Michael and Marina Levitis (Source: James Edstrom)
Rasputin Restaurant owner and Russian Dolls co-star Michael Levitis, and three others, were charged with fraud this morning, as prosecutors claim they operated a debt settlement company that swindled more than 1,200 people out of a total of millions of dollars
The offices of Mission Settlement Agency at 2713 Coney Island Avenue, (Source: Google Maps)
Levitis, who owns Mission Settlement Agency at 2713 Coney Island Avenue in addition to Rasputin, was charged with mail and wire fraud along with three employees: Denis Kurlyand, its vice president of sales; Boris Shulman, a sales representative; and Manuel Cruz, an employee who assisted with customer solicitation.
(UPDATE: Prosecutors are moving to seize Levitis’ properties. Additionally, two other co-conspirators were identified and have already pleaded guilty.)
Prosecutors say that Mission Settlement Agency claimed to help customers struggling with credit card and bank debt by helping them reach settlements that could cut the amount owed. But the company “systematically exploited and defrauded” customer, the criminal complaint says, by charging fees without ever rendering services.
Mission also served as the middle man, collecting payments from customers that were supposed to be passed on to those they owed. Instead, the indictment says, from mid-2009 to March 2013, about 2,200 customers paid nearly $14 million, of which only $4.4 million went to the creditors.
The company kept $6.6 million for itself as fees. As many as 1,200 of the clients paid $2.2 million in fees without “a single penny” reaching their creditors.
Meanwhile, Levitis used the remaining funds as his personal piggy bank, directing some of it to pay his own debts on Rasputin Restaurant (2670 Coney Island Avenue), as well as to lease two luxury Mercedes cars. He did also manage to pay down the credit card debt of his mother, Eva, who owned the company on paper, the Post reports.
According to the indictment, as part of his sales pitch, Levitis touted an affiliation with the federal government and one of the three leading credit bureaus in the U.S., relationships that prosecutors say was all smoke.
It’s not the first time Levitis has claimed a government relationship he may not have had.
Back in 2010, Levitis was charged with lying to federal agents after he got caught up in a bribery case involving former State Senator Carl Kruger.
Levitis told a fellow nightclub owner, who was secretly recording the conversation for the FBI, that he had an inside line to the state pol, and could assist him with a liquor license issue if he steered thousands of dollars to Kruger – with a kickback for Levitis’ role in setting it up.
As the case moved forward, Levitis’ claim that he had influence in Kruger’s office began to unravel, and Levitis, who is also an attorney, later pleaded guilty to lying to federal agents, sentenced to three years probation and fined $15,000.
In April, Levitis was also hit with a six month suspension of his license to practice law – retroactive to January 2012 – for his role in the case. According to Reuters:
The appeals court said it took into account mitigating factors presented by Levitis, including “the aberrational and unplanned nature of his misconduct,” his remorse, his cooperation with the grievance committee’s investigation and his reputation as an “ethical and honest attorney.”
Levitis, his mother and his wife, Marina, were also the co-stars of Russian Dolls, a failed Lifetime reality series canceled less than two months after its premiere.
The case against Levitis and Mission is being hailed as historic, as it’s the first criminal referral from the U.S. Consumer Financial Protection Bureau, an agency established after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB is also bringing civil charges against Mission, Levitis and others.