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Both Collection Agency Owner and Plaintiffs’ Attorneys He Accused Of RICO Violations File Appeals

Both the plaintiff and the defendants have appealed rulings in a case filed by a collection agency owner against a number of plaintiffs’ attorneys accused of engaging in a “mafia” style racketeering scheme by soliciting clients and then filing class-action lawsuits, seeking to settle the claims before the suits ever saw a courtroom.

The plaintiff, Jeffery Winters, owns Collection Solutions, based in Hackensack, N.J. The defendants are Joseph K. Jones, Benjamin J. Wolf, Laura S. Mann, Ari H. Marcus, and Yitzchak Zelman.

In January, a District Court judge in New Jersey ruled that an amended complaint filed by Winters was “riddled with factually unsupported accusations and wholly conclusory language” and gave him 30 days to file an amended complaint. At the same time, the judge, John Michael Vazquez, denied a motion for sanctions pursuant to Rule 11 filed by the defendants.

Each side has appealed the ruling against them to the Third Circuit Court of Appeals. Winters’ appeal can be accessed here. The appeal from Laura Mann can be accessed here. The appeal from Ari Marcus and Yitzchak Zelman can be accessed here.

In his appeal, Winters is arguing that:

The Court below erred in viewing the elements of the Rico Enterprise and Scheme separately and not as part of the alleged Enterprise, thereby de-criminalizing an obviously reprehensible pattern of conduct. The Court also erred in not adequately considering the RICO Case Statement and Affidavits of Merit filed together with and as part of the Complaint; and in erroneously carrying over its flawed analysis into its evaluation of the allegations of fraud, negligence, and legal malpractice.

In his original complaint, filed in December 2016, Winters alleged that the defendants found their cases by using collection letters and communications subject to the Fair Debt Collection Practices Act and soliciting the cooperation of those who received the letters. The defendants would then construct “unsubstantiated and theoretical damage scenarios alleging illusory class-wide statutory damages, usually invalid in any case due to the lack of any actual damages,” file class-action lawsuits against the issuers of the collection letters without any plan to actually have the cases certified as class actions, then seek to settle for “mid-five or low-six figure” attorneys fees, based on the premise that the collection agencies would rather settle than continue with the litigation.

But Judge Vazquez was not convinced. In his January ruling, which dismissed the complaint, but provided 30 days for Winters to file a second amended complaint, he said:

If Plaintiffs believe that Defendants are conducting some nefarious scheme, then Plaintiffs will have to conduct much more due diligence to plausibly plead their claims rather than relying on PACER print-outs, a legal seminar, and other anecdotal information — all of which is benign on the surface (if not common practice).

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