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Post date: December 14 2016

A.G. Schneiderman Announces Settlement With Legal Document Company For Multiple Violations Of Court Orders

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
December 14, 2016

New York City Press Office / 212-416-8060
Albany Press Office / 518-473-5525
nyag.pressoffice@ag.NY.gov
Twitter: @AGSchneiderman 

A.G. SCHNEIDERMAN ANNOUNCES SETTLEMENT WITH LEGAL DOCUMENT COMPANY FOR MULTIPLE VIOLATIONS OF COURT ORDERS

Order Bans NextGenJustice (Formerly “Legal Docs By Me”) And Owner, Derek Distenfield, From Preparing Legal Documents For New Yorkers Without Additional Protections

Contempt Action Previously Secured $24K In Refunds; Consent Order Requires More Consumer Refunds; $20K In Penalties

Schneiderman: We Will Keep Working To Hold Business Owners Who Defraud Hardworking New Yorkers Accountable

WATERTOWN – Attorney General Eric T. Schneiderman announces a Consent Order and Judgment resolving civil and criminal contempt actions brought by the Attorney General against Derek Distenfield and his businesses related to multiple violations of prior court orders. The Order, signed by Supreme Court Justice James P. McClusky, permanently bars Distenfield from conducting any legal document preparation business for New York consumers unless certain consumer protection conditions are met. Distenfield's business, NextGenJustice, (formerly known as Legal Docs By Me), offered legal documents prepared by non-lawyers in store locations in Watertown and Syracuse.

The Attorney General’s office alleged that consumers were subjected to bait-and-switch pricing, as well as being sold complex legal documents prepared and edited by non-lawyers with no legal training. In the Consent Order, Distenfield acknowledges violations of the prior orders.

"No person or business is above the law," said Attorney General Schneiderman. "This settlement sends the message that all businesses must abide by the laws of New York, the orders of the courts in this State, and that my office will not stand idly by while hardworking New Yorkers are defrauded." 

As a result of this Consent Order, Distenfield is permanently barred from engaging in the business of preparing legal documents in New York without first complying with additional requirements designed to protect consumers. These requirements include posting a $100,000 performance bond, hiring an attorney—subject to the Attorney General's approval—to monitor the business's activities and ensure compliance with state law, and pay any attorney's fees consumers may incur as a result of defective legal documents. Distenfield is also required to pay full restitution to consumers who may have been deceived by advertising for tax services found to be deceptive by Justice McClusky, and pay a civil contempt penalty of $20,000 to the State of New York.

This case originated in June 2014, when the Attorney General obtained a temporary restraining order against Distenfield and his businesses, charging that Legal Docs by Me engaged in deceptive business practices and the unauthorized practice of law. Those proceedings were settled by an earlier Consent Order and Judgment in October 2014, which prohibited Distenfield and his business from engaging in certain illegal business practices, required Distenfield to pay restitution to all consumers to that date, and ordered the businesses to pay a penalty of $15,000.

The Attorney General initiated the first contempt in April 2015 and provided evidence that Distenfield and NextGenJustice violated the temporary restraining order and the October 2014 consent order by failing to refund or account for all consumers and deceptively advertising their new tax return preparation services, among other violations. As a result of the first contempt proceeding, the Attorney General secured over $24,000 in refunds for consumers that Distenfield had withheld despite the original consent order.

In the second contempt motion, the Attorney General alleged that the business continued to violate state law and the 2014 consent order by engaging in the unauthorized practice of law. The motion demonstrated that NextGenJustice employees regularly provided legal advice to consumers, drafted letters on their behalf to various courts, and prepared legal documents in violation of the Court's order. The Consent Order announced today resolves all outstanding claims by the Attorney General.

The contempt proceedings were handled by Assistant Attorney General Alicia M. Lendon and Investigator Chad Shelmidine, under the supervision of Assistant Attorney General In Charge Deanna R. Nelson and Executive Deputy Attorney General for Regional Offices Martin J. Mack.