A Babylon man has pled guilty to planning to commit fraud and bribery in a $10 million investor fraud scheme in Connecticut.
David Fein, United States District Attorney for Connecticut, announced three executives of Oxford Collection Agency, Inc. pled guilty in a Bridgeport federal court to charges stemming from the scheme. The company was a private financial services company involved in debt collection for, among others, an educational institution, laboratory, computer company and bands, with offices in New York, Pennsylvania and Florida.
Charles Harris, 38, of Babylon, pled guilty to one count of conspiracy to commit wire fraud and bank bribery. Harris had previously held positions as treasurer and vice president of the company. Another man, Carlos Novelli of Vero Beach, FL, also pled guilty to the same charge.
Former Vice President of Finance and CFO Randall Silver, 43, of New Hyde Park, pled guilty to one count of conspiracy to commit wire fraud, bank fraud and money laundering, and one count of wire fraud.
According to Fein, Oxford was contracted to collect debts owed to various companies. Oxford collected the debts under the pretext it would report all such collections to its clients and give the appropriate amount to the client. Harris, along with other Oxford executives, had the company collect on debts that were never given back to its clients, referring to these as that company's "backlog."
To hide this backlog, Fein said the conspirators made periodic fraudulent collection reports and under reported amounts collected.
Fein also said some of the conspirators transferred money from one client to another to cover shortfalls and backlogs.
Each conspiracy charge can carry a maximum of 5 years and wire fraud charges carry a maximum amount of 20 years. Additional fines will be ordered when Harris and the others are sentenced.
The conspiracy, spanning many months and different executives, has been investigated by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Connecticut Securities, Commodities, and Investor Fraud Task Force. The case is being prosecuted by Assistant U.S. Attorney Liam Brennan, Special U.S. Attorney John McReynolds and Deputy U.S. Attorney Deirdre Daly.