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Whatever Happened With My Money From Allegro Law, Americorp, and Tim McCallan?

By on June 1, 2016

Question:

Dear Steve,

I was a victim of Allegro Law and have received my partial distribution.

Why has Allegro Law now not permitting us to ask questions? Why have they not updated their site with information in over two years? And finally, will their be a final distribution and when?

Thank you.

Wayne

Answer:

Dear Wayne,

For those who may not be familiar with the history of Allegro Law, click here. Allegro Law was the first attorney model debt settlement company I covered that exploded in a huge mess.

I’m not quite sure what answers you are looking for. The Allegro Law bankruptcy website, that was run by the court appointed bankruptcy trustee, is very clear that they can’t answer questions, “Neither the Bankruptcy Court nor the Trustees office is allowed to provide legal advice. Should you need advice about the Allegro Law, LLC, bankruptcy case, it is suggested that you consult legal counsel of your choice.”

It appears the court already disbursed all money available for refunds back in 2014. As the trustee stated in September of 2014, “At this time all distributions have been mailed out to creditors.” – Allegro Law, LLC Bankruptcy

According to the recent bankruptcy trustee report it appears all available money for disbursement to former clients and creditors has been distributed. Read this document and this one.

While I hate to give you bad news, this is all you you going to get for the bankruptcy case filed by Allegro Law unless the court is able to recover more money. More on that in a minute. There are almost 6,000 documents filed in the Allegro Law Chapter 7 bankruptcy case and it still is not closed.

But the attorney behind the Allegro Law mess is still not out from under a massive financial penalty. It appears a claim for nearly $10 million by Chase Bank is still being pursued against Keith “Andy” Nelms.

Whatever money you got is all you should expect although the bankruptcy trustee is pursuing the recovery of additional funds. You got ripped off and like all other consumers, lost big. Sadly, this sort of thing happens rather frequently in the world.

The website you talk about is for information only regarding the bankruptcy case filed and it was not a civil or criminal case to seek anything close to what the average person would label as “justice.”

Whatever existed of Allegro is long gone. But to make the situation even worse, the company that was running Allegro Law, Americorp and Tim McCallan were blasted by the judge in a recent opinion.

The court document says:

“This is an extraordinary case of fraud on a massive scale that was perpetrated by Defendant Timothy McCallan (“McCallan”) on thousands of victims. McCallan [545 B.R. 682] masterminded a debt settlement scheme in which customers were enticed into handing their money to entities controlled by McCallan with a promise that their debts would be either paid or settled. Thousands of customers signed up for debt settlement services offered by McCallan and paid him more than $100,000,000. Almost none of the money was paid to creditors of the customers as promised by McCallan. Instead McCallan, and those in league with him, siphoned off the money into a vast array of companies controlled by or closely associated with him. Among these entities were McCallan’s co-defendants: AmeriCorp, Inc. (“AmeriCorp”) and Seton Corp. (“Seton”).

READ  Allegro Law and Keith Anderson Nelms Bankruptcy Hearing April, 2010

McCallan used attorneys as a “front” to perpetuate his scheme and to provide it an air of legitimacy. McCallan’s scheme was most recently fronted by Keith Nelms (“Nelms”), an Alabama attorney whose license has since been suspended for his many unethical activities. Allegro Financial and Allegro Law (collectively “Allegro”) were instrumentalities controlled by McCallan and fronted by Nelms as a law firm. Prior to Nelms, McCallan’s front was Laura Hess, a Florida attorney who was disbarred for actions she took while fronting a previous iteration of McCallan’s debt settlement scheme, a law firm called Hess-Kennedy.

From the viewpoint of the customer, or victim, McCallan’s scheme began with mass media advertising — television, radio, billboards, etc. — designed to appeal to those in financial distress. The potential customer could call a toll-free number and speak with a representative who would then sign the customer up, promising him that his financial worries would be over. The representative would promise the customer that they would deal directly with his creditors, that all the customer would have to do is pay his money to them instead of his creditors, and that they would take care of the rest. Instead, the customer’s money would be siphoned off under the guise of hidden fees and costs, the customer would be that much poorer, and he would default on his debts because his creditors would go unpaid. As the District Court has aptly noted, the effect of McCallan’s debt settlement scheme on its victims was “personal economic suicide[.]” McCallan v. Hamm, 2012 WL 1392960, *1, 2012 U.S. Dist. LEXIS 56097, *3 (M.D.Ala. Apr. 23, 2012). This adversary proceeding is an attempt by the Trustee in bankruptcy to recover the money that McCallan defrauded from these victims. – Source, Source

The Judge ented the 160 page opinion with issuing a $107,757,767 judgment against Americorp, Seton Corp, and Tim McCallan. He also issued a $2,755,703 judgment against The Achievable, Inc. – Source, Source

A motion for sanctions was granted by the court in the amount of an additional $999,457 against Americorp, Seton Corp. and Tim McCallan. – Source

Based on a recent request by someone who identified himself as Tim McCallan, who wanted me to remove articles, one assumption is McCallan is attempting to distance himself from this past.

READ  Update on Case Filed by Florida Against Fidelity Land Trust, Ed Cherry, Larry Diodato and Others

The court recently filed a notice of the judgment in New York and it is unclear if they realize rumors are McCallan is now living in Florida. Oops, I take that back, the judgment against Americorp, Seton Corp, and Tim McCallan was also filed in Florida on April 20, 2016. – Source

So Wayne, there you go. That’s all I know as of today.

If you want to spend a lot of time reading this document, it will open your eyes and potentially shock you to what the court discovered and had to deal with. If you want to know where your money went, here is what the Judge wrote, “Virtually all of the money paid by Allegro customers toward the goal of debt settlement was siphoned off by McCallan and those in league with him.”

The opinion written by the Judge also contains some additional debt relief industry history. “Prior to opening Allegro Law, Nelms was familiar with and involved in the workings of Hess-Kennedy. At trial, Nelms detailed his initial introduction to debt settlement programs and Hess-Kennedy, recalling working with one of Hess-Kennedy’s principals, Edward Cherry (also known at one time as Edward Kennedy), several years prior to Allegro taking over in 2008.

Nelms was approached by Cherry to build an attorney network for Hess-Kennedy, and testified that he was paid approximately $15,000 for the service, a service that he says he was hired to do several times. Nelms’s involvement with Hess-Kennedy became so entwined that upon Hess-Kennedy’s assignment into the Florida receivership, the receiver running Hess-Kennedy hired Nelms to represent the entity.

Through his involvement with Hess-Kennedy, Nelms testified to being introduced to Americorp and its CEO Timothy McCallan. While publishing a series of websites that Nelms described as for consumer attorneys, Nelms became acquainted with another debt management operator, Joel Carlsen, who later introduced Nelms to McCallan. While McCallan and Americorp were initially too busy with Hess-Kennedy to work with Nelms’s Allegro outfit, that dynamic changed when the Florida Attorney General put Hess-Kennedy out of business. Nelms testified at trial that he did some internet research on McCallan, learning of McCallan’s previous operations of AmeriDebt and DebtWorks, both debt relief scams, and but that “nothing scared me too much.”

About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

4 Comments

  1. christie

    August 4, 2017 at 3:45 am

    I was scammed out of over $10,000 from signing with Allegro, forcing me to file bankruptcy and lose my house to foreclosure. I never received a dime in the settlement???? How did they decide who got a settlement ?

    • Steve Rhode

      August 7, 2017 at 10:20 am

      It has yet to settle. Still in bankruptcy court.

  2. Jason

    June 1, 2016 at 8:49 pm

    Wow 100 million dollar scam. You have to feel sorry for all the hard working Americans who were ripped off here. How do people like this Tim sleep at night?

    I google everyone I meet. I don’t want my kids around folks with low moral fiber. Feel bad if he has a family and kids.

    Is there plans for a CNBC American greed episode on this guy? Maybe Steve can write it for them

  3. Steve Rhode

    June 1, 2016 at 5:52 pm

    Hi Wayne. I just answered your question after hours of research on it.

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