Earlier I reported that Legal Helpers was uninvited from offering services in Minnesota. See this article.
I now have more details on the matter. According to a document signed by Steven Carlson, Deputy Commissioner, Minnesota Department of Commerce, the state laid out the facts as they asserted them in a Cease and Desist order.
Statement of Facts
CDS Client Services, Inc. (“CDS”), Lynch Financial Solutions, Inc. (” Lynch” ), Legal Services Support Group, LLC ( “LSSG”), JEM Group, Inc. (“JEM”), American Debt Services (“ADS”), and Eclipse Financial Services, Inc. (“Eclipse”) (collectively “RESPONDENTS”) are debt settlement services providers as defined by Minn. Stat. $ 332B.02.
Respondent CDS has provided debt settlement services to resident of Minnesota. In particular, CDS has taken up-front and monthly funds from Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay CDS’s fees for achieving such settlements. CDS is not licensed as a debt settlement services provider in Minnesota.
Respondent Lynch has provided debt settlement services to resident of Minnesota. In particular, Lynch has taken up-front and monthly funds f rom Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay Lynch’s fees for achieving such settlements. Lynch is not licensed as a debt settlement services provider in Minnesota.
Respondent LSSG has provided debt settlement services to resident of Minnesota. In particular, LSSG has taken up-front and monthly funds f rom Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay LSSG’s fees for achieving such settlements. LSSG is not licensed as a debt settlement services provider in Minnesota.
Respondent ADS has provided debt settlement services to resident of Minnesota. In particular, ADS has taken up-front and monthly funds from Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay ADS’s fees for achieving such settlements. ADS is not licensed as a debt settlement services provider in Minnesota.
Respondent Eclipse has provided debt settlement services to resident of Minnesota. In particular, Eclipse has taken up-front and monthly funds from Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay Eclipse’s fees for achieving such settlements. Eclipse is not licensed as a debt settlement services provider in Minnesota.
On information and belief, Respondent JEM has provided debt settlement services to residents of Minnesota. On information and belief, JEM has taken up-front and monthly funds from Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay JEM’s fees for achieving such settlements. JEM is not licensed as a debt settlement services provider in Minnesota.
Respondents were or are all affiliated with Legal Helpers Debt Resolution, LLC (“Legal Helpers” ), a respondent in a related matter brought by the Department, OAH Docket NoS. 8-1005-23074-2 AND 8-1005-23075-2. Respondents and Legal Helpers entered into a joint scheme pursuant to which Minnesota residents would sign up for debt settlement services purportedly provided by attorneys working for Legal Helpers, but which were in fact being performed by employees of the Respondents.
In addition to operating as debt settlement services providers without a license, Respondents CDS, Lynch, LSSG, ADS, and Eclipse, and on information and belief JEM, violated a host of Minnesota statutory provisions regulating the conduct of debt settlement providers, including the following:
- Charging fees in excess of those permitted by statute, as codified at Minn. Stat. 332B.09;
- Failing to provide statutorily required disclosures codified at Minn. Stat. 332B.06;
- Making misleading representations to debtors in violation of Minn. Stat. 332B.11, subd. 1; and,
- Failing to respond to requests for information from the Department of Commerce
in violation of Minn. Stat. $ 45.027, subd. la.
You can read the complete cease and desist order here.
In a separate document the State of Minnesota laid out additional details on actions they took issue with regarding the services provided by Legal Helpers Debt Resolution and Minnesota attorney James Agosto.
Statement of Facts
Respondent Legal Helpers Debt Resolution, LLC(” Respondent” ) is an entity headquartered in Chicago, Illinois.
Respondent is not registered as either a debt settlement services provider or as a debt management services provider in Minnesota.
Respondent is engaged in debt settlement services in Minnesota. In particular, Respondent has taken up-front and monthly funds from Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay the Respondent’s fees for achieving such settlements,
While Respondent is affiliated with attorneys, including Minnesota attorney James Agosto, the debt settlement services Respondent purports to provide are not handled by attorneys, but rather by non-attorney employees of Respondent.
In addition to operating as a debt settlement services provider without a license,
Respondent has violated a host of Minnesota statutory provisions regulating the conduct of debt settlement providers, including the following:
- Respondent charged fees in excess of those permitted by statute, as codified at Minn. Stat.) 332B.09;
- Respondent failed to provide statutorily required disclosures codified at Minn. Stat. 3328.06;
- Respondent made misleading representations to debtors in violation o f Minn. Stat.) 332B.11, subd. 1; and,
- Respondent failed to respond to requests for information from the Department of
Commerce in violation of Minn. Stat. $ 45.027, subd. la.
M.R. & L.R.
Married couple M.R and L.R., residents of Minnesota, signed up for Respondent’s debt settlement services in July of 2010.
Respondent’s schedule of fees states that M.R. and L.R.’s checking account would be drafted for $1,146.32 for the first three months of Respondent’s program, and $897.02
thereafter for 48 months.
Respondent’s schedule of fees also stated that of the first 15 payments made by M.R. and L.R. to Respondent, totaling $14,203.20, only $1,797.36 would be used to pay creditors, with the remainder retained by Respondent as fees and costs.
Respondent thereafter drafted M.R. and L.R.’s account for several months.
Respondent failed to respond to requests from M.R. and L.R. concerning the status of their account and any progress made by Respondent in settling their debts.
Respondent provided no information to M.R. or L.R. showing that it settled any debts on their behalf.
M.R. and L.R. continued to receive notices from creditors of actions taken against them, including wage garnishments.
W.T. and T.T.
Married couple W.T. and T.T., Minnesota residents, signed up for Respondent’s debt settlement services in August of 2010.
Respondent drafted W.T. and T.T.’s account for $1,065 per month from July of 2010 through at least January of 2012.
Respondent failed to respond to requests from T.T. concerning the status of W.T. and T.T.’s accounts and any progress made by Respondent in settling their debts.
Respondent provided no information to T.T. and W.T. showing that that it settled any debts on their behalf.
W.T. and T.T. continued to receive notices Rom creditors of actions taken against them, including threats of suit.
W.M.
W.M., a Minnesota resident, signed up for Respondent’s debt settlement services in August of 2010.
Respondent represented that it would significantly reduce W.M.’s debt with his creditors.
Respondent represented that stated that W.M.’s creditors would stop calling once he signed up for Respondent’s services.
Respondent drafted W.M.’s account for at least $7,105.45 between August of 2010 and June of 2011
Respondent failed to respond to requests from W.M. concerning the status of W.M.’s accounts and any progress made by Respondent in settling W.M.’s debts.
Respondent provided no information to W.M. showing that it settled any debts on his behalf.
W.M. continued to receive contact &om creditors, and was served with legal process after signing up for Respondent’s services.
T.M. and K.M.
Married couple T.M. and K.M., Minnesota residents, signed up for Respondent’s debt settlement services in January o f 2011.
Respondent’s schedule of fees states that T.M. and K.M.’s checking account would be drafted for $845.69 for 41 months.
Respondent’s schedule of fees also stated that of the first 21 payments made by T.M. and K.M. to Respondent, totaling $17,759.49, only $7,479.68 would be used to pay creditors, with the remainder retained by Respondent as fees and costs.
T.M. and K.M. paid a total of $9,302.59 to Respondent.
Respondent failed to respond to requests from T.M. and K.M. concerning the status of their account, and any progress made by Respondent in settling their debts.
Respondent provided no information to T.M. or K.M. showing that any debts had been settled on their behalf.
T.M. and K.M. continued to receive notices from creditors of actions taken against them, including wage garnishments.
M.U.
M.U. signed up for Respondent’s debt settlement services in September of 2010.
Respondent’s schedule of fees states that his checking account would be drafted for an initial amount of $500, and $403.57 thereafter for 29 months.
Respondent’s schedule of fees also stated that of the first 18 payments made by M.U., totaling $7,357.29, only $3,3667.06 would be used to pay creditors, with the remainder retained by Respondent as fees and costs.
M.U. paid a total of $3,464.75 to Respondent.
Respondent failed to respond to requests from M.U. concerning the status of his account and any progress made by Respondent in settling his debts.
Respondent provided no information to M.U. showing that any debts had been settled on his behalf.
E.W.
E.W. signed up for Respondent’s debt settlement services in March of 2010.
Respondent’s schedule of fees states that her checking account would be drafted for $1,081.01 per month thereafter for 44 months.
Respondent’s schedule of fees also stated that of the first 33 payments made by E.W., totaling $35,673.33, only $21,308.80 would be used to pay creditors, with the remainder retained by Respondent as fees and costs.
E.W. paid a total of $6,358.56 to Respondent.
Respondent failed to respond to requests from E.W. concerning the status of her account and any progress made by Respondent in settling her debts.
Respondent provided no information to E.W. showing that any debts had been settled on her behalf.
P.B.
[P.B.] signed up for Respondent’s debt settlement services in March of 2010.
Respondent’s schedule of fees states that her checking account would be drafted for $901.57 per month for 42 months.
Respondent’s schedule of fees also stated that of the first 21 payments made by [P.B.], totaling $18,932.97, only $7,765.44 would be used to pay creditors, with the remainder retained by Respondent as fees and costs.
P.B. paid a total of $4,561.60 to Respondent.
Respondent failed to respond to requests from P.B. concerning the status of her account and any progress made by Respondent in settling her debts.
Respondent provided no information to P.B. showing that any debts had been settled on her behalf.
J.J.
J.J. signed up for Respondent’s debt settlement services in May of 2010.
J.J. paid a total of $1,254.86 to Respondent.
Respondent provided no information to J,J. showing that any debts had been settled on his behalf.
N.B.
N.B. signed up for Respondent’s debt settlement services in March of 2010.
N .B. paid a total of $1,254.86 to Respondent.
Respondent provided no information to N.B. showing that any debts had been settled on his behalf.
You can read the full document, here.
Additional Document Names Macey, Aleman, Hyslip and Searns
An additional document from the State names the Chicago law firm and partners that were responsible for Legal Helpers Debt Resolution. This document provides some additional information.
Respondent Legal Helpers Debt Resolution, LLC (“Legal Helpers”) is an entity headquartered in Chicago, Illinois that also operated under the d/b/a Macey, Aleman, Hyslip and Searns.
Respondent was formed by Thomas Macey and Jeffrey Aleman.
Respondent is managed by Macey, Aleman, Jeffrey Hyslip, and Jason Searns attorneys – licensed to practice in states other than Minnesota.
Macey and Aleman are currently the subject of a disciplinary suit brought by the Illinois Attorney Registration and Disciplinary Commission in connection with their formation and management of Respondent. They are charged with breach of fiduciary duties, failure to consult with clients, assisting non-lawyers in the practice of law, failing to supervise nonattorney personnel, collecting unreasonable fees, and other misconduct.
Respondent purports to provide debt settlement services to its customers. The debt settlement services Legal Helpers purports to provide are not handled by attorneys, but rather by non-attorney employees of Respondent and sub-contractors.
Respondent is not registered as a debt settlement services provider or as a debt management services provider in Minnesota.
Respondent is engaged in debt settlement services in Minnesota. In particular, Respondent has taken up-front and monthly funds frorri Minnesota residents, representing that the funds would be used to settle claims with creditors and to pay Respondent’s fees for achieving such settlements. – Source
What makes this document even more interesting is the fact Jeffrey Hyslip has started a new debt relief company, Lifetime Debt Solutions, that makes all sorts of negative comments about debt settlement:
Debt Settlement – It’s all the same, debt settlement, debt negotiation, debt resolution, debt adjusting – they are all different words for the same thing. Basically, it is one of the bankruptcy alternatives that requires you stop paying your creditors to hopefully get them desperate for your money. At the same time you’ll start saving your money (while paying the debt settlement company their, sometimes excessive, fees) to eventually provide the creditors with a settlement offer. In the meantime, its possible that you get sued, harassed, and your credit will likely take a nose dive. Many times debt settlement is like playing Russian Roulette since you never know how the Creditors are going to react. With that said, it is also a useful tool for consumers that are either 100% against or don’t qualify for Bankruptcy. Word of caution, make sure you hire an attorney to do this for you. The industry is filled with slime ball despicable examples of human beings that’ll lie, cheat and misappropriate your hard earned money. If you twist our arms we’ll provide you with debt negotiation services. We’re experienced at doing so and although the risks sometime make our stomachs turn, debt settlement has helped millions of people nationwide. – Source
The Minnesota action continues to paint a picture of consumers that paid tremendous advance fees for debt settlement services and not only did their debt not go away, but the claim is debts were not even settled at all.
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