The Johnson Law Group of Nevada, not to be confused with the Johnson Law Group of Florida, are apparently having a bit of a tiff with their debt settlement marketing agent, Elimadebt of Florida and New York. Actually that would be Elimadebt USA, LLC from Florida and Elimadebt, LLC from New York. From this point out let’s just please consider the Elimadebt’s the same company, which they are essentially claimed to be. Now don’t get confused with Elimidebt, that’s a whole different company with their own issues.
So here is the lowdown on the Johnson Law Group issue. From reading the lawsuit by Elimadebt against Johnson Law Group, Advanced Client Solutions, KK, Paul Constantinou, Anan Mark Eldredge, Dan Demonte, Chris Pezzullo, Janna Salcedo, Jackie Stevens, Tom Ruscetta, Bert Bossman, Michael Lee, and Chris Durn you get the distinct impression that the honeymoon is over between these folks, Elimadebt and Johnson Law Group.
So let’s see if I can summarize this case and give you all the juicy bits. So Elimadebt, which consists of Stephen Drescher, Robert Denton, Ryan Sasson, Ian Behr, David Feingold, and Daniel Blumkin, collectively known as the Elimadebters decide to perform diligent research using the internet website of debt settlement industry’s professional association known as “The Association of Settlement Companies” (TASC), in order to locate a reputable company to associate with regarding Elimadebt providing sales, marketing, and pre-qualification of potential clients, which resulted in their speaking with Nicholas De Segonzac, who is the former president of TASC, and David Leuthold, who is the current vice-president of TASC.
One of the Elimadebt managers had done business with a competitor firm, which created a conflict of interest with the former president and vice president, who thereafter referred Elimadebt to the Johnson Law Group in Nevada, KK and Paul Constantinou, who is the Johnson Law Group business development manager. The Elimadebt boys boarded an airplane and flew to beautiful Las Vegas, hopefully took in a show or two, but met with Johnson Law Group team and KK.
Long story, short, everyone fell in love and an agreement was born where Elimadebt would sell debt settlement marketing services and send the clients to Johnson Law Group for $1,500 per ‘packet’ and get paid $100 per month per debt settlement package for 15 months. Elimadebt would also get $500 per packet for a “Personal Financial Analysis Form Packet’, whatever the heck that is.
So the agreement between Elimadebt and Johnson Law Group said that Elimadebt would provide sales, marketing, and pre-qualification of clients who were subsequently “live transferred” to the Johnson law Group for their approval and enrollment into the Johnson Law Group program. There was never anything stated that Elimadebt had to send Johnson law Group a minimum number of clients per month to remain friends.
It was a bit of a sweet deal since Elimadebt would get their full $1,500 “finders fee” from the Johnson Law Group even if the client bailed or was dropped by Johnson law Group. And guess what happens. Wait for it, wait for it.
Elimadebt even paid for the Johnson Law Group compliance director, Kevin Rice, to fly to the Elimadebt New York in August, 2008 and have a nice stay at the Radisson while he observed the operation and trained all the smiling Elimadebt faces there.
Kevin Rice was to train the Elimadebt staff on the correct protocol and standards the the Johnson Law Group required. It is alleged that Kevin Rice trained the Elimadebt staff on the Johnson Law Group specific complaince guidelines, he spoke to some of the Elimadebt customers and heard voice broadcasting messages (I assume those are robocall messages) to check them for compliance.
It is alleged Kevin Rice was made aware that Elimadebt was going to use a third party dialer to deliver the robocalls. That third party dialer was to reach out to clients not on the “Do Not Call” list, the subject of a future story. Kevin Rice said everything looked hunky-dorry and off he went back to Las Vegas, baby.
So Elimadebt launches the marketing campaign and spends about $100,000 per month on marketing and overhead. And then something wasn’t quite right. The antenna at Elimadebt went up. They became aware of perceived cash flow problems at Johnson Law Group as there were an unusually high number of customer complaints involving people who Johnson Law Group had accepted into its program and Johnson Law Group had a high attrition rate.
Many customers it is said were dropped with no reason given and clients were unhappy with Johnson Law Group because they were having money drafted from their banks with no prior approval of the client or even before the client had received a welcome packet or even signed a contract authorizing the debits. Elimadebt claims they tried to make clients happy after clients called Elimadebt and said Johnson Law Group would not answer or return their calls or they were promised refunds that never came.
In fact I’ve seen a list of dropped clients by Johnson Law Group and the reasons given were varied. Here is a sample:
- Debit Returned
- Debit Returned NSF
- Dropped – No reason given
- Dropped – Can’t afford program
- Dropped – Working with attorney
- Dropped – Not enough debt
- Dropped – Circumstances have changed
- Dropped – Client doesn’t want to ruin credit
- Dropped – No Money
- Dropped – Went with different company
- Dropped – Payment stopped
- Dropped – Can’t afford program
- Dropped – Staying with program already in
- Dropped – Lack of communication
- Dropped – Not happy with program
- Dropped – Not ready for this
- Dropped – Not in best interest
- Dropped – Not comfortable with our service
- Dropped – Found a cheaper program
- Dropped – Save credit score
- Dropped – Not comfortable with our service
- Dropped – Refinancing wants to save credit
- Dropped – Program takes too long
- Dropped – Can’t help him with HSBC card
- Dropped – Work is slow
- Dropped – Having second thoughts
- Dropped – Misinformed
- Dropped – Not comfortable
- Dropped – Doesn’t want our services
- Dropped – Filing bankruptcy
- Dropped – Doesn’t like terms
- Dropped – Garnishment of wages
- Dropped – Husband doesn’t want to ruin credit
- Dropped – Doesn’t authorize anything
- Dropped – Wants to save credit
- Dropped – Unaware she was in program
- Dropped – Not comfortable with contract
- Dropped – Payment stopped
The list I saw had about 850 dropped clients on it and most of them appear to have been for NSF or returned debits. It is claimed that approximately 30% of the Johnson Law Group approved customers referred by Elimadebt were dropped for reasons of having non-sufficient funds without proper notice being given to the client.
Around this time things really started to fall apart. Elimadebt wasn’t happy since they were now only sporadically getting paid by Johnson Law Group. Elimadebt claimed to be owed $40,000 from Johnson Law Group and only get $30,000. Or be owed $30,000 but get $22,000.
The Johnson Law Group wasn’t happy either. In fact it is alleged that Johnson Law Group claimed that Elimadebt had breached the contract by directly contacting clients and by pulling too many credit reports.
So it is said that an Elimadebt attorney gets on the phone at this point and ruffles a few feathers at Johnson Law Group by calling the corporate counsel instead of KK directly. KK is reported to have told the Elimadebt attorney, Andrew Schwab that Johnson Law Group “Will bury [Elimadebt]” if they attempt to collect its monies that are due and owing.
Now the love loss really begins. Elimadebt appears to be really pissed off and comes out with a doozy of a claim. Elimadebt says that Johnson Law Group continues to withdraw client funds each month with the first three months going strictly towards the Johnson Law Group fees. Meanwhile Johnson Law Group have effectively undertaken no efforts to reduce the debts of their clients, while continuing to charge for services allegedly rendered. Quite regularly, it is said, the clients contact Johnson Law Group after several months based upon the fact that minimal to no work has been performed on their account. It is said in a sworn document that at that time Johnson Law Group was indifferent as to whether the clients’ continue their representation, becuase the bulk of their fees have already been debited from their accounts. Now that’s a bitch slap.
This comes to that and the pissing contest turns into a lawsuit with Elimadebt claiming to be owed $1,200,000.00 in referral fees that Johnson Law Group has not paid.
Now, a while latter Johnson Law Group decides its really had enough and they sue Elimadebt and bring out a bunch of stuff that I bet the Elimadebters wish had stayed buried.
In the complaint, Johnson Law Group with Advanced Client Solutions says that Elimadebt Stephen Drescher was the CEO of Biltmore Securities, Inc and Biltmore was an entity formed and used by Drescher and others to commit securities fraud. Drescher was indicted, convicted and served time and a period of probation for securities fraud. Drescher was stripped of his license and is now using surrogates and “straw men” to be involved in Elimadebt. Drescher was a major investor in Elimadebt. Snap!
Robert Denton, the guy that signed the marketing agreement on behalf of Elimadebt with Johnson Law Group, well it is claimed he was associated as a registered representative with Biltmore Securities. The Securities and Exchange Commission was none too happy with his performance at Biltmore and as a result of his conduct did bar him from association with any broker, dealer, municipal securities dealer, investment company or investment adviser. The claim, Denton engaged in acts, practices and a course of business which would and did operate as a fraud and deceit. Denton is the managing partner and co-owner of Elimadebt. Nice!
Ryan Sasson happens to be the stepson of Stephen J. Drescher. Ahh. Bingo!
Ian Behar gets off relatively easy. it is claimed he is in charge of the day-to-day operations and he is a principle decision maker.
David Feingold it is said has control over the activities that Elimadebt engages in. He is a Florida lawyer and subject to Cease and Desist order by the Maryland Commissioner of Financial Regulations. He was also the subject of a Securities and Exchange Commission action resulting in a cease and desist in connection with his violations. The Maryland order said he needed to “immediately cease and desist from engaging in any further credit services business activities and/or foreclosure consultant activities with Maryland residents, including contracting to provide, or otherwise engaging in, loan modification, loss mitigation, foreclosure consulting, or similar services with Maryland residents, and that the Respondents are prohibited from engaging in any other mortgage lending or origination activities with Maryland residents. Source
Let’s just say that if you read the Johnson Law Group suit against the Elimadebters, you get the impression Johnson Law Group was not happy. You can read it for yourself if you want.
And while you are at it and you want to read the hundreds of pages of other documents that go with this mess, here are the other case numbers if you know how to look these things up. 2:2009cv00638, 9:2009cv80647, 9:2009cv81331.