consumer Financial Protection Bureau sued three executives of a Colorado debt collection firm for allegedly selling debts to third-party collectors who threatened consumers with arrest, jail or lawsuits to get paid. The CFPB said in a lawsuit filed Monday that three executives — Craig Manseth, co-CEO and president of United Debt Holding, a debt buyer in Englewood, Colo.; Darren Turco, United’s co-CEO; and Jacob Adamo, the company’s chief operations officer — engaged in illegal debt collection practices in violation of the Fair Debt Collection Practices Act.

 The executives also own and manage two other companies, United Holding Group and JTM Capital Management, which were also named in the 33-page lawsuit. The bureau said the executives misrepresented the “connections and ongoing nature of their various business entities.”

“This debt collection ring and its operators created the conditions for rampant abuse,” CFPB Director Rohit Chopra said in a press release. “Companies cannot profit and evade liability simply by creating a maze of shape-shifting entities and enabling third parties to take advantage of consumers.”

The CFPB alleges that the executives “knowingly or recklessly placed and sold debts to debt collection agencies that used threats and misrepresentations to coerce payments from consumers.” The executives “did not take meaningful action to prevent or preclude further false statements, and the defendants for the most part continued doing business as usual with these debt collectors,” the agency said.

Since 2015, the executives received more than 500 complaints from consumers alleging a debt collector threatened them with criminal charges if they did not pay their debts. Collectors also allegedly told consumers that their credit reports would improve if they paid their debts, or would be negatively affected if they did not. The executives did not respond to requests for comment.

The companies purchased millions of dollars in defaulted consumer debt for pennies on the dollar. From September 2017 through April 2020, the executives placed roughly $8 billion in debts with third-party collectors, the CFPB alleged. The companies sold roughly 380,000 consumer accounts and received hundreds of complaints over the years alleging threats and other misrepresentations, according to the lawsuit. To read more click here.