The U.S. government is seeking to recover at least USD 2 million it says a founder of the bankrupt consumer credit counseling company AmeriDebt Inc. transferred to his father’s account in Latvia.
The money is part of the approximately USD 70 million the Federal Trade Commission says Andris Pukke and his wife earned from the company he co-founded in 1996.
AmeriDebt has agreed to shut down its debt management operation as part of a settlement with the FTC announced March 21. The government sued the company in November 2003, charging the company with deceiving consumers into paying at least USD 170 million in hidden fees. AmeriDebt asked for bankruptcy protection in July 2004.
The government says Pukke moved some of the money to accounts in foreign countries, including Latvia. It has asked the Federal District Court in Maryland to freeze Pukke’s assets and force him to return the money.
Pukke, his wife and others founded AmeriDebt Inc. in 1996 in Maryland. The company advertised that it helped consumers burdened with debt problems, arranging repayment plans with their creditors. AmeriDebt said it was a non-profit company, but it asked customers to make voluntary contributions to help its efforts. Pukke also set up DebtWorks, a for-profit company that processed payments for AmeriDebt.
Although it has settled with AmeriDebt, the FTC’s case against Pukke, his estranged wife and DebtWorks continues. In recent weeks, the government and Pukke’s attorneys have been arguing about whether his assets should be frozen.
Pukke’s attorneys maintain that Pukke and his companies did not deceive consumers. They filed court documents April 11 in which they also say their client’s current income goes to living expenses, tax payments and to his wife. “The transfers about which the FTC complains are past transfers, at a time when Mr. Pukke was in much better financial condition,” the attorneys wrote.
The FTC says Pukke directed the USD 2 million to be transferred from DebtWorks to his father sometime during 2003 or 2004.
Pukke’s troubles with authorities do not end with the federal government. He, his brother Eriks and the companies they control have also been sued in state courts in California, Illinois, Minnesota, Missouri and Texas.
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