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Suit Targets Lead Paint Settlements

Tuesday, May 17, 2016

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Maryland’s attorney general has sued several companies, accusing them of duping at least 100 lead-paint poisoning victims out of millions of dollars in settlement funds.

Attorney General Brian E. Frosh announced the suit against Access Funding LLC, formerly based in Chevy Chase, and other affiliated companies and individuals, Thursday (May 12).

The companies allegedly used unfair and deceptive practices to convince the victims to sign over the bulk of their settlements in exchange for a one-time cash payment, in violation of the Maryland Consumer Protection Act.

lead paint
© iStock.com / XiFoto

Maryland's attorney general says the companies aggressively targeted young, intellectually-impaired victims of lead-based paint exposure.

The 85-page complaint says Access Funding acquired a gross total of $32.6 million in future payments for its customers between March 2013 and August 2015; however, at most, it doled out $7.5 million in cash to those customers.

“Victims of lead paint poisoning suffer permanent cognitive injuries,” Frosh said in a statement. “Structured settlements are a lifeline that provides long term care and support. My office will fight to prevent vulnerable Marylanders from having their money taken from them through illegal practices.”

Young, Poor Victims Targeted

The complaint alleges that the scheme worked like this.

Access Funding aggressively targeted young, intellectually-impaired Marylanders, including siblings who were exposed to lead paint as children in their family home.

The company allegedly placed billboards around Baltimore, featuring a young person with a handful of cash, inviting people who had been victims of lead paint poisoning to "Get Cash For Your LEAD PAINT Settlement." [Emphasis in original.]

The suit also alleges that the companies used Maryland's online case search function to identify young people who were plaintiffs in lead paint poisoning lawsuits. The companies sent the potential customers letters with "bogus call to activate" checks and made frequent phone calls, the complaint says.

Frosh
Official Photo

Attorney General Brian E. Frosh has requested restitution for the victims.

The company arranged for its customers to get sham "independent professional advice" about these transactions from a Maryland lawyer who secretly functioned as a member of Access Funding's own team.

The customers who did business with Access Funding—after relinquishing future settlement payments intended to support them for years or decades into the future—received a cash payment equivalent only to a fraction of the value of those future payments, according to the suit.

Case Example

One case outlined in the complaint involved Tyrell D. and Tyree D., who won a lead poisoning lawsuit in October 2003, when they were 8 years old. Through that suit, the twins were entitled to compensation for their cognitive injuries, totalling about $1,900 per month for 40 years, to begin in March 2016.

However, around the boys' 18th birthday, Access Funding induced Tyrell and Tyree to transfer all future payments, a total of approximately $1,844,000, in exchange for cash payments totalling at most $302,256, the suit alleges.

Access Funding is further accused of committing fraud on the Maryland courts that approved these transactions, including by falsely asserting that its injured and cognitively-impaired customers received the independent professional advice that Maryland law requires as a prerequisite to the transactions.

The complaint says the majority of victims were young adults aged 18 to 26 who reside in the City of Baltimore, a hotbed of lead-based paint cases.

Seeking Restitution

Frosh is requesting that the court award restitution to the victims who were harmed by Access Funding's practices; impose civil penalties on Access Funding and its principals under the Maryland Consumer Protection Act; and declare void prior transfers of structured settlement payment rights.

court
© iStock.com / AudreyPopov

Access Funding is further accused of committing fraud on the Maryland courts that approved these transactions.

Access Funding could not be reached for comment Monday (May 16), but CBS News reports that the company previously called the allegations “scurrilous” and “incorrect,” noting that the disclosures and voluntary sales were approved by courts.

The company also claimed it lost money in the transactions, CBS News said.

An attorney with the National Association of Settlement Purchasers told the news bureau it would be unfair to assume this activity happens elsewhere in the country.

“It’s very unfortunate what happened in Maryland,” said Earl Nesbitt. “But it would, I think, be a mistake for anyone to judge the entire industry or every transaction by what happened in an isolated place involving a particular funding company.”

   

Tagged categories: Coating chemistry; Ethics; Health and safety; Housing; Lawsuits; Lead

Comment from Jeff Laikind, (5/17/2016, 3:56 PM)

I've seen these types of buyouts before. I'm not sure that it qualifies as a "scam." If it does, then the way lottery jack pots are paid is also a scam. Do you want an annuity that will pay out over 40 years? Or would you rather have a lump sum right now?


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