New York City's municipal debt collectors have forged an unholy alliance with sleazy subprime lenders

New York City's "marshal" service is a throwback to the Dutch colonial days; the 35 marshals are appointed by the mayor, draw no salary, and earn their livings by skimming a percentage off of the debts they collect, operating with impunity and reaching around the world.

The most prolific and successful NY marhsal is Vadim Barbarovich, who earned $1.7 million last year, making him New York's best-paid municipal employee. Barbarovich grew his income to such untold heights by partnering with internet-based "cash-advance" companies -- these are business lenders who circumvent loan-sharking limits on interest rates by characterizing their loans as buying a heavily discounted interest in the future earnings of a company.

NY marshals can obtain "court orders" requiring banks to turn over their targets' savings without ever appearing in front of a judge or providing evidence of a genuine debt. These are not enforceable outside of New York City, but victims of NY marshals say theyhave made a practice of hitting out-of-town banks (and in-town branches of banks to get at out-of-town customers), partnering with cash-advance companies to rake in millions, reaching into the bank accounts of distant American small business owners and simply cleaning them out, leaving them to scramble or go bust.

Barbarovich now employs both his father and his daughter to help in the family business, and he's increased his income 20-fold since he started as a marshal in 2013.

He's got competition: retired police lieutenant Stephen Biegel is also a favorite of cash-advance lenders, and last year, he made $786,418. Read the rest