Illegal "Debt Consolidator" Scam Artist Targets Latinos

Attorney General Spitzer today won a court-order temporarily shutting down an illegal Queens-based debt consolidation scam defrauding thousands of debt-burdened Latinos out of nearly one million dollars.

His office has filed a lawsuit in State Supreme Court in New York County accusing Alex Treschzanski, the owner and operator of Trescha Corp., using the names "Financial Law Fitness and "Multi Service," of operating a "budget planner" service without a State license.

Specifically, Spitzer's office accuses Treschzanski of deceiving consumers into believing they must pay exorbitant fees, between $295 and $895, to receive help paying back their debts. The court papers allege that Treschzanski's businesses hired untrained and unqualified "financial counselors" who discouraged them from getting other legal advice about bankruptcy and told them that its "debt consolidation" services are the only viable option to their financial problems.

Consumers were sometimes told that Financial Law Fitness or Multi Service would contact the creditors directly and negotiate to lower or eliminate the interest rates on the consumer's accounts; but, in fact, this was never done by these companies.

"Personal debt, especially credit card debt, has risen so signficantly in the past years that it is driving many people to do desperate things to gain control of their finances," Spitzer said. "This man has targeted minority communities and has taken advantage of consumers at a very vulnerable time of their lives. This lawsuit underscores the need for aggressive State oversight and regulation to ensure financial scam artists like this one do not victimize any more consumers."

Spitzer reported that hundreds of consumers have complained to his office and the State Banking Department about the business practices of Treschzanski’s companies.

Budget planning, a type of debt consolidation, is a service whereby a consumer makes lump sum payments to a budget planner who is responsible for negotiating with and paying back the consumer's creditors. Due to significant consumer problems in the past, budget planning is legal only for attorneys and not-for-profits licensed by the State Banking Department.

Included with his request for full restitution of up-front fees and civil penalties, Spitzer's lawsuit seeks to stop Treschzanski and his companies from: acting as a "budget planner" without the proper State license; misrepresenting that a fee must be paid as a prerequisite to participating in any debt consolidation services; and misrepresenting the services being offered or the qualifications of his personnel.

Two not-for-profit corporations, California Consumer Credit Corp., of Los Angeles and Family Financial Education Foundation of Evanston, Wyoming, which accepted refferals from Treschzanski's businesses, are also named in the lawsuit for conducting unlicensed budget planning businesses in New York.

Individuals interested in filing a complaint against Treschzanski and his debt consolidation services, Trescha, Inc., Multi Service, and Financial Law Fitness are encouraged to call the Attorney General's consumer help line at (800) 771-7755 or visit his web site at www.ag.ny.gov.

This case is being handled by Assistant Attorney General and Director of Consumer Advocacy Stephen Mindell, and Assistant Attorneys General Herbert Israel and Andre Lugo of the Consumer Fraud and Protection Bureau.

Attorney General Spitzer also wishes to acknowledge the New York State Banking Department for its cooperation and assistance on this case.