Lawyers Accused of Ducking Texas Laws

SAN ANTONIO (CN) - Lawyers in Texas and California, "masquerading as attorney referral services (and) unregulated debt negotiators," conspired to create a "debt relief program" to duck Texas laws on attorney solicitation and advertising and debt management services, a class action claims in Federal Court.

Plaintiffs claim attorneys from The Palmer Firm and The Seidman Law Firm created the Debt Relief Group to try "to elude strict attorney advertising and solicitation restrictions," and "give potential debtor clients the false impression" that their services have "the aura of legitimacy."

According to the complaint:

The Debt Relief Group is a Nevada corporation that does business out of Irvine and Mission Viejo, Calif.

The Palmer Firm is a Texas professional corporation that does business in California out of an Irvine office and a Rancho Cucamonga PO box, with its principal office in Dallas. Its principal attorneys are defendants Robert Ancel Palmer III, of Texas, and Gregory M. Fitzgerald, of California, whose last known address was in Fontana, according to the complaint.

The Seidman Law Firm also uses a PO box in Rancho Cucamonga and has its principal office in Dallas.

Scott R. Seidman and his firm "conceived, developed and copyrighted the debt management services scheme" at issue, and used it with Palmer, Fitzgerald and co-defendants Epic, Keith Waring and Joan Kearns "to defraud debtor clients nationwide," according to the complaint.

Plaintiffs claim the defendants failed to disclose to the Texas State Bar Advertising Committee that they provide services out of California, and are the creators and sole principals of the Debt Relief Group.

"The Texas Finance Code ... provides that a fee related to a debt management plan service may not be charged until the provider has registered" with the Texas Consumer Credit Commissioner, which the defendants have failed to do, the class claims. Nor does the State Bar of Texas show any applications "for advertising approval to establish and maintain" the multiple Web sites the defendants use, according to the complaint.

The class claims that the Debt Relief Group "served as the front to provide the debtor client referral source to the Palmer Firm for debt management services disguised as legitimate services."

Since January 2005, the Seidman Law Firm has advertised itself as "the nation's premier debt settlement firm," according to the complaint. Its Web page claims, "Since our founding, we have represented thousands of clients, and saved them literally tens of millions of dollars," and allegedly features a "Shocking Report! Legally & Morally Cancel Your Debt".

The class seeks damages for conspiracy and violations of the Debt Management Service Act. It is represented by Thomas Crosley.

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