State charges process server that didn’t deliver
Portville complaint got probe started
A company hired to serve debt collection lawsuits to thousands of cash-strapped New Yorkers didn’t bother to deliver the papers much of the time, leaving many people unaware they had been sued until the case was over and their bank accounts were frozen, authorities said Tuesday.
Attorney General Andrew Cuomo filed criminal fraud charges against the firm, American Legal Process, of Lynbrook, and its owner and president, William Singler.
Investigators accused the Long Island company and its workers of doctoring records and filing thousands of false documents to cover up their laziness in trying to track down people being sued over alleged debts.
Singler’s lawyer, Corey Winograd, acknowledged that some of the people employed by the company broke rules but said his client didn’t know it was happening.
“He trusted those process servers,” Winograd said. “We now know today that some process servers breached that trust.”
State law generally requires process servers to make three tries at hand-delivering a lawsuit before they can resort to a tactic known as “nail and mail,” where they send the lawsuit by post and affix a copy to the person’s door.
But in ALP’s case, the attorney general said, workers routinely made one attempt and then quit. In a court complaint, investigators said the company knew what was going on and encouraged workers to cut corners.
“The law says you have to go three times, but I know that it is a lot of driving, so if you go once you can just tack it,” one manager told a new employee, according to the court filing.
Court administrators and a judge in Cattaraugus County became suspicious when a woman called and complained that her bank account had been frozen without her knowledge.
That person, Kathryn Baughman of Portville, now says she feels “real good” about the charges filed by Cuomo’s office.
Baughman in an affidavit said she was balancing her checkbook in January 2008 by calling her bank’s automated phone system when she discovered she was overdrawn for more than $1,000.
Baughman said she knew that was wrong, and when she called her bank to clear up the mistake, she learned that a judgment had been taken against her by Forster & Garbus, a debt collection law firm in Farmingdale.
Baughman said that was stunning, since she had never received a summons and complaint, nor a notice that a judgment could be taken against her. Not only was her account frozen, but so was her husband’s.
Since they needed access to their account, she said, they made arrangements with Forster & Garbus to pay the debt, including hundreds of dollars in court fees.
When she followed up with the county clerk, she learned a process server claimed to have tried three times to serve documents at her home but never found anyone home, and on the third try affixed the documents to the door and mailed her a copy.
Baughman said someone was always home at the times when the server claimed to have visited. Her husband was on medical leave with a broken leg, and her daughter-in-law was staying with the family. She also said she never received a copy of the documents, either on the door or in the mail.
Other people said they first found out about lawsuits when they tried to use a cash machine and had their cards rejected. They later learned that judges had given approval for their accounts to be frozen when they didn’t turn up in court to defend themselves.
Investigators with the attorney general and Office of Court Administration said the company’s own records revealed the fraud.
In about 21 months, ALP claimed to have delivered nearly 100,000 legal notices, but many of its process servers were filing records indicating they were in as many as four places at once, sometimes at opposite ends of the state.
In one instance, a worker claimed to have attempted deliveries that would have required him to drive more than 10,000 miles in a single day, authorities said. In other cases, workers claimed to have delivered court complaints before they had actually received them.
Cuomo’s office also said Tuesday that he plans to sue one of ALP’s largest customers, Forster & Garbus. The attorney general accused the firm of failing to supervise the company and relying on legal papers “it knew or should have known were false.”
Firm co-owner Ronald Forster said he had been using ALP for only about a year and a half and had been unaware of the alleged violations until now.
“I’m not in the business to try and take advantage of anyone,” he said. “If there were complaints, it was such a small percentage . . . If there is a problem with service, I’ll do whatever I can to help correct it and fix it.”
News Business reporter Matt Glynn contributed to this report.
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