GLENDALE : City Sues Collection Agency for $1 Million

Glendale officials have filed suit against owners of a Montrose collection agency and other businesses, claiming the agency bilked the city out of more than $1 million in fees during a three-year period.

The suit, filed Thursday in Glendale Superior Court, seeks $1 million in damages from Commercial Collection Service and its operators, John William Parker Sr. and his sons, John William Parker Jr. and George Parker, according to court records.

Also named as defendants are John William Parker Jr.’s wife, Carole B. Parker; Cynthia Lou Barron, an ex-employee; First American National Bank; and Glendale Merchants Assn., California Medical Commercial Collection Service, J.A. Hillegass & Associates and Parker Management Service--all firms believed to have ties with Commercial Collection.

The city of Glendale, which runs its own power and water service, had been contracting with the Montrose collection agency since 1968 to collect on overdue utility bills. Glendale and the agency had agreed to split the overdue fees after they were collected.

According to the complaint, Commercial Collection defrauded the city between 1989 and 1992 by reporting that customers had sent overdue payments directly to the city and then billed the city to recover a share of those fees. The complaint alleges that overdue bills were never collected.

Barron--believed to have been a collection employee at the time--allegedly told city officials of the scheme on Sept. 22, 1992, when officials asked about one of the bills. City officials said they ended their contract with Commercial Collection the next month.

City Atty. Scott H. Howard also alleges in the complaint that Commercial Collection’s operators deposited more than $1 million of the city’s money into a First Interstate Bank account.

The city says John William Parker Jr. and his wife spent $375,000 of it buying a house in Ketchum, Ida. The rest allegedly was placed into an account at First American National Bank in Chandler, Ariz.

Assistant City Atty. Vivien Ide declined to comment on the suit, citing city policy. It has yet to be served. None of the defendants could be reached for comment Friday.