NYC's Highest Paid Employee - A Predatory-Debt-Collecting Marshal - Made $1.7 Million Last Year
A brand new expose by Bloomberg shines light on modern day loan sharks: city officials that are armed with badges like Vadim Barbarovich, who earned $1.7 million last year, easily giving him the most lucrative job within the government of New York City. His official title is City Marshal, and he’s one of 35 that the mayor has appointed to compete for fees from recovering debts. While traditionally marshals evict tenants and tow cars, Barbarovich has found his place in part of a debt collection industry that allows them to use their legal authority on behalf of predatory lenders.
It’s a practice that dates back to the 17th century. Back then, jobs across the Hudson River for marshals yielded the highest fees. Under current law, marshals are entitled to keep 5% of cash that they collect. The city also has a Sheriff's office that does similar work, but those employees get a salary. Several mayors have called for an end to the marshal system over the last few decades, but nobody has been successful in getting the state legislature to act upon it.
While Barbarovich's jurisdiction is supposed to end at city limits, he has worked to recover debts from places like California and Illinois, among others nationwide.
One person he "recovered" debt money from, to the tune of $56,000, Jose Soliz, asked: “How could they pull all that money? I’ve never even been to New York.”
When asked about Barbarovich's practices, a spokesman for the New York City Marshals Association said that marshals simply "enforce court judgments".
The genesis of these judgments are often lenders who advance money to people at rates that can sometimes top 400% annualized. They have found a loophole around loansharking rules by stating that they are instead buying the money that businesses will likely make in the future at a discounted price. Courts have been supportive of this distinction and, as such, the "merchant cash advance" industry has grown to about $15 billion a year.
As soon as lenders see that borrowers have fallen behind they call marshals, whose job is to force the banks to handover whatever cash is left. They do this by using a court order stamped by a clerk that’s obtained without going before a judge. Banks generally comply immediately, without checking if the marshal has the right to actually take the funds. The borrower often doesn’t understand what’s going on until the money is gone.
Prior to becoming a marshal, Barbarovich worked in property control earning about $70,000 a year and sometimes volunteered as a Russian translator. Upon starting as a marshal in 2013, he earned about $90,000. When cash advance companies discovered the power he had, his income skyrocketed and his earnings increased almost 20 fold.
His financial disclosures show that his work enforcing Supreme Court property judgments skyrocketed dramatically over the last two years, as did the amount of cash he recovered. In some respects, the collection process is like the wild west: marshals don’t draw a salary, earn fees from customers and are encouraged to compete with one another, which can catalyze aggressive behavior.
His financial disclosures show that his work enforcing Supreme Court property judgments skyrocketed dramatically over the last two years, as did the amount of cash he recovered. In some respects, the collection process is like the wild west: marshals don’t draw a salary, earn fees from customers and are encouraged to compete with one another, which can catalyze aggressive behavior.
https://www.zerohedge.com/news/2018-11-28/nycs-highest-paid-employee-predatory-debt-collecting-marshal-made-17-million-last
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