By Nate Raymond
NEW YORK (Reuters) - A Georgia debt collection company's owner was convicted on Tuesday of having engaged in a scheme to shake down more than 6,000 financially strapped consumers nationwide by warning they could face arrest or prison if they failed to pay up.
John Williams, who owned Williams, Scott & Associates LLC, was found guilty by a federal jury in Manhattan of conspiring to commit wire fraud. The trial spotlighted efforts by U.S. authorities to combat unscrupulous debt collectors.
Williams faces up to 20 years in prison at his scheduled Oct. 28 sentencing before U.S. District Judge Richard Sullivan. He has been held without bail since his November 2014 arrest.
Mark DeMarco, a lawyer for Williams, declined to comment. He had argued in court that prosecutors had failed to show that his client intended to harm consumers.
Some debt collection firms buy delinquent debts, often for just pennies on the dollar, and try to collect the full amounts owed. The firms often justify their tactics by saying they are simply seeking to recoup money owed.
But regulators and critics say many firms cross the line, and the U.S. Consumer Financial Protection Bureau has said debt collection generates more complaints than any other consumer financial services area it monitors.
The arrest of Williams, 50, and six of the Norcross, Georgia-based debt collector's employees came six months after the Federal Bureau of Investigation raided the firm and the Federal Trade Commission sued to shut it down.
Prosecutors under Manhattan U.S. Attorney Preet Bharara said employees would call consumers, falsely claim to be detectives or investigators associated with government agencies, and warn that arrests were possible if the targeted consumers did not cooperate.
Scripts read by employees included legal language designed to instill fear, including that the "statute of limitations" or the consumers' "civil legal rights" had expired, prosecutors said.
Assistant U.S. Attorney Sarah Paul told jurors that Williams' firm defrauded 6,000 customers from 2009 to 2014 into paying about $4.1 million.
The six other arrested employees have pleaded guilty.
The case is U.S. v. Williams, U.S. District Court, Southern District of New York, No. 14-cr-00784.
(Reporting by Nate Raymond in New York; Editing by David Gregorio)