Office of the Attorney General News Release Archive
Wednesday, January 3, 2001
CORNYN FILES SUIT TO CLOSE DEBT COLLECTION AGENCIES
Three Houston-Area Companies Cited for Illegal Solicitations and Services
HOUSTON - Texas Attorney General John Cornyn today received a temporary restraining order (TRO) to close three fraudulent Houston-area debt collection agencies. The petition for TRO, which cites individuals affiliated with the companies, also requests the freezing of certain bank accounts and the forfeiture of funds.
Involved in criminal search warrants today in this cooperative enforcement case were the Harris County District Attorney's office and the Federal Bureau of Investigation.
The defendants named are Rudolph Stearnes III, William Ficka III and Kyle Holder, with their respective companies - Campbell, Campbell, Drexler & Gates; Thomas, Thomas, Alexis & Lynn; and Ashton, Ashton, O'Riley & Schwartz.
"The allegations in this case paint a picture of three people who brazenly harmed numerous individuals and businesses in Texas and all across the country using fraudulent and empty debt collection promises," said Attorney General Cornyn. "We contend that they passed themselves off as attorneys in legitimate law firms, then proceeded to collect money from debtors without returning this money to the creditors."
According to allegations in the petition filed today, these companies sent unsolicited faxes across the country in an effort to attract debt collection business from creditors experiencing problems with collections. State law requires that debt collection agencies be bonded, while these were not. Also, sending unsolicited faxes violates federal law.
Representing themselves as attorneys, the individuals named in the suit allegedly solicited companies for credit files. When they obtained these, they used extreme methods of telephone intimidation to coerce the debtors into payment, then once they collected this debt, they allegedly never reimbursed their clients, the creditors. In turn, the defendants quickly changed addresses and phone numbers to avoid detection.
The Attorney General's Consumer Protection Division has alleged that the companies committed numerous violations of the Deceptive Trade Practices and Consumer Protection Act, including causing confusion or misunderstanding about sources or affiliations of goods or services, and representing that goods or services have approvals, sponsorships or standards, when in fact they do not.
The companies also are charged with several violations of the Debt Collection Act, including prohibitions against harassment and profanity, according to the petition.
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