The State of Illinois has won a $23.7 million judgment from a Chicago law firm it once hired to pursue student-loan deadbeats.
A Cook County judge ordered the law firm of Friedman & Wexler and its lawyers Mitchell Wexler and Norman Wexler to pay the damages as a result of a lawsuit the Illinois Student Assistance Commission filed in 2006.
The state agency accused the law firm — which oversaw defaulted student-loan collections on behalf of the State of Illinois between 1994 and mid 2006 — of improperly pocketing commissions and shorting the state on money it was owed.
The Chicago Sun-Times reported in 2007 that the state claimed the firm had “wrongfully withheld” at least $1.6 million in commissions and improperly continued collecting money from debtors after its contract with the state lapsed in June 2006.
To what extent the state will be able to collect on the judgment isn’t clear. Both Wexlers have filed for bankruptcy, and their firm no longer has a working telephone number.
“Ironically, we’ll use all the tools that are normally available to a collector to try to collect from our collectors,” said Andrew Davis, the state agency’s executive director. “We’ll try to identify their assets and seize them.”
Article Source: http://www.suntimes.com/news/metro/2769672,CST-NWS-deadbeat04.article
Chicago debt collection law firm Friedman & Wexler has apparently shut down as its fights lawsuits claiming it withheld money from clients.
Calls to the law firm’s main number aren’t being answered, and an e-mail sent to one of its employees says the firm is winding down, the Chicago Tribune reports. The firm handled thousands of checks and wage garnishments for its clients every month.
Several suits have been filed against the firm by former clients who claim the firm and principals Norman Wexler and Mitchell Wexler withheld funds from clients, the story says. One former client, the lending arm of Volkswagen, alleges the firm misappropriated $1.4 million.
The story has details on some of the litigation. A judge in the Volkswagen case issued an injunction in October that freezes the firm’s bank accounts, except for normal operating expenses. In another case filed by the state of Illinois, a judge ordered Norman and Mitchell Wexler to restore more than $900,000 to trust accounts and ordered them jailed when they missed the first installment. They made the payment later that day, their lawyer, George Grumley, told the Tribune. Grumley said the state owes the firm more money in unpaid fees than the firm owes the state.
At least one consumer whose credit card debt was being collected by the law firm was never told of the closing. “What’s going to happen to me?” consumer Dawn Estenor of Denver asked in a Tribune interview. “Is the account going to get sold someone else? Am I going to rack up more interest?”
Story published on the ABA Journal website, original article here.
