A Buffalo-based company with an office in Jamestown has been ordered to pay nearly $125,000 in back wages, fines and damages.

Jose Melendez and Urban, Heidenreich, Melendez and Associates LLC, also referred to as Cash Group Southern Tier, were recently found to be in violation of sections of the state Labor Law mandating the state’s minimum wage and to prevent wage theft. The company had an office at 1800 Washington St., Suite 5, Jamestown.

The company was ordered by the state labor commissioner to pay $25,948.69 in wages owed to 22 employees of Cash Group Southern Tier’s office in Jamestown, $18,160.94 in interest on the wages owed to the employees, liquidated damages of $6,487.17, and a civil penalty of $73,897.38. The order was issued on Sept. 1 and is final because the time for administrative or judicial review has expired.

“It further appearing that after due notice of said order and demands for payment having been given to the employer, and the employer has defaulted and has failed to make full payment as required therein, that the sum of $124,494.18 remains outstanding and that the time for such payments as provided by law has expired,” the order, filed in state Supreme Court in Mayville, states≥

Employees were due between $500 and $2,500 each for violations over a three-month period in 2015.

OTHER ALLEGATIONS

In October 2018, former state Attorney General Barbara Underwood filed charges jointly with the Federal Trade Commission against Robert Heidenreich and the six firms he controls, including Urban, Heidenreich, Melendez, and Associates LLC for what the government claims were deceptive and abusive tactics.

According to the complaint, Heidenreich managed as many as four offices where employees made repeated calls to consumers to collect on alleged debts, and frequently moved these offices. The complaint says he instructed employees to use a variety of unregistered fictitious business names in interacting with consumers.

The companies, Underwood wrote, use a variety of false, deceptive and abusive tactics that allegedly violate federal and state law, including pretending to work at a county sheriff’s office or pretending to be a process server. The state alleged Heidenreich’s employees made false or deceptive threats to consumers to pressure them into paying debts.

“Defendants’ employees, for instance, falsely tell consumers that they are about to be arrested, have committed crimes, or are about to be sued or served with legal papers because of their failure to pay an alleged debt,” Underwood wrote. “Consumers are then told they can resolve these fabricated exigencies by making payments on debts Defendants claim are owed. To help coerce these payments, Defendants’ collectors frequently inflate the amounts they claim consumers owe by hundreds or even thousands of dollars. Defendants’ employees also pressure consumers by calling their employers and family members about the alleged debts and use profanity and other abusive language during collection calls with consumers.”

Underwood said the companies also unlawfully called employers and family members about consumers’ alleged debts, used profane or abusive language in phone calls and misrepresented facts. The lawsuit seeks a civil penalty of $5,000 for each violation of New York’s General Business Law.

A preliminary injunction order was given by Judge Lawrence Vilardo, federal district judge, in December 2018 ordering Heidenreich and his companies from misrepresenting facts, trying to collect a debt from a consumer that the consumer does not owe, collecting or attempting to collect a debt that the companies don’t have a right to collect, communicating with a person other than the consumer, the consumer’s attorney or other people legally allowed to be contacted by a debt collector; from using obscene language when trying to collect a debt; threatening to take action that is not lawful or that the company doesn’t intend to take; using any false representation to collect a debt or to get information about a consumer; threatening to talk about a consumer’s claim with the consumer’s employer before obtaining a final judgement against a consumer. Vilardo also froze the companies’ assets, ordered Heidenreich’s companies to prepare and deliver financial statements and IRS forms for each individual and corporate defendant, and to preserve company records. Company officials also were prevented from creating, operating or exercising any control over new businesses without providing the state and federal government and an appointed received with the name of the new business entity, address and telephone number, names of employees and description of the business’ intended activities.