South Florida Sun Sentinel |
Jun 29, 2021 at 6:40 PM
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A network of Boca Raton-based companies targeted debt-burdened students around the nation by enrolling them into a student debt relief program that failed to reduce their debts while charging them half of what they owed, two new lawsuits claim. (Seth Wenig/AP)
Former college students with heavy student debt loads were targeted by call centers offering debt relief services, then enrolled in a Boca Raton-based program they were told would settle their debts for half of what they owed, two new federal lawsuits claim.
But instead of paying off their debts, the program siphoned all of their money for questionable services that left them worse off than before, the students said.
Nathan Montalvo said in a suit filed on June 27 in U.S. District Court in West Palm Beach that he thought he was settling his debt by agreeing to pay 58 automatically debited monthly payments of $375.65 each — totaling $21,788.
Montalvo was told lies, the suit states. Instead of paying off his debt, the law firm connected to the service, GM Law Firm LLC, “merely send(s) cease and desist letters to their clients’ creditors, while disputing the reporting of these debts with the major credit bureaus without any basis for said disputes.”
The law firm and sales agents, the suit says, “Then sit back and hope that their clients’ creditors do not file collection lawsuits when the loans inevitably go into default.”
The other suit was filed on May 18, also in West Palm Beach. Plaintiff Patricia Crimmins agreed to pay $56,326 — or $782 a month for 72 months — to eliminate her student loan balance “as a legal liability,” the suit states.
A long list of defendants are named in the suits, including P. Benjamin Zuckerman, partner at Fort Lauderdale-based law firm Berger Singerman, attorney Kevin Mason, five unnamed defendants, identified as “John and Jane Does.” and four companies operating out of the same building at 1515 S. Federal Highway in Boca Raton: GM Law Firm LLC, National Legal Staffing Support LLC, JG Factor LLC, and Resolvly LLC.
Also named as defendants are Chantel Grant, GM Law Firm LLC’s principal; Gregory Fishman, principal at all of the named firms except GM Law Firm LLC; and Julie Queler, former principal of a Boynton Beach company called A Debt Solutions who the suit says co-owns Resolvly LLC with Fishman.
The lawsuits, filed on behalf of three graduates, accuse Zuckerman of being the “architect and mastermind” of the alleged scheme.
Zuckerman was attorney for an advance fee debt elimination business owned by Fishman and Queler, called Debt Be Gone LLC, a decade ago, the suit states. It adds that he devised, designed, and formed the closed circuit of business entities involved in the Montalvo case and drafted the legal services agreement that bound the clients “to these massive program payments.”
The lead plaintiffs’ attorney in the case, Macy Hanson, of Madison, Mississippi, said she was alerted to the enterprise in 2016 when an acquaintance told her that his former girlfriends were getting calls from debt collection firms about his student loan debt. The former student said he thought he had settled the case by paying the debt relief program half of what he owed.
But when Hanson reached GM Law Firm principal Chantal Grant, Grant eventually said, “Those were all attorney payments. None goes to the creditors,” Hanson recalled.
Hanson has since represented at least 25 former students in lawsuits filed in California, Georgia, Indiana, Arizona, and now Florida. Court records show that the plaintiffs agreed to dismiss three of the cases and Hanson obtained a favorable judgement in a fourth case.
But Michael Sarelson, Fort Lauderdale-based attorney for National Legal Staffing Support LLC, Resolvly LLC, JG Factor LLC, GM Law Firm LLC, and Chantel Grant, said in an email that judges ruled unfavorably against Hanson’s clients in three of the suits.
He called the most recent suits “the latest in a serious of unsuccessful lawsuits filed nationwide, all of which were dismissed with prejudice. Once again, we intend to vigorously defend on the facts and the law.”
Sarelson also pointed out that Hanson is a defendant in a “multi-count, million-dollar defamation lawsuit brought by my clients in Palm Beach Circuit Court.”
Attorneys for Zuckerman and the other defendants did not respond to requests for comment.
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In the Montalvo suit, Hanson described how the process works:
Resolvly LLC, owned by Greg Fishman and Julie Queler, “purchases, repackages and launders sales leads from non-Florida Bar approved lawyer referral companies” of former college students, like Montalvo, with large private student loan balances who are struggling to make timely payments. The sales agents, which include Resolvly and affiliate National Legal Staffing Support LLC, cold call the prospects and tell them that they work for a law firm that will eliminate their private student loan debt for 50 cents on the dollar of their principal balance, to be paid over 58 monthly payments. Sharing in those payments are the program’s principal, GM Law Firm, LLC, its sales staff, including Resolvy and National Legal Staffing Support, its accounting firm, and JG Factor, a firm owned by two of the defendants to “siphon” 85% to 90% of the so-called attorneys fees paid by clients, the suit states.
Hanson said she believes the operation has left tens of thousands of former students worse off than before they signed up, based on documents she obtained while working for her clients.
“A lot of these folks, if they had reached out their creditors on their own, could get 50 cents on the dollar discharged,” she said.