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Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non-Attorneys and Committing Fraud

For some reason I am suddenly getting flooded with information regarding Legal Helpers Debt Resolution. Here is what just arrived. A tipster (send in your tips here) forwarded me a copy of a recent filing by Geraci Law in Chicago, Illinois that has filed a grievance with the office of lawyer regulation in Wisconsin. The grievance is against William K. Murphy and Legal Helpers Debt Resolution.

From the wording of the letter this is not the only such complaint that has been filed and informed sources indicate this may not be the only state in which complaints have been filed against attorneys.

Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non Attorneys and Committing Fraud

Here is another example of pure fraud. Mr. and Mrs. [redacted] had 78K in unsecured debt, and these attorneys took $3,892 from them, between June and October 2010, under the guise of a “debt settlement program” that was never going to work.

Their advertising is totally false, and the letter they sent does not comply with Wisconsin rules. Nor does their fee agreement. Fees were “upfront” without doing anything except one letter, unearned fees were not accounted for, refunded, or kept in trust, and according to internet reports this is a nationwide scam that is netting them millions a months[sic]. They are fee-splitting with non-attorneys and committing fraud.

Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non Attorneys and Committing Fraud
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In fact an additional document included in the information I received did identify a second consumer that had a complaint submitted as well. You can see that letter above.

The complaint seems to have caught the fact that the Legal Helpers bankruptcy operation was running commercials saying “debt resolution does not work” while Legal helpers Debt Resolution was selling debt resolution services. You can watch a similar commercial here.

The grievance filed alleges a number of serious violations of Attorney Disciplinary rules including:

  • Conflict of interest and self-dealing
  • Sharing fees with non-lawyers
  • Fraudulent representations
  • Failure to hold client funds in IOLTA account, or even in a trust account
  • Failure to notify of fee arbitration rights
  • Excessive fees
  • Failure to refund unearned fees
  • Practice of law by non-lawyers
  • Practice of law in Wisconsin by unlicensed attorneys
  • Fee splitting
  • False advertising
  • Violation of duty of honesty.

At the time this article was published I had not heard back from Attorney Geraci or the Supreme Court of Wisconsin with an update.

What is interesting is that in Wisconsin William Murphy is listed as being an attorney with Legal Helpers, PC, a separate company that promotes bankruptcy, (source) but on the Legal Helpers Debt Resolution letterhead he is listed as a partner of Legal Helpers Debt Resolution as well which talks down bankruptcy and promotes debt settlement.

Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non Attorneys and Committing Fraud
Click on image for a larger view.

Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non Attorneys and Committing Fraud
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Lawyer Accuses Legal Helpers Debt Resolution of Fee Splitting with Non-Attorneys and Committing Fraud by

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Errick

    I’m sure you’re right, he seems very upset about his competition, but that doesn’t mean the complaint is not valid.

  • Eric Southward

    Geraci is Legal Helpers’ largest competitor in Chicago and Milwaukee. I’m sure that has nothing to do with his complaint.

  • http://profiles.google.com/eric.southward Eric Southward

    Geraci is Legal Helpers’ largest competitor in Chicago and Milwaukee. I’m sure that has nothing to do with his complaint.

    • Errick

      I’m sure you’re right, he seems very upset about his competition, but that doesn’t mean the complaint is not valid.

  • Ymsal

    Thats what ive been saying this whole time LHDR is too big to Fail

  • Errick

    Maybe LH is in trouble or maybe it’s not, but it won’t be the Wisconsin Bar who takes them out. Or any other state bar. Their performance is measured by the number of prosecutions and sanctions they get. There is no reason to take on LH when for the same effort you can get twenty regular lousy lawyers, ones without the resources to defend themselves.

    It is a soon-to-be-poorly kept secret that state-sanctioned lawyers are disproportionately new, poor, immigrant, and minority lawyers. The easiest targets. Not the well funded ones.

    They will figure out a way to avoid this case. And I’m sorry to have to mention this but it’s true, not too many Yale or Harvard grads among the state bar regulators either. Not the sharpest pencils in the cup for sure.

  • Scenario

    LHDR won’t be around for more than a year. The main vulnerability of the LHDR ponzi scheme is that all the troops are depending on a few greedy lawyers at the very top of the pyramid. As soon as Macey, Hyslip, Searns & Aleman take their money and run (or get disbarred), say sianara to all the underling minions that thought they were cruising in first class on the LHDR Titanic.

    To LHDR’s credit, there are likely some decent firms in their network, but their model is allowing a bunch of the unscrupulous dirt-bag companies to continue running. It’s bad for the industry and its real bad for the consumer. When their servicing companies start going out of business, it’s going to be a real train wreck, and the FTC knows it, and is being strategic in its resolve to squash it. The very fact that LHDR Companies have to pay into a fund reserve for regulatory problems is a joke, and it’s exactly what will keep the regulators banging on LHDR’s door until they surrender and cry mercy. There are a lot of people that are very encouraged to see that the states, the regulators, consumers, the industry, and competitors are all standing together on this issue.

  • Scenario

    LHDR won’t be around for more than a year. The main vulnerability of the LHDR ponzi scheme is that all the troops are depending on a few greedy lawyers at the very top of the pyramid. As soon as Macey, Hyslip, Searns & Aleman take their money and run (or get disbarred), say sianara to all the underling minions that thought they were cruising in first class on the LHDR Titanic.

    To LHDR’s credit, there are likely some decent firms in their network, but their model is allowing a bunch of the unscrupulous dirt-bag companies to continue running. It’s bad for the industry and its real bad for the consumer. When their servicing companies start going out of business, it’s going to be a real train wreck, and the FTC knows it, and is being strategic in its resolve to squash it. The very fact that LHDR Companies have to pay into a fund reserve for regulatory problems is a joke, and it’s exactly what will keep the regulators banging on LHDR’s door until they surrender and cry mercy. There are a lot of people that are very encouraged to see that the states, the regulators, consumers, the industry, and competitors are all standing together on this issue.

    • Errick

      Maybe LH is in trouble or maybe it’s not, but it won’t be the Wisconsin Bar who takes them out. Or any other state bar. Their performance is measured by the number of prosecutions and sanctions they get. There is no reason to take on LH when for the same effort you can get twenty regular lousy lawyers, ones without the resources to defend themselves.

      It is a soon-to-be-poorly kept secret that state-sanctioned lawyers are disproportionately new, poor, immigrant, and minority lawyers. The easiest targets. Not the well funded ones.

      They will figure out a way to avoid this case. And I’m sorry to have to mention this but it’s true, not too many Yale or Harvard grads among the state bar regulators either. Not the sharpest pencils in the cup for sure.

      • Ymsal

        Thats what ive been saying this whole time LHDR is too big to Fail

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