Thursday, May 26, 2016

Maryland AG Sues Finance Outfit That Allegedly Ran Racket To Dupe Victims Of Lead Paint Poisoning Into Selling Their Structured Settlements For Paltry Lump-Sums Amounting To A Fraction Of Their True Value; State Seeks To Void Transactions & Recover Victim Restitution

From the Office of the Maryland Attorney General:
  • Attorney General Brian E. Frosh announced [] that his office has filed suit against Access Funding, LLC and other affiliated companies, for allegedly misleading victims of lead paint poisoning and other injured Marylanders to convert future structured settlement payments into immediate cash.

    The complaint alleges that, in violation of the Maryland Consumer Protection Act,
  • [that] Access Funding aggressively targeted young, intellectually-impaired Marylanders, including numerous groups of Baltimore City siblings who were exposed to lead paint as children in their family home;
  • that Access Funding arranged for its customers to get sham "independent professional advice" about these transactions from a Maryland lawyer who secretly functioned as a member of Access Funding's own team;(1)
  • that injured Marylanders who did business with Access Funding, after relinquishing future settlement payments intended to support them for years or decades into the future, received a cash equivalent only to a fraction of the value of those future payments; and
  • that Access Funding committed fraud on the Maryland courts that approved these transactions, including by falsely asserting that its injured and cognitively-impaired customers received the independent professional advice that Maryland law requires as a prerequisite to the transactions.
    According to the complaint, the majority of Access Funding's customers are young people between the ages of 18 and 26 who reside in Baltimore City, and more than 70 percent of Access Funding's customers were victims of childhood lead paint poisoning. "Victims of lead paint poisoning suffer permanent cognitive injuries. Structured settlements are a lifeline that provides long term care and support," said Attorney General Brian Frosh. "My office will fight to prevent vulnerable Marylanders from having their money taken from them through illegal practices."

    In the complaint, the Attorney General requests that the court award restitution to injured and cognitively-impaired Marylanders who were harmed by Access Funding's practices, impose civil penalties on Access Funding and its principals under the Maryland Consumer Protection Act, and declare void prior transfers of structured settlement payment rights.
Source: Attorney General Frosh Files Suit Against Access Funding for Exploiting Lead Paint and Other Injured Marylanders (AG Frosh Seeking Restitution for Marylanders Harmed by These Unfair and Deceptive Practices).

See also, The Washington Post: Company that reaped millions from deals with Baltimore’s lead-poisoning victims violated law, authorities say:
  • The civil suit alleges that Access Funding violated state law when it aggressively pursued scores of mentally impaired lead-poisoning victims, persuaded them to sell the settlements they received in personal injury lawsuits for a fraction of their worth and then withheld vital information from the courts that approved the deals.

    The agency asked that the Baltimore City Circuit Court order Access Funding to repay the victims the millions of dollars they lost when they sold their settlements — which in most cases were their only assets.

    “The conduct that we lay out in the complaint is disturbing,” said state Attorney General Brian Frosh. “It is infuriating. It lays out a strong case that you have people who took advantage of a vulnerable population, who almost by definition are cognitively impaired, and stripped them from the support that would take them through the rest of their lives.”
    The subsequent deals allowed the company to purchase settlements worth $32.6 million, if they had been paid out over time, for $7.5 million, authorities found.

    Frosh’s office launched the eight-month probe after The Washington Post published an investigation last year [see How companies make millions off lead-poisoned, poor blacks] exposing Access Funding’s dealings with victims of lead poisoning. The articles also pointed to loopholes in regulations governing structured-settlement purchasing in Maryland and Virginia. Both states have since passed legislation reforming that industry.

    Unlike traditional lawsuit settlements, which are paid out to a plaintiff in a lump sum, structured settlements dispense the income in small increments across decades. To protect someone from immediately spending their entire settlement, lawyers routinely recommend a structured settlement for unsophisticated clients who have been permanently injured. There are hundreds, if not thousands, of Baltimore residents who grew up in dilapidated, lead-painted tenements and then sued their landlords for lead poisoning, ultimately receiving structured settlements. The vast majority are African American.
(1) No surprise that a sleazy lawyer is in the middle of all this.