An Erie, Pennsylvania, debt collection agency has been accused of using a bogus "courtroom" and even civilians dressed up as police officers to hold "hearings" where debtors were intimidated into paying off their debts, says Pennsylvania's attorney general.

In a lawsuit filed late last month, Attorney General Tom Corbett accused Unicredit America of "using deceptive tactics to mislead, confuse or coerce consumers - including the use of bogus "hearings" allegedly held in a company office that was decorated to look like a courtroom."

According to a report at ABC channel 4 in Pittsburgh, a sign at West 39th St. in Erie informed visitors that they were at the Unicredit Debt Resolution Center. But once inside, debtors found "a pair of locked oak doors with brass handles resembling a courtroom entrance." Beyond that, the attorney general says, was

[A] fake courtroom allegedly contain[ing] furniture and decorations similar to those used in actual court offices, including a raised "bench" area where a judge would be seated; two tables and chairs in front of the "bench" for attorneys and defendants; a simulated witness stand; seating for spectators; and legal books on bookshelves. During some proceedings, an individual dressed in black was seated where observers would expect to see a judge.

According to the lawsuit, fictitious court proceedings were used to intimidate consumers into providing access to bank accounts, making immediate payments or surrendering vehicle titles and other assets - sometimes dispatching Unicredit employees to consumers' homes in order to retrieve documents or have consumers sign payment agreements.

"This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection," Corbett said. "Consumers also allegedly received dubious 'hearing notices' and letters - often hand-delivered by individuals who appear to be Sheriff Deputies - which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for 'hearings' or 'depositions'."

The attorney-general is seeking $3,000 from Unicredit America for every person over 60 years of age affected by the alleged scam, and $1,000 for all other individuals. News reports indicate prosecutors don't yet know how many people were affected.

The lawsuit was filed in late October, but didn't come to the attention of the national media until this week.

David Dayen at FireDogLake argues that the phenomenon -- if true -- is another sign of "the end of the American dream."

Americans were taught that they could have it better than their parents, through hard work and initiative. And that’s not necessarily true anymore. We have an economic system tilted to the benefit of a several-block radius in Lower Manhattan known as Wall Street. We have a political system bought and paid for by those corporate interests. We have a legal system where power and influence can buy justice. And we have a culture of accountability that’s in tatters. So out of all of that, you get scam artists making fake courtrooms and stealing from people, basically assuming the robes of justice themselves in the absence of any competition.

Attorney General Corbett is petitioning the courts to freeze Unicredit America's assets and stop the company from carrying out debt-collection activities. The hearing for those petitions -- presumably in a real courtroom -- will be held next month.

The following video was broadcast on ABC channel 4 in Pittsburgh and uploaded to YouTube by ThinkProgress.