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  • Condor Capital -NY

    NEW YORK -

    The Dodd-Frank Act provided the foundation for more regulation of auto financing by federal regulators. Now a state-level agency is leveraging Dodd-Frank to seek orders against a New York-based subprime lender.

    Benjamin Lawsky, who is New York’s Superintendent of Financial Services, obtained a temporary restraining order in federal court this week against Condor Capital Corp., a subprime auto lender headquartered on Long Island, and its owner, Stephen Baron.


    Lawsky explained a DFS investigation uncovered that allegedly Condor has engaged in a longstanding scheme to steal millions of dollars from its customers — among other unfair, abusive, and deceptive practices.

    As part of its ongoing legal proceeding, DFS is seeking restitution for Condor consumers, disgorgement of profits, the appointment of a receiver to wind down Condor’s operations, and other remedies.


    Lawsky indicated the proceeding against Condor is the first legal action initiated by a state regulator under section 1042 of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act. Lawsky noted that provision empowers state regulators to bring civil actions in federal court for violations of Dodd-Frank’s consumer protection requirements, and obtain restitution for abused customers and other remedies provided for under that law.

    “When companies abuse New York consumers, we will use any tool at our disposal to get restitution and help make things right,” Lawsky said. “As alleged, the defendants bilked millions of dollars from vulnerable borrowers who could least afford it. We are taking swift action today to stop them from abusing any more consumers and help obtain relief for those who were victimized.”

    Condor is a finance company that acquires and services loans to customers in New York and more than two dozen other states, including:

    —Alabama
    —California
    —Colorado
    —Connecticut
    —Florida
    —Georgia
    —Iowa
    —Illinois
    —Indiana
    —Kansas
    —Kentucky
    —Maine
    —Maryland
    —Michigan
    —Minnesota
    —Missouri
    —Mississippi
    —North Carolina
    —Nebraska
    —New Jersey
    —Ohio
    —Oklahoma
    —Oregon
    —Pennsylvania
    —Tennessee
    —Texas
    —Virginia
    —Washington
    —West Virginia

    According to its website, Condor was founded in 1994 by a management team with more than 50 years of auto financing experience.

    “Our commitment is to provide the best customer care to consumers and the thousands of dealers we service. Our goal is to train and equip our staff with state of the art technology to serve our customers in the most courteous and professional manner possible,” company officials said.

    The company located in Hauppauge, N.Y., also mentioned the suit on its website.

    “Pursuant to a court order, Condor Capital Corp. is not currently accepting new loans or applications for new loans,” officials said. “Existing and former customers of Condor Capital Corp. continue to have access to their accounts through this website.

    “If you are a current or former customer of Condor Capital Corp. and you believe that you may have a positive credit balance owed to you, you may file a complaint with the New York State Department Of Financial Services,” the company goes on to say.

    According to Condor’s most recent annual report filed with DFS, at the end of 2013, Condor held more than 7,000 loans to New York customers with total outstanding balances of more than $97 million. That reported showed Condor’s 2013 loan portfolio contained aggregate outstanding loans of more than $300 million nationwide.

    For the year, Condor reported net after-tax income of approximately $7 million on operating income of approximately $68.7 million, DFS said.

    According to the complaint brought by DFS, Condor is alleged to have systematically hid from its customers the fact that they have refundable positive credit balances.

    “A positive credit balance is money owed by Condor to a customer as a result of an overpayment of the customer’s account that can come about in several different ways,” DFS officials said. “For example, a customer might pay more than the outstanding loan balance, a car may be destroyed (or totaled), and the insurance proceeds might exceed the outstanding loan balance, or a customer might trade in the car that is the subject of the loan and receive a credit greater than the outstanding balance.

    As alleged, rather than notifying customers of positive credit balances and promptly paying them refunds, agency officials said Condor has “for years knowingly and systematically hidden the existence of the positive credit balances and retained them for itself, and has maintained a policy of refusing to refund them except when expressly requested by a customer.

    “Condor has ensured that such requests will occur rarely, if ever, by actively concealing the existence of positive credit balances to prevent customers from detecting them and requesting refunds,” they continued.

    For example, DFS alleged that Condor has deceptively programmed its customer-facing Web portal to shut down a customer’s access to his or her loan account once the loan has been paid off, even if there is a positive credit balance due to the customer.

    Condor is also alleged to have endangered the security of its customers’ personally identifiable information, placing them at serious risk of identity theft.

    Among other information-security lapses, the DFS examiners found stacks of hundreds of hard-copy customer loan files lying around the common areas of Condor’s offices.

    State officials noted that Condor also has failed “despite repeated directives from DFS” to adopt basic policies, procedures and controls to ensure that its information technology systems and the customer data they contain are secure.

    DFS said it reviewed and analyzed numerous complaints about Condor.

    “Multiple customers have alleged that Condor has harassed and threatened customers and friends and relatives of customers, including for accounts that are current,” officials said. “Other customers have alleged that Condor has reported inaccurate information to credit agencies, imposed fees or late charges where none are appropriate, or has failed to properly apply payments to loan balances.

    Still other complainants — including complainants that are not Condor customers — have alleged that Condor has made unauthorized charges to their credit cards or unauthorized debits from their bank accounts,” DFS went on to say.

    The allegations in DFS’s complaint remain subject to proof at trial. The court has scheduled a hearing on DFS’s request for a preliminary injunction for Tuesday at 10 a.m.

    - See more at: http://www.autoremarketing.com/subpr....mwGuFXaQ.dpuf

  • #2
    NY Reaches $12M Settlement With Subprime Auto Lender

    Source: http://webcache.googleusercontent.co...&ct=clnk&gl=us

    This is Google's cache of http://www.law360.com/articles/60666...me-auto-lender. It is a snapshot of the page as it appeared on Jan 1, 2015 06:09:56 GMT

    Law360, New York (December 19, 2014, 5:26 PM ET) -- New York’s top financial enforcement agency on Friday announced a settlement that could reach up to $12 million with a subprime auto lender and its owner over an alleged scheme to steal millions of dollars from consumers, among other unfair practices.

    The settlement between the New York Department of Financial Services, Condor Capital Corp. and its owner Stephen Baron, marks the conclusion of the first-ever lawsuit brought by a state regulator using powers granted by section 1042 of the Dodd-Frank Act, the landmark 2010 financial regulatory overhaul.
    “This case demonstrates that the Dodd-Frank Act provides a powerful new tool for state regulators to pursue wrongdoing and obtain restitution for consumers who were abused. We hope other regulators across the country will consider taking similar actions when warranted,” New York Superintendent of Financial Services Benjamin Lawsky said in a statement.

    Lawsky and the DFS sued Happauge, New York-based Condor Capital, which acquires and services subprime car loans in more than two dozen states, and Baron in federal district court in Manhattan in April alleging that they engaged in a scheme that wrongfully retained consumers’ positive credit balances and concealed them from its customers and regulators since the company’s inception.

    Baron and Condor systematically hid from customers that they had a refundable positive credit balance — money owed by Condor to a consumer as a result of an overpayment, the DFS alleged.

    Rather than notifying customers of positive credit balances and paying the refunds, Condor has knowingly hid their existence for years and only provided refunds when customers expressly requested them, the DFS said.

    The agency also claimed that Condor endangered the security of its customers’ personally identifiable information, placing them at serious risk of identity theft, according to the suit.

    Under the terms of the settlement, Condor and Baron are required to make full restitution plus 9 percent interest payments to customers who were harmed nationwide, plus pay a $3 million penalty. The company and Baron also admitted to violations of New York and federal law.

    New York regulators were able to secure a temporary restraining order against Condor when the lawsuit was filed.

    The settlement, which Condor and the DFS signed off on Thursday, requires the company to sell off the remainder of its loans in a way that preserves consumer protections and then turn over its operating licenses in all states it does business.
    “We will not tolerate companies that abuse New Yorkers and other customers — particularly vulnerable subprime borrowers who can least afford it,” Lawsky said.

    Michael Rosensaft, a Katten Muchin Rosenman LLP partner representing Condor, declined to comment on the settlement.

    The New York Department of Financial Services was represented by Jonathan Hochman, Richard Bettan and Matthew Katz of Schindler Cohen & Hochman LLP, as well as by Joy Feigenbaum, Nancy I. Ruskin, Brian Montgomery, Adam Schleifer and Anna MacCormack of the New York State Department of Financial Services.

    Condor and Baron were represented by Michael Rosensaft of Katten Muchin Rosenman LLP.

    The case is Lawsky v. Condor Capital Corp. et al., case number 1:14-cv-02863, in the United States District Court for the Southern District of New York.

    Comment


    • #3
      If you are doing work for Condor or if they owe you money for services rendered.....you now know what is going on with them.

      Good Luck

      Comment


      • #4
        Buyers for Condor Capital?

        http://www.autofinancenews.net/buyer...ondor-capital/

        November 5, 2014
        by Cody Lyon

        It looks like a portion of embattled Long Island, N.Y.-based subprime auto lender Condor Capital Corp.’s loan portfolio may have a buyer, or buyers, according to a document filed by the court-appointed Receiver yesterday.

        The buyers of the portfolio indicated in the document include Fortress Credit Corporation and Ares Management LLC, as well as California-based Westlake Services LLC. That could mean that Condor’s loan facility lender, Wells Fargo, will get the $168 million it has been fighting for in court sooner rather than later.

        The court memo, addressed to U.S. District Judge Colleen McMahon, said the buyers had requested a specific order from the court authorizing the sale of Condor’s receivables to them.

        In a handwritten note, the judge wrote “I will issue an order formerly affirming that the Receiver has absolute discretion to dispense of the assets of Condor and pay off the Wells Fargo loan.”

        She then instructed the Receiver to submit a payment order.

        Receiver Denis O’Conor, of New York City based Alix Partners LLP, said in the memo that the buyers were the leading bidders in an auction process. They are targeting November 14 as a closing date on the transaction. The buyers and the Receiver also asked for a shortened or expedited process to obtain the legal comfort the buyers seek.

        Significant terms of the expected transaction include a purchase price equal to 92% of the Unpaid Principal Balance of the Receivables as of the cut-off date. The pool of loans selected by the buyers will include current customer accounts and is expected to yield a payment to Condor of around $185 million.

        The Receiver wrote that as of October 31, 2014, the unpaid balance of Condor’s entire portfolio is around $389 million, of which about $312 million is current.

        After the repayment on the Wells Fargo facility, the excess cash from the transaction will be available to reserve for customer refunds and restitution amounts identified by the New York State Department of Financial Services.

        Comment


        • #5
          So basicly Wells Fargo gets $168 million it's owed, state of New York gets $12 million and the people who did over pay get pennies but only if they file a claim, and the former owners of Condor open up a new finance company months from now in another state under a different name.

          Comment


          • #6
            Originally posted by alscode View Post
            So basicly Wells Fargo gets $168 million it's owed, state of New York gets $12 million and the people who did over pay get pennies but only if they file a claim, and the former owners of Condor open up a new finance company months from now in another state under a different name.
            Yup, That's one way of looking at it.

            I was trying more to send a message to agents to make sure they get paid for their invoices or risk getting screwed.

            Comment


            • #7
              Lawsky v. Condor Capital Corporation et al
              New York Southern District Court, Case No. 1:14-cv-02863
              District Judge Colleen McMahon, presiding
              docket://gov.uscourts.nysd.1-14-cv-02863


              Filed: 12/22/2014, Entered: None Court Filing

              FINAL CONSENT JUDGMENT: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED: For purposes of this Final Consent Judgment, a person shall be considered "Independent" if the person: (1) is not related by blood or marriage to Stephen Baron; (2) is not a current or former business associate or personal acquaintance, including an employee or employer, of Stephen Baron or any person related by blood or marriage to Stephen Baron; and (3) is not a current or former attorney, fiduciary, or other advisor who has represented Stephen Baron, Condor, or any person related by blood or marriage to Stephen Baron.

              The Receiver shall sell all remaining loans in Condor's loan portfolio to one or more Independent purchaser(s) that is (are) in compliance with all applicable licensing requirements.

              The Receiver shall enter into a binding, written letter of intent to sell all remaining loans in Condor's loan portfolio ("Letter of Intent") no later than one-hundred-twenty days after January 5, 2015 or one-hundred-twenty days after the entry of this Final Consent Judgment, whichever is later, which date may be extended for good cause.

              In all events, the Receiver shall structure the sale of Condor's loans in a manner that ensures that Stephen Baron shall exercise no influence, directly or indirectly, over the servicing of these or any other loans at any present or future time, and shall include in any documents memorializing any such sale transaction language to this effect.

              Condor and Stephen Baron shall pay a civil monetary penalty of $3,000,000 to the Department within ten days of execution of this Final Consent Judgment. T

              The payment shall be in the form of a wire transfer in accordance with the Department's instructions or a certified or bank check made payable to the "Superintendent of Financial Services" and mailed to: New York State Department of Financial Services, One State Street, New York, New York, 10004-1511, Attn: Joy Feigenbaum, Executive Deputy Superintendent, Financial Frauds & Consumer Protection.

              The Receiver shall establish an escrow account and place $6,643,630 in the escrow account to fund restitution payments to Condor's customers, as follows herein.

              Condor shall surrender its New York sales finance company license and any other license that permits Condor to make or acquire consumer loans in any state.

              The Receivership and the Court's previous Orders and Opinions shall remain in full force and effect.

              Condor's or Stephen Baron's failure to make the required demonstration within the specified period is presumptive evidence of Condor's or Stephen Baron's Breach.

              IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Condor and Stephen Baron shall, upon request by the Department, provide all documentation and information reasonably necessary for the Department to verify compliance with this Final Consent Judgment.

              IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth herein.

              IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Consent Judgment.

              IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Department may apply to this Court to impose sanctions on any person or entity that violates this Final Consent Judgment, and the following as further set forth herein.

              (Signed by Judge Colleen McMahon on 12/22/2014) (kgo) (Entered: 12/22/2014)

              Comment


              • #8
                So the way i read the final order if you did any work for condor you won't be getting paid, only those who had loans and file a claim will get something.

                Comment


                • #9
                  I dont do work for them but I have heard from a few that do that they have an email saying Condor is out of business, going to sell all of its paper within the next 45 days. Not sure if this is true or not

                  Comment


                  • #10
                    It's True.


                    Here is the content of the email, it was sent out on Thursday.
                    If you work for them you should have gotten it already.


                    I wanted to take a moment to update you on Condor's current situation. Stephen Baron and NY DFS are in the process of selling our remaining portfolio and winding down the business. While I have not been given a timeline, I believe the sale should be completed by mid February. Up until the sale and transfer Condor needs the service you provide. I understand you are concerned regarding payment for past, present, and future repossessions. In response to that uncertainty, I have arranged for you to be paid weekly beginning 1/19. Theresa and I will make sure you are paid for the services you provide. I know Theresa is working on the billing today and checks should be in the mail by Tuesday of next week. I ask that you release our vehicles as you normally would. If you have any questions you can reach out to me or Theresa. Thank you.

                    Comment

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