Northern Leasing Systems Lawsuit
The initial lawsuit:
On April 11, 2016, the New York State Attorney General filed a lawsuit against Northern Leasing Systems, Inc., a New York company, and several of its affiliated companies, including Lease Finance Group LLC, MBF Leasing LLC, Pushpin Holdings LLC and others (collectively "Northern Leasing"), as well as principal, Jay Cohen a/k/a Ari Jay Cohen, law firm Joseph I. Sussman, P.C., and other individuals involved in Northern Leasing's operations, alleging that these entities engaged in fraudulent and deceptive practices that trap small business owners and employees across the country into lease agreements for over-priced credit card processing equipment. The lawsuit further alleges that Northern Leasing and their attorneys abused the judicial process by suing to collect on these leases in the Civil Court of the City of New York, regardless of where the individual sued resides or where the transaction occurred. The majority of individuals sued lived in states other than New York. Some lived as far away as California. The Attorney General on behalf of the People of the State of New York, and the Deputy Chief Administrative Judge for New York City Courts, Deborah A. Kaplan are joint petitioners in this proceeding.
Important Court Decisions:
On June 8, 2020, the Court issued a decision finding that the Attorney General had proved her claims and ordered extensive relief, including an order rescinding all equipment leases obtained by Northern Leasing, awarding restitution to lessees and guarantors and vacating default judgments obtained by Northern Leasing in New York City Civil Court. The court also ordered an accounting to determine the amount of restitution to be paid.
As a result of the court's decision, Northern Leasing, Lease Finance Group, MBF Leasing, Pushpin Holdings LLC, Golden Eagle Leasing, Lease Source-LSI, and the other respondents were required to stop all the following activities:
- all Automated Clearing House (ACH) payments or other automatic payments to Northern Leasing based on any existing equipment finance lease
- all efforts to collect on any existing equipment finance lease or judgment (including but not limited to sending collection notices, threatening legal action, filing new legal actions, or prosecuting any pending legal action)
- purchasing or originating any new equipment finance leases
- selling any equipment finance leases that they own or service to other entities
This means, among other things, that these companies should no longer be deducting money from your bank account on current leases or to satisfy a default judgment entered against you.
To find out if your default judgment has been vacated, you can search for your name in the judgment lists below.
If you are attempting to obtain a mortgage or other form of credit, and are being prevented from doing so due to a default judgment held against you in New York City Civil Court by a Northern Leasing entity, you may want to consider taking the following steps:
- Search for your name in these lists of the judgments that have been vacated.
- Prepare a letter to your lender using this template letter. If you need additional assistance, please email firstname.lastname@example.org.
- If you have any questions about the status of your default judgment, you may wish to contact an attorney for advice on how to handle your particular case.
On September 25, 2023, the Court also issued a decision awarding monetary relief against Northern Leasing for over $680 million and against their attorneys for over $9.3 million.
No funds have been collected pursuant to this judgment at this time. If funds become available, lessees will be notified.
Lawsuit against Northern Leasing Spin-Off Entities (NLS Equipment Finance and Leasing Expenses Company)
The Attorney General has also stopped efforts by parties affiliated with Northern Leasing to continue this scheme under new names. The Court granted all of the relief requested by the Attorney General in a lawsuit filed November 23, 2020 against NLS Equipment Finance LLC, Leasing Expenses Company LLC, and several affiliated entities, as well as Ariel Schachter, Sara Krieger, Leonard Mezei and Jay Cohen (a/k/a Ari Jay Cohen, who was also named in the original Northern Leasing lawsuit) (collectively, "NLS-EF"). The Court agreed with the Attorney General that NLS-EF was collecting on leases that were rescinded by the court in the Northern Leasing proceeding and engaging in the same practices found by that court to be part of a fraudulent scheme. The Court also agreed that NLS-EF involved the same people as Northern Leasing, running the same exact fraudulent scheme, and generating the same complaints from defrauded small business owners.
The Court issued an Order and Judgment to stop these practices and grant the relief sought by the Attorney General. The Court's order, among other things:
- bars Leasing Expenses Company, NLS Equipment Finance, and any other entity that is owned, operated, controlled or created by Schachter, Krieger, Mezei and Cohen from collecting on equipment finance leases, including by deducting money from any individual's bank account or entering into new leases with anyone.
This means, among other things, that these companies should no longer be deducting money from your bank account on current leases or entering into new leases with you.
The Court also granted the Attorney General's request that these parties be required to return money they collected as restitution to defrauded lessees, among other relief. The Attorney General anticipates further proceedings to determine the full extent of restitution that may be available to victims of this scheme.
Please check back here periodically for updates.