Legal News

Suit Alleges Widespread Fraudulent Legal-Aid Scheme

By Dan Slater

The Law Blog never guessed that any organization with the phrase “legal aid” in its name could be a potential vehicle for fraud. But if we’re to believe a complaint that just came over the transom, we might have to adjust some of those preconceived notions.

Earlier today, a team of New York-based lawyers from Morrison & Foerster filed a suit in Colorado federal court on behalf of Colorado Legal Services and Texas RioGrande Legal Aid against several purported legal aid organizations, accusing them of engaging in a widespread fraudulent scheme. The complaint alleges trademark infringement, false advertising and unauthorized practice of law, among other claims.

According to the complaint, the defendants — dozens of entities, many of whose names include the phrase “Legal Aid” — purported to offer legal services through a so-called “attorney division” in 27 states, from California to Connecticut.

According to the MoFo lawyers heading up the case, Alex Lawrence and Jamie Levitt, the scheme goes something like this: In phone books throughout the country, the legal aid organizations advertise under various aliases. When those seeking services call in, their calls, unbeknownst to callers, are routed to a single place in Denver. The person who answers the call solicits the caller for money but then, once paid, fails to provide the services promised.

“In some ways,” Levitt told the Law Blog, “the scheme is sadly simple. You’re targeting consumers who obviously need the services but aren’t necessarily sophisticated consumers of those services.” According to Levitt and Lawrence, they’ve spoken to more than a dozen victims, and believe the actual number to be much larger. “We know it’s been going on for a while,” said Levitt, “because these people work under aliases. They start an organization, a court enjoins them, so they shut down and then they start up again. They’ve been doing this for 10 years.”

An attempt to reach Legal Aid National Services, also allegedly known as the LANS Corp., a defendant listed on the complaint, was unsuccessful. A representative for Ed Brown Management, another defendant, declined to comment.

Full post as published by Law Blog - WSJ.com on February 07, 2008 (boomark / email).