I just love the Collections & Credit Risk magazine and website. Those folks over there hold no punches when it comes to the collections and debt relief industry problems.
A recent article by Darren Waggoner reminded me of a string of past events surrounding a debt relief company New Life Financial that had been operating someplace out of the U.S. and/or Canada. The enterprise had hit my radar back in 2011 and eventually led to an untimely end.
What I remember most about the string of companies was one employee who spoke up and blew the whistle the call centers were located in Montreal when the companies claimed to be in the U.S. When that fact came to light the employee was threatened to be sued. However, it didn’t take a rocket scientist to figure that out since the Canadian operation was running online advertisements for job openings there.
As CCR reported, the case seems to be over yet again as the Defendants in this case, the New Financial folks, lost on appeal. As CCR said Debt Relief Scammers Must Pay $5.7M.
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The interesting part for me was something stated in the appeal. In the appeal opinion, linked below, it seems like the folks wrapped up in this case tried the old, “I had nothing to do with it” defense.
“Defendants also claim that bank records, bank statements, and other corporate records would have established the corporate hierarchy to prove that Benhaim and Michaels neither controlled nor knew of the unlawful business practices of the corporations. However, hundreds of pages of evidence already in the record, including official bank records and receipts, list Benhaim and Michaels in various leadership positions with each of the corporations. Emails and formal corporate documents already in the record establish that Benhaim and Michaels served as and represented that they were either president or vice president of each of the corporate entities, including the Canadian corporations.” – Source
On top of that the appeal opinion says the companies transferred money back and forth between them.
The appellate court summarized, “A court need not look past the first contact with a consumer to determine the net impression from that contact, and a court may consider individual advertisements or messages to determine the net impression. Defendants cannot make considerable material misrepresentations to consumers and then bury corrections and disclaimers in subsequent communications. Therefore, the district court did not err in granting summary judgment.”
The full complaint names as defendants: E.M.A. Nationwide, also doing business as EMA and Expense Management America; New Life Financial Solutions Inc., also d/b/a New Life Financial, and New Life Financial Services; 1UC Inc., also d/b/a 1st United Consultants, and First United Consultants; 7242701 Canada Inc.; 7242697 Canada Inc.; 7246293 Canada Inc., 7246421 Canada Inc.; James Benhaim; Daniel Michaels; Phillip Hee Min Kwon; Joseph Shamolian; and Nissim N. Ohayon.
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