The New York State Attorney General Andrew M. Cuomo Announces Arrest Of Long Island Business Owner For Denying Thousands Of New Yorkers Their Day In Court
LONG ISLAND, NY (April 14, 2009) - Attorney General Andrew M. Cuomo today announced criminal charges against Long Island-based American Legal Process (“ALP”) and its CEO and President William Singler for a fraudulent business scheme in which the company allegedly failed to provide proper legal notification to thousands of New Yorkers facing debt-related lawsuits, causing them unknowingly to default and have costly judgments entered against them without the chance to respond or defend themselves.
According to the court papers filed today, ALP, as a legal process server, was hired by high-volume debt collection law firms in New York to serve legal papers, usually a summons and complaint, notifying individuals that they are being sued and must answer the complaint. ALP, however, allegedly engaged in “sewer service,” where process servers take advantage of individuals facing lawsuits by failing to properly alert them and denying them the chance to respond. As a result, thousands of judgments were allegedly obtained against unsuspecting New Yorkers, many of whom first learned they were being sued when they found their bank accounts frozen or their wages garnished. ALP allegedly covered up the fraud by falsifying sworn affidavits of service in courts across New York. The Attorney General’s Office also filed a parallel civil suit against ALP and Singler seeking a court order prohibiting them from engaging in improper service of process, monetary damages and substantial penalties.
In addition, Cuomo announced his intent to sue one of ALP’s largest customers, the law firm of Forster & Garbus, for violations of New York State’s consumer protection laws. According to Cuomo, Forster & Garbus used ALP to serve over 28,000 summons and complaints across the state, but failed to supervise the company and relied on legal papers from ALP that it knew or should have known were false.
“The laws of this state are supposed to ensure that each and every New Yorker has their day in court,” said Attorney General Cuomo. “If proven to be true, the schemes detailed in the cases filed today undermined the legal rights of thousands of citizens by corrupting our legal system and abusing individuals who happened to have consumer debts."
With respect to the notice sent to the law firm of Forster & Garbus, the Attorney General said: "I am putting all law firms on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents. Law firms cannot turn a blind-eye to abuses perpetrated on their behalf.”
Legal process servers are hired by law firms to serve legal papers, usually a summons and complaint, which notify individuals that they are being sued. New York law explicitly states how summons must be served upon individuals facing legal action. A process server can deliver the summons directly to the person being sued; can deliver the summons to a substitute person of suitable age and discretion at the place of business or the home of the person being sued and then mail the summons; or, should the first two options be exhausted after several attempts, can nail and mail, meaning the summons is posted on the door of the home or workplace of the person being sued and the summons is mailed to them.
According to the court papers filed today, between January 2007 and October 2008, ALP claimed to have served 98,000 summons and complaints throughout New York State to New Yorkers alleged to owe debt. The majority of these were done through “nail and mail,” the method of service that is easiest to abuse. The Attorney General’s investigation revealed that thousands of legal documents were not properly served, or served at all, to the individuals they were intended for.
Furthermore, ALP allegedly attempted to cover up its unlawful business practices by falsifying documents, submitted to courts across the state, swearing that proper legal notification had been duly served upon these individuals. According to the criminal and civil complaints filed today, ALP’s conduct included:
- Instances in which ALP process servers claim to have made process serving attempts in more than one place at the exact same time. In one particular case, a process server claimed to have been at four different addresses at precisely the same moment;
- Instance in which an ALP process server claimed to have made process serving attempts that would have required him to drive more than 10,000 miles in a single day;
- Instances in which ALP process servers claim to have made process serving attempts before they had actually received the summons and complaint from ALP; and
- Instances in which ALP process servers claim to have made process serving attempts before the summons and complaint had actually been filed with the appropriate court.
According to the criminal complaint, Singler organized and orchestrated ALP’s fraudulent activities. He was personally responsible for notarizing thousands of legal documents submitted to the New York Courts in which his process servers purportedly swore individuals had been served, when they had not.
The civil lawsuit announced by Cuomo today charges that ALP and Singler violated multiple New York statutes by falsifying these legal documents, which were in turn used by debt-collection law firms who provided them to courts as proof that New Yorkers had been given proper legal notice of the lawsuits against them. In many instances, the individuals had not been given proper legal notice and failed to appear in court, ultimately having default judgments entered against them. The lawsuit seeks monetary damages, penalties and injunctive relief against both ALP and Singler.
The Attorney General’s letter today to Forster & Garbus provides the required five-day notice of his intent to sue the firm pursuant to NYS consumer protection law. In the same 20-month period in 2007 and 2008, Forster & Garbus used ALP to serve more than 28,000 summons and complaints throughout the state. In obtaining default judgments, Forster & Garbus submitted to courts ALP affidavits of service to show that service had been proper when in many cases it had not been. The Attorney General’s notice letter makes clear that Forster & Garbus, by failing to supervise ALP and relying on affidavits that it knew or should have known were false, has harmed the New Yorkers who were the defendants to its lawsuits, the courts, and the clients who that law firm was representing.
Attorney General Cuomo thanked the New York State Unified Court System, especially its Internal Audit Unit, for their help in the investigation, which included the review of hundreds of court files and more than 100,000 records of affidavits of service.
Ann Pfau, Chief Administrative Judge of the New York State Courts, said: “The integrity of the justice system depends upon the confidence of litigants and the public, and there can be no confidence when false affidavits of service are used to deprive parties of their right to be heard. This practice also inflicts substantial harm on individuals, subjecting them to judgments they had no opportunity to contest and imposing on them the significant collateral consequences of adverse judgments. I want to thank Attorney General Andrew Cuomo and his office for working so diligently with us to expose and bring to an end this practice, and to help restore integrity to the justice system.”
Carolyn Coffey, an attorney with MFY Legal Services, a nonprofit provider of free legal services, said: “The consequences of sewer service are profound, especially on vulnerable New Yorkers. In MFY’s 2008 report, Justice Disserved, we documented many victims of improper service who had judgments unknowingly entered against them, often to devastating effect. In one case, a disabled senior citizen who was a victim of sewer service attempted to withdraw money from his ATM to purchase medicine when he discovered his bank account was frozen. In another case, a single, working mother of two children who had no idea she had ever been sued, was buying food at a supermarket checkout counter when she learned her debit card would not work. In both cases, our clients could not pay their rent and had to borrow money for food. MFY applauds Attorney General Cuomo for taking the initiative to combat this illegal practice, especially because sewer service often injures the elderly, disabled and working poor of New York.”
ALP and Singler are both charged with Criminal Possession of a Forged Instrument in the Second Degree (a class D felony), three counts of Offering a False Instrument for Filing in the First Degree (a class E felony), and Scheme to Defraud in the Second Degree (a class E felony). Singler is also charged with being a Notary Public committing Fraud in Office (a class A misdemeanor).
The charges are merely accusations, and the defendants are presumed innocent until and unless proven guilty.
The criminal case is being prosecuted by Assistant Attorney General Cydney Kelly under the supervision of the Richard Ernst, Deputy Bureau Chief of the Criminal Prosecutions Bureau, and Gail Heatherly, Bureau Chief of the Criminal Prosecutions Bureau. The investigation was handled by Investigator Sandra Migaj, under the supervision of Deputy Chief Investigator James Domres.
The civil lawsuit was filed today in the Supreme Court of the State of New York, Erie County.
This civil lawsuit and investigation is being handled by Assistant Attorney General James Morrissey, in conjunction with the Dennis Donnelly, George Danyluk, Aric Andrejko and Dan Johnson of the Internal Audit Bureau of the New York State Unified Court System.