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Legal Financial Advance Firm Accused Of Scamming 9/11 Heroes, NFL Players

February 22, 2017



"A New Jersey-based company that offers financial advances to people awaiting legal settlements was accused Tuesday of scamming first responders to the 9/11 terrorist attack by luring them into costly advance deals on pending compensation and settlement payouts." - USAToday

Photo source: USA Today

Article by , Updated February 8, 2017, USA Today


I couldn't let him be fleeced by this company . . .


A New Jersey-based company that offers financial advances to people awaiting legal settlements was accused Tuesday of scamming first responders to the 9/11 terrorist attack by luring them into costly advance deals on pending compensation and settlement payouts.

RD Legal Funding allegedly misled police officers, firefighters and other first responders about the terms of the advance payments, according to a federal lawsuit filed by the Consumer Financial Protection Bureau and the New York Attorney General's office.

The company similarly targeted former National Football League players diagnosed with Alzheimer's disease and other playing career-related illnesses that made them eligible for payments from a class-action court settlement, the lawsuit alleged.

"The alleged actions by RD Legal — scamming 9/11 heroes and former NFL players struggling with severe injuries — are simply shameful," New York Attorney General Eric Schneiderman said in a statement announcing the lawsuit.

CFPB Director Richard Cordray said the lawsuit "seeks to end this illegal scheme and get money back to those entitled to receive it."

RD Legal did not immediately respond to phone messages seeking comment.

Based in Cresskill, N.J., the company offers financial advances that enable people who are entitled to payments from victim compensation funds or lawsuits to pay bills while awaiting their settlement payouts. The lawsuit names the company, owner and founder Roni Dersovitz and two related entities.

Many first responders to the terror attacks later suffered respiratory illnesses, cancers and other ailments deemed related to their efforts at Ground Zero in New York City after the attacks. They often qualified for financial aid from the federal Zadroga Compensation Fund, named for a New York City police officer who was among those who died of respiratory disease attributed to his work in the rubble after the World Trade Center towers collapsed.

Former NFL players who suffer from Alzheimer's or other neurological illnesses related to concussions during their playing careers in many cases qualify for payments from a 2015 amended court settlement that could ultimately surpass $1 billion.

But the first responders and former players usually had to wait for their payments. As they waited, RD Legal would "swoop in with a 'deal,' " the lawsuit alleged. The company provided upfront payments, "which the consumers repay when they receive their awards."

Using confusing contracts that misrepresented the advance terms, the company allegedly misled the consumers into approving deals with repayments that doubled or tripled the total amounts advanced by RD Legal. "RD's misconduct thus costs consumers millions of dollars," the lawsuit charged.

The RD Legal transactions in some cases were equivalent to rates of more than 250% and allegedly violated New York usury laws that prohibit rates that high, the lawsuit charged. Although RD Legal allegedly referred to the transactions as "assignments," such transactions constitute an unlawful sale or assignment of a personal injury claim under New York law, the lawsuit alleged.

After working at Ground Zero, former New York City police officer Elmer Santiago was disabled by a respiratory illness that forced him to retire in 2004. He won a $3.9 million Zadroga award in 2014, but the money wasn't scheduled to be paid for 18 months, said Santiago's attorney, Michael Barasch.

Santiago received $355,000 in advances from RD Legal, believing he would have to pay a roughly 19% rate on the funds, Barasch said. When the former cop collected the federal award, RD Legal sought roughly $860,000 in total repayments, including interest, Barasch said. Suspecting illegal usury, the attorney said he refused and offered to repay the $355,000 Santiago received, plus 19%.

"I couldn't let him be fleeced by this company," Barasch said.

RD Legal filed a Manhattan Supreme Court lawsuit against Barasch's law firm and Santiago in 2016. The case was dismissed in January amid RD Legal's plans to refile the lawsuit in a New Jersey court.

Barasch contacted the New York Attorney General's office about the episode, helping launch the investigation of RD Legal

Separately, the Securities and Exchange Commission in July announced fraud charges against RD Legal Capital and Dersovitz for allegedly misrepresenting the type and diversification of assets managed in two funds.

The company marketed the funds as investment opportunities in financial resolutions linked to attorneys' fees in settled lawsuits, the SEC alleged in an administrative proceeding. But the funds instead mostly invested in unsettled cases, lawsuits unaffiliated with any law firm and other cases "for which collection was still subject to significant litigation risk," the SEC said.

The case is pending, and RD Legal Capital is contesting the allegations.


Above article by , Updated February 8, 2017, USA Today








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