- Associated Press - Monday, July 21, 2014

ALBANY, N.Y. (AP) - A federal judge has ordered Buffalo-based debt collectors to stop telling borrowers they face prison for check fraud and making other false threats.

The injunction, sought by New York Attorney General Eric Schneiderman and the Federal Trade Commission, freezes assets of the collection operation and gives temporary control to a court-appointed receiver.

The defendants agreed to the injunction without admitting wrongdoing.

The lawsuit accuses Joseph C. Bella III and Luis Shaw, both of Buffalo, Florida resident Diane Bella, and nine interrelated companies of buying debt mostly from payday loans since 2010 and misrepresenting that borrowers committed crimes and face dire consequences if they don’t promptly pay.

Attorney Dennis Vacco, representing the companies, says the ruling essentially updates an earlier court order while removing two affiliates not involved in collections from control of the receiver, who shut down the businesses.

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