In the ongoing saga that is the Morgan Drexen mess, a new attorney was recently dragged into the quagmire. Aissac Aiono, operating as Seila Law was alleged to have taken over debt settlement clients and efforts for the chain that began with Morgan Drexen, passed through Howard Law, and now is purported to have landed on Seila Law. You can see past posts on this mess, here.
Recent court documents filed by the attorneys for Aissac Aiono and Seila Law basically say the CFPB is wrong in going after them.
The documents state, “how CFPB could charge contempt against Aiono and Seila Law when CFPB never served Aiono and Seila Law with the Orders and did not have clear and convincing evidence that they had actual notice of the Orders.” Which appear to imply that although previously submitted evidence showed clients under the care of Aiono and Seila Law, he had no knowledge of the issues facing the previous law firms involved. Anything is possible so I’m happy to go with the assumption he was clueless of all of the CFPB activity.
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Unless I’m missing something here, the arguments put forward by the attorneys for Aiono and Seila Law don’t seem to dispute the parties were actually servicing former Morgan Drexen and Howard Law clients, just that they could not be held in contempt for not being aware of the previous court orders prohibiting such activity.
The CFPB makes the statement that Aiono should have been aware of the issues over the settlement clients in question.
The CFPB states, “Here, it is undisputed that, in June 2015, when the Court issued its Injunction Order, Aiono was working as an attorney for Williamson Law. In that role, Aiono was directly involved in the Attorneys’ interactions with the Morgan Drexen bankruptcy trustee, who was overseeing Morgan Drexen’s business operations. Given Aiono’s role, it is inconceivable that he, and, by extension, Seila Law, did not have notice of the Injunction Order. Other facts in the record also make clear that Aiono and Seila Law were aware of and violated the Injunction Order. For example:
- Seila Law was formed just weeks after the Court’s Contempt Order;
- Aiono and Seila Law worked with Vincent Howard to transition thousands of clients to Seila Law in the wake of the Contempt Order, even though Aiono was a newly minted attorney with only two years of practice under his belt;
- Seila Law immediately hired former employees of Howard to assist in the transfer;
- Seila Law’s website contains text that is identical to text found on the Williamson & Howard LLP website;
- Seila Law employment advertisements direct prospective employees to the Howard Law website;
- Seila Law’s letterhead is a knock off of Howard Law letterhead, and its communications to creditors include references to Morgan Drexen and language that parrots language used by Howard Law; and
- Howard Law paid Seila Law $5,000 in fees in November 2015 from funds it collected from Affected Consumers without Hugh Williams’ (engagement counsel) knowledge.
Additional court documents address the $5,000 check to Seila Law.
“For example, in the case of the allegedly egregious $5,000 payment that was made from Mr. Williams’ account (not from the account of an Affected Consumer) to the Seila Firm, this payment was authorized by Mr. Williams. Accordingly, Mr. Williams’ and the CFPB’s attempt to characterize this payment as something sinister is disingenuous, and insofar as the issues presented in the Application are concerned, irrelevant. Who Mr. Williams elects to pay from the funds in his own accounts is not in contest: The issue is whether fees were paid by the Affected Consumers to Howard Law, and as to that the evidence is clear—they were not.”
“For example, the check that was issued to the Seila Firm referenced in this declaration was issued in compliance with his direction, from his funds.”
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