McGraw

CHARLESTON -- State Attorney General Darrell McGraw has sued a Florida man and his web of shell companies over an apparent fraudulent credit counseling scheme.

The lawsuit, filed Monday in Kanawha Circuit Court, targets James R. Armstrong Jr. of Coral Springs, Fla., who allegedly masterminded a web of for-profit companies to enrich himself by providing debt management services through shell companies. The suit also names numerous Florida-based companies owned or controlled by Armstrong including Family Credit Counseling Corporation, Debt Solutions Foundation Inc., Top Financial Sales & Marketing Inc., Consumer Financial Marketing Inc., Consumer Debt Management & Education Inc., JRA Property & Land Management LLC and Vegga Corporation.

McGraw's lawsuit seeks to recoup all payments unlawfully taken from the approximately 250 West Virginia consumers who were victimized by Armstrong's fraudulent practices.

"It is regrettable that consumers who contacted Armstrong's companies in good faith seeking genuine debt relief were instead charged unlawful fees for virtually no assistance in eliminating their debt," McGraw said in a release. "Instead of helping them to 'achieve a debt free life,' as promised by Armstrong's web site, the overcharges and mismanaged funds compounded consumers' debts through increased interest, late fees, and other charges and also caused long-term damage to their credit ratings."

McGraw's suit also names American Debt Counseling Inc. of Sunrise, Fla., the company that agreed to pay as much as $250,000 to Armstrong for the rights to service the debt management accounts. The attorney general does not allege that the company was involved in the fraudulent scheme, but maintains that they should withhold any payments to Armstrong and not collect any new fees from any West Virginia consumers until all unlawful fees have been refunded.

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