Farmingdale Man Admits Receiving Kickbacks from Collection Agency

A Farmingdale man pleaded guilty in federal court Friday in a kickback scheme to defraud lenders, investors and clients.

Michael Gesimondo, 57, of Farmingdale, waived his right to an indictment and pleaded guilty to the charges before a federal judge in Bridgeport, Conn., said Deirdre M. Daly, United States Attorney for the District of Connecticut.

Gesimondo admitted to receiving kickbacks while he was an executive at Washington Mutual Bank.

According to court documents and statements made in court, Oxford Collection Agency was a private financial services company that engaged in accounts receivables management, primarily debt collecting, with offices in New York, Pennsylvania and Florida.

Between 2007 and 2011, Oxford Collection Agency executives engaged in a multi-year scheme to defraud its lender, investors and clients. The investigation also revealed that Oxford Collection Agency was actively involved in bribing bank officials.

Gesimondo was employed as Collection Manager of Business Banking at Washington Mutual Bank and was in charge of outsourcing collection accounts to collection agencies. Washington Mutual Bank contracted with the Oxford Collection Agency to collect debts owed to it by consumers. 

Between May 2008 and May 2009, Gesimondo received kickbacks from Oxford Collection Agency as a reward for providing Oxford Collection Agency with the bank’s debt collection business, often providing Gesimondo with a percentage of the collected debt amount.

Washington Mutual Bank received funds through the Troubled Asset Relief Program (TARP). The savings bank collapsed and was seized by the federal government in 2008.

Gesimondo pleaded guilty to one count of conspiracy to accept money as a
reward in connection with a business transaction of a bank, federal agents said.

U.S. District Judge Stefan R. Underhill in Bridgeport scheduled sentencing for April 4, at which time Gesimondao faces a maximum term of five years in federal prison.

Seven other individuals have been convicted as a result of this investigation and
prosecution of criminal activity arising from Oxford Collection Agency and the debt collection industry.

This ongoing investigation is being conducted by the Internal Revenue Service, the FBI and other federal agencies. The case is being prosecuted by Assistant U.S. Attorney Liam Brennan and Special U.S. Attorney John McReynolds.