Three Oakland County attorneys are facing criminal charges that could see them lose their attorney’s license and be sent to jail.
The three men were charged last year with committing a fraud that left hundreds of petty debtors – people who owed money to banks, credit unions, landlords and other creditors. Lawyers allegedly failed to inform these people that they were being sued for their debts, allowing lawyers to obtain instant judgments when people failed to show up for court.
This month, the three lawyers face a new hazard. It’s a class action lawsuit to turn the script around. Several of the lawyers’ debtor victims turned into plaintiffs. They want a court-ordered settlement, so they can reverse the situation and collect from the lawyers. The new lawsuit aims to unite hundreds of Michiganders who had consumer debt into a class that can jointly sue those attorneys in a single case.
The multiple legal threats surrounding the three lawyers highlight not only their possible wrongdoing, but also a key constitutional right of all Americans: the fundamental right to know you have been sued.
The new lawsuit seeking class action payout, filed on April 8, comes just over a year after criminal charges were brought against the three lawyers, setting off a scenario that has upset some members of the legal profession in the Michigan. Among those disturbed is Genesee County District Attorney David Leyton, who said last year when he announced the charges: “It pains me to charge other members of my profession, but no one is above the law.”
Reached this week, Leyton told the Free Press in a statement, “We know from our police investigations that there are more than 80 victims in Genesee County alone, and we believe there are potentially hundreds more victims spread across at least three other counties and possibly more in Michigan. Each of the three lawyers is innocent until proven guilty. Defense attorneys representing them said they were outraged not only by the charges, but also by Leyton’s statements.
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“I have practiced law for 26 years and I don’t think I have ever seen such an exaggerated alleged wrongdoing situation,” said Birmingham criminal defense lawyer Kimberly Stout. Stout added: “Even if they are found not guilty, the statements of the prosecutor will certainly have a very negative effect on their professional life from now on.”
The class action lawsuit comes weeks after Governor Gretchen Whitmer on March 23 signed a pair of bills that toughen the penalty for non-lawyers, called bailiffs, if one of them commits shenanigans. legal similar to those alleged. against the three attorneys: Marc Fishman, 71, of Bloomfield Township; his son, Ryan Fishman, 33, of Orchard Lake; and Alexandra Ichim, 34, of Waterford. The alleged misconduct of the three lawyers was to have falsified numerous legal documents, called proofs of service. Each proof of service indicates to the court, officially and for the record, that the person being sued was properly served in accordance with Michigan law.
States differ slightly in their requirements, but the right to be informed of a criminal charge is enshrined in both the United States and state constitutions. For a civil matter, like being sued for a debt, the same right is built into state laws. By circumventing this law in many places, the Fishmans and Ichim would have accelerated their costs to manage an uninterrupted flow of debt collection cases, on the chain. Leyton announced charges against the trio in April 2021 after investigators received reports that the three attorneys had found a way to dispense with the tedious effort of hiring process servers – the freelance couriers who deliver hand notice from the court, called a summons, to any person being sued. Because the COVID-19 pandemic has slowed court cases everywhere, the criminal cases against the trio of lawyers are finally approaching preliminary hearings, scheduled for Monday.
According to legal experts, Michigan’s debt collection procedure allows an attorney working on behalf of a creditor to hire a bailiff, who then tries to personally deliver a subpoena to the debtor, either at home , or at work. If after several attempts there is still no contact with the debtor, the bailiff signs a court document — called an affidavit — stating that the debtor could not be notified. This document is a sworn statement, admissible in court as essential evidence. This opens the door wide to a lawyer who simply publishes a notice in a local newspaper and then asks a judge for a default judgment, without the knowledge of the debtor and without giving that debtor the right to a day before the court. BAM! The judge’s gavel drops and a debt collector can immediately begin garnishing a debtor’s wages and other assets.
The same right to be notified applies to most lawsuits or lawsuits, legal experts say. All Americans have the right to know their accusers and what legal case they face. It is part of a larger right, simply called “the right to due process”. The United States Constitution prohibits any branch of government from depriving Americans of their liberty or property without due process.
In this sacred right lies the essence of the criminal charges brought against father and son Fishmans and their associate Ichim. By allegedly shortening proceedings and submitting false documents to judges, they are accused of setting up a scheme that raised more than $1 million from at least 1,000 people, according to press releases from the Genesee County District Attorney’s Office.
Now comes the new risk of a potential class action settlement. Three Genesee County residents who were targets of attorneys’ debt collection cases are hoping to qualify for a class action lawsuit and then seek damages from the attorneys. If a judge decides they qualify as a class, then they could represent many other alleged debtors who were targets of the Fishman law firm and seek a class settlement. Everyone could receive a check.
But that effort may have a tough fight at Genesee Circuit Court. A similar lawsuit filed by the same three plaintiffs was dismissed in federal court in Detroit in late February. In this lawsuit, the three plaintiffs sued the Fishman company under the Fair Debt Collection Practices Act, a federal law aimed at reducing abusive debt collectors. U.S. District Judge Nancy Edmunds shut down the scheme. Edmunds ruled that the three plaintiffs, all residents of Genesee County, and all with landlords claiming they were behind on their rent, lacked standing under federal law.
The plaintiffs therefore filed a new lawsuit with the Genesee County Circuit Court, this time under state law: the Michigan Collection Practices Act. Again, all three applicants want to be certified as a group. If that happens, they can recruit many other people who they believe have been victimized to join them in seeking monetary damages. Wade Fink, one of the attorneys on the team that helped Fishman prevail in federal court, said he doubts the plaintiffs’ second move in a class action lawsuit will succeed.
“There was no allegation that any of these debtors in any of these cases owed money,” Fink said.
“The question has always been whether debtors have had due process. Judge Edmunds ruled that whether or not there was a bad actor at the bottom of it all, these debtors were not harmed,” he said.
Regardless of how the class action effort plays out, a higher priority is making sure Michigan residents always know if they’ve been sued, State Sen. Jim Runestad said. Runestad, R-White Lake, said he spent seven years getting Michigan law amended to toughen the penalty for counterfeiting by process servers. Until now, if a bailiff lied about serving a summons, the penalties were “little or nothing – the worst thing that could happen was that the bailiff risked being (cited for) contempt of court,” Runestad said.
The new law he championed, Public Law 36 of 2022, “requires bailiffs to sign a statement” in which they state that they have served the defendant with a subpoena and that the document they are submitting as “proof of service”. is truthful, under penalty of perjury — a felony, Runestad said.
“It was a huge hole in our justice system,” now plugged with a possible five-year prison sentence for violations, he said.
Contact Bill Lait: [email protected]
This article originally appeared on Detroit Free Press: Oakland County Lawyers Charged with Fraud Now Have Debtors After Them