Friday, May 31, 2013

Bankruptcy Receiver Tags S. Florida Lawyers In Suit To Recover Money Allegedly Ripped Off In Foreclosure Rescue Racket

In Fort Lauderdale, Florida, the South Florida Business Journal reports:

  • New lawsuits are being filed against South Florida attorneys over allegations they received money connected to Prime Legal Plans, a $21 million foreclosure rescue fraud closed by the Federal Trade Commission in September.

    On Thursday, receiver Charles Lichtman of Berger Singerman filed suit against the Litvin Law Firm, Litvin Torrens & Associates and attorneys Gennady Litvin and Luis Torrens. The firms have offices in New York and Fort Lauderdale, while Torrens is from Miami Lakes.

    Lichtman also handles work in the Chapter 11 wind-down of Rothstein Rosenfeldt Adler.

    According to the FTC, Prime Legal Plans was one of several foreclosure rescue scams that promised relief from mortgage defaults in exchange for monthly payments; but little actual legal work was usually performed.

    The suit seeks to recover more than $4 million from the Litvin parties. Their attorney, Joe Gormley, noted in an email that the FTC didn't bring charges against his clients. "We feel... that the receiver's attempt to reverse the Federal Trade Commission's decision is inappropriate, and that ultimately the courts will agree."(1)

    “Prime Legal Plans used a network of attorneys who were allegedly going to provide excellent defenses, supposedly for a fixed fees. Unfortunately most of the victims here were flat broke and needed every penny they could make,” Lichtman said.

    He said he may sue other attorneys but the Litvin firm was a clearinghouse for other referrals.
Source: Receiver in $21M Prime Legal Plans fraud sues attorneys.

(1) It's understandable that private lawsuits are necessary to squeeze money out of scammers. The FTC, while having a track record of obtaining significant money judgments against scammers, are notorious for failing to actually collect on said judgments, except for the occasional paltry payments that sometimes trickle into their coffers.

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