Four student loan recipients have filed a racketeering complaint against Florida attorneys they hired to settle their debts, accusing the lawyers of running an “illegal nationwide, advanced-fee, student loan debt elimination telemarketing scam” that ultimately led to two of the students being sued by creditors.
Lindsey Crits, Evan Wendt and two others said they were cold called by a sales representative purporting to work for GM Law Firm and given promises that the debt relief program would eliminate the entirety of their student loan debt in exchange for 50% of the balance, to be paid over a set number of months. After making tens of thousands of dollars in payments to GM Law Firm through its staffing service over the course of several years, Crits and Wendt were horrified to learn they were being sued for the total amount of loan debt by their lenders in state court, they told the court Friday. Another plaintiff’s grandmother was sued as the co-signer on her defaulted loan.
In all, attorneys for the plaintiffs have filed a total of six racketeering cases for various clients against Kevin Mason PA, GM Law Firm, attorney Chantel Grant and National Legal Staffing Support alleging fraud and breach of fiduciary duty. The defendants also include Berger Singerman LLP partner P. Benjamin Zuckerman, who allegedly masterminded the “enterprise” in 2015 and created a ring of LLCs listed at the same Boca Raton address, and the LLC owners, Gregory Fishman and Julie Quelor.
Counsel for Zuckerman and representatives Berger Singerman did not immediately respond to requests for comment. Matthew Sarelson of Dhillon Law Group, who represents the LLCs, told Law360 that the new complaint is “the latest in a series of baseless copycat suits by the same attorney,” Macy Hanson of Jackson, Mississippi.
According to the complaint, GM Law Firm acts as principal for a handful of companies with the same Boca Raton address, including NLSS, a so-called debt elimination company called Resolvly, and two foreign LLCs called JG Factor and Backend Resolve. The latter was only recently mentioned by Queler in a related suit, “despite active federal court litigation that required the disclosure of this entity being ongoing since 2017,” the complaint states.
Resolvly allegedly “purchases, repackages and launders sales-leads from non-Florida Bar approved lawyer referral companies,” looking for debtors who have large, outstanding private student loans, according to the complaint. Then Resolvly, Backend Resolve or NLSS agents cold call their targets,
representing themselves as employees of GM Law, and enroll them in the so-called debt elimination program.
A program “welcome packet” filed along with the complaint repeatedly states that “you are hiring a lawyer,” listing a number of things that “your attorney” will be doing, including “litigating” on the consumer’s behalf.
According to the complaint, the sales agents made bi-weekly phone calls to build trust, often representing themselves as “paralegals” or “legal assistants,” stringing their victims along for years. Crits enrolled in the program in 2015, completed five years of program payments totaling $45,800, and then was sued for $93,000 in Pennsylvania state court. Wendt enrolled in 2016, thinking that “the payments were a retainer for the law firm to negotiate a settlement with the lender(s) to lower the amount I owed on my private student loans, or to have them completely discharged,” he told the court. He made monthly payments for over two years before learning he was being sued by his creditors, and then had to settle under “extreme financial distress,” according to the complaint.
The suit brings legal malpractice claims against Zuckerman and GM Law Firm owners Kevin Mason and Chantel Grant; as well as a claim against Berger Singerman for negligence in the supervision of its partner.
Hanson first came across the alleged scam in 2017 when a friend of his, William Lamey, sought help over some aggressive calls from employees of Navient, which services and collects student loans. At the time, Lamey thought he was “represented” by Mason, although the two had never spoken. Hanson filed suit in Mississippi against Navient and the GM Law Firm operation, and the case settled out of court. Since then, he has filed four more cases in California, Georgia and Florida, three of which settled out of court. A third, consisting of two consolidated cases, is stayed pending an order on motions to dismiss.
“They are absolutely screwing our generation over,” Hanson told Law360 on Monday. “And as a lawyer it offends me. It offends me that they use the trust of lawyers to scam everyone. And Berger Singerman, this white shoe firm … is setting this up making their money and hiding in their ivory tower. It’s disgusting.”
Hanson’s Florida-based co-counsel, Joshua Horton, first got involved in the debt relief cases last year when the Boca Raton companies sued Hanson for alleged defamation and libel, claiming he had violated the confidentiality and nondisparagement terms of prior settlement agreements. Horton now represents Hanson and has joined him in litigating the racketeering suits.
Defendants’ counsel Sarelson told Law360 that the racketeering cases Hanson filed this year appear to be some “weird form of retribution” for the libel suit.
One of the two cases that were consolidated in Florida this year was a suit brought by Nathan Montalvo, a young musician who thought his student debt had been settled after he made steady payments totaling more than $20,000 to GM Law Firm’s so-called debt relief enterprise.
“It’s sophisticated white collar crime,” Horton told Law360. “It’s ruined a lot of people’s lives, and credit.” According to the complaint, NLSS is enrolling some 600 new clients a month. Horton believes there must be thousands more like Montalvo, Crits, and the other plaintiffs. It’s “stopped people from becoming homeowners, and stopped people from doing the things that they should have been able to do, had they not been looted for tens of thousand of dollars.”
GM Law Firm, NLSS, Resolvly and Chantel Grant are represented by Matthew S. Sarelson of Dhillon Law.
P. Benjamin Zuckerman is represented by David P. Ackerman of Akerman LLP The plaintiffs are represented by Macy D. Hanson and Joshua S. Horton.
Counsel information for Berger Singerman, Fishman, Queler and Mason was not immediately available.
The case is Crits et al. v. GM Law Firm et al., case number 0:21-cv-61960, in U.S. District Court for the Southern District of Florida.
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