PARALEGAL AND LAWYER SCHEMES & SCAMS, INCLUDING ‘WE THE PEOPLE’

These are just a drop in the bucket of the thousands of scams suffered on desperate people asking for help (some by attorneys).

LAW SOLUTIONS CHICAGO, UPRIGHT LAW and KEVIN CHERN, PARTNER, SANCTIONED FOR ’UNCONSCIONABLE HARM TO CLIENTS’

greed

Report from the Department of Justice, 2/13/18 – Law Solutions Chicago, doing business as “UpRight Law”,  UpRight’s managing partner Kevin Chern, and affiliated partner attorneys Darren Delafield and John C. Morgan Jr. were sanctioned hundreds thousands of dollars “for causing ‘unconscionable’ harm to their clients”.


The court found that the law firm and its attorneys, “systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme..” said Director Cliff White of the Executive Office for U.S. Trustees.

The court also revoked UpRight’s bankruptcy filing privileges in the Western District of Virginia for not less than five years, and its local partners for 12 and 18 months, respectively. The bankruptcy court also sanctioned Sperro LLC (Sperro), an Indiana towing, ordering turnover of funds.

“Lawyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system,” said Director White. “The damage caused increases exponentially when they operate nationally, like UpRight. This case is demonstrative of the vigorous enforcement actions that the U.S. Trustee Program can and will take to protect all stakeholders in the bankruptcy process.”


Additional articles:

Robbins v. Delafield (In re Williams), 16-7024 (Bankr. W.D. Va. Feb. 12, 2018) Link to court decision…

FLORIDA SUPREME COURT SANCTIONS “WE THE PEOPLE” FOR UNAUTHORIZED PRACTICE OF LAW

FRAUDOn April 29, 2004 the Florida Supreme Court issued its opinion in The Florida State Bar v. We The People. The court found that in five cases employees of We The People had engaged in unauthorized practice law, by advising bankruptcy clients (as well as divorce and will clients) on legal remedies, which forms to prepare and how to prepare them, correcting clients’ errors, and communicating with third persons such as adversary parties on behalf of the clients, notwithstanding that WTP hired a licensed Florida attorney to provide legal advice to their customers. The Court enjoined WTP from any such activities, and assessed $9,000 in sanctions. The Florida Bar v. We The People Forms and Service Center of Sarasota, Inc. et al. No. SC02-1675

The above is just a few examples of the numerous problems with “We the People” and others who have been sued for fraud and more. Do an Internet search before hiring anyone, including lawyers.

AMERIDEBT and NCO GROUP, INC, NCO FINANCIAL SYSTEMS & NCO PORTFOLIO MANAGEMENT, INC.

More problems with consumer credit counseling companies – including AmeriDebt – filing for bankruptcy and charged with fraudulent activities.

NCO Financial Systems, Inc. and NCO Portfolio Management, Inc. fined $1.5 million FOR VIOLATIONS OF FAIR CREDIT REPORTING ACT. In order to resolve claims of illegal conduct, per a consent judgment filed in the U.S. District Court for the Eastern District of Pennsylvania May 12, 2004, a major debt collector will refrain from future violations of the Fair Credit Reporting Act and will pay a $1.5 million civil penalty (U.S. v. NCO Group, Inc., E.D. Pa., No. 992-3012, 5/12/04).

The complaint, filed by the Justice Department, at the request of the Federal Trade Commission, alleged that NCO Group, Inc. and affiliates (NCO Financial Systems, Inc.; and NCO Portfolio Management, Inc.) reported incorrect information about consumer accounts to credit bureaus in violation of Section 623(a)(5) of the FCRA and Section 5 of FTC Act.

UTAH CREDIT COUNSELING SERVICE SHUT DOWN

Consumers who relied on Consumer Credit Counseling Service of Utah to handle their debt payments are being urged to contact creditors directly after the Utah Division of Consumer Protection temporarily shut down the agency Tuesday.

Participants in CCCS debt-management programs each month paid the nonprofit organization what they owed for all their bills. CCCS then forwarded payments to creditors from a trust account. The state is investigating why the trust account did not have enough money to pay all its clients’ bills. SOURCE: Knight-Ridder / Tribune Business News

SENATE REPORT RAISES CONCERNS ABOUT CREDIT COUNSELING COMPANIES (3/2004)

According to a report issued late March by the Senate Governmental Affairs Committee’s Permanent Subcommittee on Investigations staff, the business model for the traditional nonprofit credit counseling company has changed significantly with many newer entities generating profits from for-profit subsidiaries. The report resulted from an investigation to determine the state of the credit counseling industry and to explore viable solutions to remedy problems.

In the report, entitled Profiteering in a Non-Profit Industry: Abusive Practices in Credit Counseling, many of those new organizations are “using a for-profit model designed so that ‘their nonprofit credit counseling agencies generate massive revenues for a for-profit affiliate for advertising, marketing, executive salaries, and any number of other activities other than actual credit counseling. The new model looks to the consumer to provide those revenues.” Staff concluded this model resulted in “increased consumer complaints; such as excessive fees, nonexistent education, poor service and generally being left in worse debt than when they initiated their debt management program.”

According to the report, there is little uniformity in industry regulation with their currently being various professional, state, and federal standards; some being mandatory, others are voluntary.

The subcommittee staff offered the following findings and recommendations: * some credit counseling agencies are engaged in abusive practices hurting debtors, including charging excessive fees, putting marketing before counseling, and providing debtors with inadequate educational, counseling, and debt management services; * some nonprofit credit counseling agencies are funneling millions of dollars each year from debtors to insiders and affiliated for-profit businesses, possibly violating tax laws prohibiting tax-exempt charities from benefiting private interests; * as part of ongoing efforts to halt abusive practices in the credit counseling industry, major creditors should review and strengthen their standards for credit counseling agencies with whom they do business; * the FTC and IRS should accelerate their enforcement efforts to review suspect credit counseling agencies and take appropriate action against agencies and other who are violating restrictions on tax exempt entities or engaging in deceptive or unfair trade practices-and should consider coordinating with state enforcement agencies to make efficient use of government resources; * the Senate should consider modifying credit counseling provisions in the pending bankruptcy legislation to strengthen protections against abusive practices, including determining whether a single authority, the U.S. bankruptcy trustee, should issue a central list of qualifying credit counseling agencies to provide counseling to bankruptcy petitioners and whether credit counseling fee limits would be appropriate; and * the Senate should consider a bill, either modeled on the Debt Repair Organizations Act of 1996 or expanding that law’s application to reach nonprofit entities, to strengthen protections against abusive practices in the credit counseling industry.

The staff report noted: When profit motive is injected into a non-profit industry, it should come as no surprise that harm to consumers will follow. Indeed, the primary effect of the ‘for-profit model has been to corrupt the original purpose of the credit counseling industry-to provide advice, counseling, and education to indebted consumers free of charge or at minimal charge, and place consumers on debt management programs only if they are otherwise unable to pay their debts. Some of the new entrants now practice the reverse-provide no bona fide education or counseling and place every consumer onto a debt management program at unreasonable or exorbitant charge. The subcommittee staff’s full report.

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