Local woman will serve federal prison time for debt collection scheme

BUFFALO — A Niagara Falls woman has been sentenced to just under two years in federal prison for her role in a scheme involving what prosecutors have called “fraudulent debt collection companies” operating out of the Falls, Grand Island and Kenmore.

Erica Lounsberry, 37, who was convicted of conspiracy to commit wire fraud, was sentenced to serve 21 months in prison by U.S. District Court Judge Richard J. Arcara.

Lounsberry was one of six people arrested and charged as part of a federal law enforcement investigation into the business activities of Joseph Ciffa. Ciffa, 56, of Grand Island, was identified by prosecutors with the U.S. Attorney’s Office for the Western District of New York as “the ringleader” of a conspiracy centered on illegal debt collection.

Federal prosecutors have said that Ciffa, who has been accused of operating debt collection businesses since at least 2013, was not engaged in “a legitimate (business) operation.” They charged that Ciffa and his employees, including Lounsberry, used “fraudulent means to collect on debts, to recollect on debts already collected, and to process and transfer payments related to the collection of such debts.”

Assistant U.S. Attorney Franz M. Wright, who handled the case, said that between January 2014 and February 2017, Lounsberry “conspired with others in the activities of supposed debt collection agencies, which operated under various names.” Lounsberry was identified as the “manager” for Lakeside Mediations, Lincoln Mediation, Valentine Legal Mediation, First Point Mediation, State Filing and Legal Services, and Elite Services.

Prosecutors said in her capacity as a manager, Lounsberry “directed and trained other employees, including those who placed calls to (alleged) debtors, those who posed as attorneys during the calls, and those who provided the (alleged) debtors with payment instructions.” Wright said that Lounsberry and the employees she managed placed telephone calls to thousands of alleged debtors throughout the United States.

He said they used “various fraudulent tactics and misrepresentations to induce the (alleged) debtors to make payments, including using false identities, making false threats that the (alleged) debtors would be arrested, and making false claims that criminal charges would be filed against them.” The alleged debtors were then directed to other employees, posing as attorneys who provided them with payment instructions to “settle their outstanding debts.”

The prosecutors charged that Lounsberry and other Ciffa employees routinely collected money from people who they had already collected payments from or people they deemed to be “easy targets.” The alleged debtors were instructed to make payments by using MoneyGram, bank wire transfers, and debit/credit card payments.

Between February 2015, and December 2016, prosecutors said Lounsberry, and those she managed, collected more than $2 million.