Rasputin Owner Michael Levitis Pleads Guilty To Stealing $2.2 Million From Desperate Victims

First he denied the charges. Then he claimed he was a victim. Now former Rasputin owner Michael Levitis has come clean, admitting to scamming nearly $2.2 million from more than 1,200 cash-strapped victims who turned to him for help.

Levitis and the debt-relief company he ran, Mission Settlement Agency, pleaded guilty in Manhattan federal court yesterday to fraud charges, admitting to his role as the scheme’s mastermind.

“Michael Levitis and his company, Mission Settlement Agency, preyed on the desperation of financially struggling people across the country. Today’s guilty pleas ensure that the defendants who falsely offer debt relief, telling their victims a pack of lies in order to line their own pockets, will be held to account,” said Manhattan U.S. Attorney Preet Bharara in a statement.

As part of the plea deal announced yesterday, Levitis agreed to forfeit $2.2 million to the government to pay back victims. He faces between seven and 11 years in prison when he’s sentenced this August.

Levitis and three others were cuffed in May 2013 for operating a debt settlement company that prosecutors said took millions of dollars in fees for services never rendered.

Mission Settlement claimed to help customers struggling with credit card and bank debt by helping them reach settlements that could cut the amount owed. But while Mission collected payments from their indebted clients, they never paid down their debts. From mid-2009 to March 2013, more than 2,200 customers paid nearly $14 million, of which only $4.4 million went to creditors, according to the criminal complaint.

The company kept $6.6 million for itself as fees. As many as 1,200 of the clients paid $2.2 million in fees without “a single penny” reaching their creditors.

Prosecutors said Levitis took the money and used it to live a luxurious lifestyle, paying down his own debts on Raputin Restaurant (2670 Coney Island Avenue), lease two luxury cars, and paid off his mother’s credit card bills.

He also misled clients, with the company claiming in sales pitches that he was affiliated with the federal government and a leading credit bureau, none of which was true, according to prosecutors.

The others involved in the scheme all turned tail and pleaded guilty in August 2013, with at least one of them ratting out his former boss as the mastermind.

“I followed instructions from Michael,” Mission’s former vice president of sales, Denis Kurlyand, told the Daily News after the plea deal.

Levitis stood fast, though, insisting on his innocence and said he was a victim of government neglect. He pleaded not guilty and claimed that he had attempted to tip off authorities to malfeasance by “rogue employees,” but that his warnings fell on deaf ears.

After his arrest, prosecutors filed papers to seize approximately 40 bank accounts connected to Levitis, as well as Rasputin Restaurant and two properties he owns in Manhattan Beach.

It’s the second time in four years that he’s been in hot water.

Back in 2010, Levitis was charged with lying to federal agents after he got caught up in a bribery case involving former State Senator Carl Kruger.

Levitis told a fellow nightclub owner, who was secretly recording the conversation for the FBI, that he had an inside line to the state pol, and could assist him with a liquor license issue if he steered thousands of dollars to Kruger – with a kickback for Levitis’ role in setting it up.

As the case moved forward, Levitis’ claim that he had influence in Kruger’s office began to unravel, and Levitis, who is also an attorney, later pleaded guilty to lying to federal agents, sentenced to three years probation and fined $15,000.

In April 2013, Levitis was also hit with a six month suspension of his license to practice law – retroactive to January 2012 – for his role in the case.

Levitis, who along with his wife Marina and mother Eva – who owned Mission Settlement on paper – were  co-stars of Russian Dolls, a failed Lifetime reality series canceled less than two months after its premiere.

The case against Levitis and Mission is being hailed as historic, as it’s the first criminal referral from the U.S. Consumer Financial Protection Bureau, an agency established after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB is also bringing civil charges against Mission, Levitis and others.

Levitis may still face criminal tax violations, according to the plea deal.