A recent legal case has brought some very interesting information to light from inside a debt settlement company and the alleged attorney debt settlement firm.
On July 8, 2010, employee, Chris Onorato, filed a lawsuit against ABC Debt Relief, The Debt Answer, Lloyd Ward, PC. Lloyd Ward & Associates, and Lloyd Regner (3:10-cv-0132).
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The allegations made are:
- Plaintiff is employed by Defendants as a debt consultant. Plantiff has been required and/or permitted to work overtime hours but not paid time and one-half for all hours worked over forty (40) hours in a given workweek. Plantiff is paid on a commission-only basis.
- For at least three (3) years prior to filing this Complaint and continuing (hereinafter the “Liability Period”), Defendants have had a policy and practice of not correctly compensating their debt consultants for work performed for the benefit of Defendants over and above forty (40) hours per week, to wit; virtually all debt consultants received a forgivable draw during their first ninety (90) days of employment and a non-forgivable draw per month thereafter.
- Debt consultants, such as Plantiff, qualify debtors for debt settlement plans of Defendants by verifying that the debtor possesses at least ten thousand dollars ($10,000) in debt. Next, debt consultants analyze whether each creditor comprising the ten thousand dollars ($10,000) is owed at least six hundred dollars ($600) and if there are contracts in place between the creditor and Defendants. The debt consultant sets up an account with Defendants for each creditor. Lastly, the debt consultant verifies the debtor’s bank accounts and assists debtor in picking a payment plan.
- Once a plan is chosen, the debt consultant, using Defendants’ guidelines, sets up a monthly draft on the debtor’s bank account whereby Defendants obtains their fee and moneys to satisfy the debtor’s creditors. Eighty-five percent (85%) of Defendants’ fee is collected from debtor’s accounts within the first ninety (90) days. Debt consultants receive a fee from the first monthly draft which is a percentage determined by the total volume of drafts occurring monthly attributable to that debt consultant.
- Debt consultants are required to work a minimum of twelve (12) hours per day but are expected to work as many hours as necessary to reach assigned sales goals at the behest of the Defendants. Accordingly, debt consultants regularly work fourteen to sixteen (14-16) hours per day. – Source
An Employee of ABC Debt Relief Lays Out How Things Are at the Debt Settlement Enterprises
On July 12, 2010 as part of the same case, (3:10-cv-0132) Onorato v. ABC Debt Relief, The Debt Answer, Lloyd Ward, PC. Lloyd Ward & Associates, and Lloyd Regner, Plaintiff Chris Onorato filed documents that show that even he was confused who he worked for an represented. His belief appears to have been that he was working to represent Lloyd Ward’s debt settlement operation which worked closely with The Debt Answer and ABC Debt Relief, in part.
His affidavit says:
- My name is G. Chris Onorato. I am over the age of twenty-one (21), have never been charged or convicted of a felony or misdemeanor involving moral turpitude, and I am fully competent to make this affidavit. I have personal knowledge of the facts set forth in this affidavit, which are true and correct.
- I am the Plaintiff in this case.
- Attached at Tab 1 to this affidavit is a true and correct copy of an email that I received from Khris Devoto on or about December 28, 2009. The email was an offer of employment at “The Debt Answer”.
- After I became an employee, I was assigned different email addresses, including firstname.lastname@example.org and later email@example.com. As discussed below, I was later instructed by my superiors to hold myself out to the public and potential customers as “Senior Debt Analyst, Attorneys at Law, Lloyd Ward & Associates.”
- Attached at Tab 2 to this affidavit is a true and correct copy of two emails that I received from Khris Devoto of “The Debt Answer” on or about February 11, 2010. These emails show the work schedule for the debt consultants.
- Attached at Tab 3 to this affidavit is a true and correct copy of an email that I received from Kylie Britt on or about June 9, 2010. The email concerns an incentive contest for the debt consultants. As shown on page 2 of the email, I was apparently one of the top 10 of the performers at the time, having generated “Total Net Impacts” of 132 and a “Total Net $ of $606,732.00.
- Attached at Tab 4 to this affidavit is a true and correct copy of an email that I sent to a potential customer. The email address that I was assigned and instructed to use by my superiors in order to send this email (and other emails to potential customers) was firstname.lastname@example.org. As stated in my offer letter, I was required to send emails to prospective customers in the course and scope of my employment. In addition, at the end of the email, I put my name and the following title: “Senior Debt Analyst, Attorneys at Law, Lloyd Ward & Associates.” I was instructed by my superiors to use this title and to state that I was communicating on behalf of Lloyd Ward & Associates, Attorneys at Law.
- Attached to Tab 5 of this affidavit is a true and correct copy of an email that I received from Rick Longo on or about July 2, 2010. The email states, in part, that “Per the instructions of Mr. Lloyd Ward comes the following; You are to cease and desist any and all contact with any employees of ABC Debt Relief or the employees of Lloyd Ward and Associates while we review the allegations of your threatened lawsuit.” The email states that it comes from “Rick Longo, CFO” of “ABC Debt Relief Ltd. Co.” and “The Debt Answer LLC.” Also copied on the email are email@example.com among others. I understand that this email address belongs to Lloyd Ward, an attorney.
- Attached at Tab 6 to this affidavit is a true and correct copy of an email chain, which includes an email sent from Anthony Paulmeno to me. As show [sic] in that email, Mr. Paulmeno used the following email address: firstname.lastname@example.org. Similarly, he used a signature block stating: “Anthony Paulmeno, Senior Debt Analyst, Attorneys at Law, Lloyd Ward & Associates.”
- Attached at Tab 7 is a true and correct copy of a computer screen shot taken of a internet web search on the term “abc debt relief” on the Google search engine. One of the first hits is “lloyd Ward & Associates, Attorneys at Law Debt Renegotiation…” and it shows www.abcdebtrelief.com as the associated internet website address.
- Attached at Tab 8 is a true and correct copy of a page from the www.abcdebtrelief.com internet page. Debt consultants were instructed to direct potential customers to this internet site to show them that a law firm, Lloyd Ward & Associates, would negotiate debt settlements on their behalf. As shown on the bottom of the page, the web site page contains a link to the Texas State Bar Website membership directory and the page showing Lloyd E. Ward’s membership status and bar card number. In addition, the internet website page contains a copyright notice for Lloyd Ward & Associates, Attorneys at Law.
- Through counsel, I informed the Defendants that are named in the Complaint that I intended to enforce my rights under the FLSA and other statutes. Almost immediately afterwards, Kevin Devoto, a supervisor, escorted me to the office of Rick Longo, the Chief Financial Officer of ABC Debt Relief and The Debt Answer. Mr. Longo and Mr. Devoto were present during this meeting. Mr. Longo and Mr. Devoto informed me that I was being placed on unpaid “administrative leave.” I requested that Mr. Longo and Mr. Devoto put this decision in writing and was refused. Mr. Long [sic] and Mr. Devoto then informed me that if I did not leave the building immediately they would call the police. I was then escorted back to my desk where Cameron Knox, another manager, placed my personal belonging in a box and then I was escorted out of the building in the view of the other employees, debt consultants, and my other colleagues. I did not agree or consent to being placed on “administrative leave.”
- I have not been permitted back to the office since I was escorted out of the building. I have been prevented from working for any of the Defendants, I have not been able to make any sales, and I have not received any wages or compensation from any of the Defendants while on “administrative leave.”
Since the Filing, More Employees Have Joined the Suit
Since the filing of the complaint three additional employees have come forward to join this lawsuit to “recover unpaid overtime wages and liquidated damages.”
The case was submitted by attorney:
Charles W. Branham, III
Goldfarb & Branham, LLP
Saint Ann Court
2501 N. Harwood Street
Dallas, TX 75201
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