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‘Unfair, deceptive, and abusive’: Baltimore County accountants charged with defrauding customers

Maryland Attorney General Brian Frosh has charged owners of a Baltimore County accounting firm with defrauding customers, accusing Signature Accounting in Cockeysville of “unfair, deceptive, and abusive” business tactics that caused people to lose their vehicles and homes to foreclosure.

Marcia L. Bailey, owner of Signature Accounting, and Arthur Wittenberg, the trustee for the Wittenberg Family Trust in Hunt Valley, collected upfront fees as high as $49,000, then “pocket[ed] the money for their own personal use, resulting in defaulted consumer loans,” Frosh’s office said Tuesday.

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“The allegations against these companies and their owners are serious, resulting in devastating consequences for their clients,” Frosh said. “Operating a business without the required licenses, taking payments from consumers, failing to perform the consolidation work promised, and using clients’ fees for personal benefit are all violations of Maryland’s consumer protection laws.”

The attorney general’s Consumer Protection Division alleged that the business lacked required licenses, did not issue required contracts or other required disclosures, and collected illegal upfront fees. Bailey and Wittenberg are charged with violating the Maryland Mortgage Assistance Relief Act, Credit Services Business Act, Money Transmission Act, and Debt Management Services Act.

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Granville Templeton III, the Baltimore-based attorney representing Bailey, disputed that she or her accounting firm had defrauded anyone — and said she is serving as a cooperating witness “to bring the real culprit to justice, which is Mr. Wittenberg.”

Bailey’s attorney said she was also a victim in this case and her cooperation with authorities “brought a lot of what was happening to light.”

“We’ve provided information every time they’ve asked for it, voluntarily, and encouraged an investigation into the Wittenberg Family Trust and Mr. Wittenberg,” Templeton said in a phone interview. “She never defrauded any one of her clients. Anything defective came from Mr. Wittenberg.”

Wittenberg could not be reached for comment Tuesday.

Circuit Court Judge Sherrie Bailey issued a temporary restraining order last week barring them and their businesses from offering or selling debt-consolidation services in Maryland. A hearing on whether the order should remain in place is scheduled for Friday.

In the filing, Frosh’s office accused Marcia L. Bailey and Wittenberg of “exploit[ing] ... Bailey’s standing in the community as a U.S. Naval Academy graduate and as the owner and operator of Signature Accounting, a self-described ‘full-service accounting firm’ to provide a façade of credibility to their debt consolidation scheme.”

“Respondents falsely represent that Respondent Wittenberg is a wealthy billionaire client of ... Bailey and Signature Accounting,” the filing says, “when in fact ... Wittenberg is not wealthy and has a criminal history for theft, a fact that Respondents do not disclose to consumers.”

The operation claimed to save customers hundreds of thousands of dollars and improve their credit ratings by consolidating and “dissolving” debts, according to the filing. They used company letters, reams of paperwork and news releases containing false claims of Wittenberg’s wealth and accomplishments to lend the company legitimacy, the attorney general’s office wrote.

And they required consumers to direct all debtor communications to Signature Accounting, the filing says.

When customers raised concerns, the firm assured them the debts were being paid, “even after consumers have had vehicles repossessed, foreclosure actions filed against their homes, and their credit scores drop — all due to Respondents’ failure to make the promised payments to consumers’ creditors,” the filing says.

“Respondents represent that such repossessions and foreclosure actions are ‘normal’ during the debt consolidation and dissolution process, and have advised consumers ‘not to worry about it,’” the filing says.

The Democrat filed the state charges against Bailey and Wittenberg in Baltimore County Circuit Court, and an administrative action is scheduled to begin Aug. 11 in the Maryland Office of Administrative Hearings.

Consumers can reach the Consumer Protection hotline at 410-528-8662 or toll-free at 888-743-0023.

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