f/k/a . . . the archives

March 24, 2005

a bit behind

Filed under: pre-06-2006 — David Giacalone @ 2:20 pm









easter snow

a piece of egg shell

in the sandwich

 

 

 

 





 

 

 

a fat horse

gallops with the others

a bit behind

 

 

 

 

 

 

 

 

 

 

swaying branch

the warbler’s song

rises and falls

 

 

 

 

 


“easter show” from A Piece of Egg Shell (Magpie Haiku Press, 2004)

“a fat horse” & “swaying branch” from “something to sing about”, pawEprint 58 (2003)

 

 

 

 

 


by dagosan 



floes jam


below the trestle –


a flood of warnings


 


 


                  [March 24, 2005]

 

potluck


Capoccia Scandal Update [D'oh! file]:  The Bennington Banner reports that Howard Sinnott,

Andrew Capoccia’s former partner “teared up telling the jury he expects to be disbarred

for his crimes.”


“Seeing what I’ve done, I’m not sure I have, um,” he said, pausing and

looking down, “the character to practice law.” Sinnott pleaded guilty in

February to two felony charges of interstate transfer of stolen funds.

(Bennington Banner, “Sinnot takes stand in fraud trial,” March 24, 2005)

We argue here, that the “debt reduction services” cash-cow that created the illicit Capoccia-  jailbird neg

Sinnott bankroll should have been stopped in its tracks five years ago, averting this major

scandal.

 

“tinyredcheck”  Shame-o-meter:  I don’t know if Romolo Versaci will be deterred by e-shaming from pursuing

meritless vendettas against vulnerable adversaries, but I hope you will remember his case.  Before

he decided he had to protect his reputation from an online reference to him as a “so-called lawyer,”

Attorney Versaci’s only internet presence was a listing in a lawyer directory.  I just Googled

Versaci”>, and the directory listing is now the 72nd result, behind 71 links related to his much-

derided defamation lawsuit.  Are we learning any lessons out there?

 

tiny check haiku pointer: check out Paul and Mary Mena’s photo-haiku combo on “signs of spring.”

 

5 Comments

  1. David: Your postings about this case are very timely in light of the proposed bankruptcy legislation which (as I understand) will mandate six months of credit counselling prior to filing bankruptcy. I know that a few of my colleagues have expressed some interest in capitalizing on the increased need for debt reduction services. These services (whether run by attorneys or not) have a reputation for being unscrupulous – and I hope that those attorneys who do decide to enter the field take heed of Cappiacola’s bad acts and avoid that conduct at all costs.

    Comment by Carolyn Elefant — March 25, 2005 @ 11:41 am

  2. David: Your postings about this case are very timely in light of the proposed bankruptcy legislation which (as I understand) will mandate six months of credit counselling prior to filing bankruptcy. I know that a few of my colleagues have expressed some interest in capitalizing on the increased need for debt reduction services. These services (whether run by attorneys or not) have a reputation for being unscrupulous – and I hope that those attorneys who do decide to enter the field take heed of Cappiacola’s bad acts and avoid that conduct at all costs.

    Comment by Carolyn Elefant — March 25, 2005 @ 11:41 am

  3. Thanks, Carolyn.   You might want to check the FTC news webpage on March 30, as there will be a press conference:

    “to announce three law enforcement actions targeting deceptive and misleading debt-related services. The FTC charged that the operations scammed consumers out of more than $100 million.”

    Your linkage with the new bankruptcy act is particularly apt.  Many of the most-affected Americans — those in the middle class with huge debts — are exactly the clients who were the target of the Capoccia-Sinnott debt reduction scam:  people who strongly wished to avoid bankruptcy AND still had enough liquid assets or great enough income to pay many thousands of dollars for the so-called “services.”  
    I hope lawyers will shy away from the debt-reduction game, which really doesn’t require legal skills.  For Capoccia, it was basically using a letter hinting at bankruptcy if the creditors fail to greatly reduce their debt demands.  That’s an action that many credit card companies will do directly with card holders, if they want to work out a repayment plan.  Since there is no right to a debt reduction, no lawsuits are contemplated.  Some negotiation might go on, with an exchange of letters or phone calls.
    Lawyers who want to charge “reverse contingency fees” (a fee based on the amount of savings achieved for the client) for debt-reduction services should pay close attention to ABA Formal Opinions 93-373 and 94-389.   Many of Capoccia’s fee practices seem highly inappropriate, including:

    taking a contingency fee up-front
    basing such a fee on a bloated estimate of future savings (up to 70% of the total debt)
    charging 25% or more of the savings, despite the fact that there was no litigation contemplated and no services other than letters (and maybe phone calls) provided
    not informing the client of the tiny amount of actual “lawyering” being done
    The services offered by the Capoccia firm might be useful for some debtors, who do not want to deal directly with creditors.   However a reasonable fee would surely be a very modest flat fee (perhaps based on the number of creditors involved); a very small contingency percentage (perhaps 3% of savings achieved); a mixed flat fee plus an incentive bonus of 1% of savings achieved; or an hourly fee (with different rates for attorney time and nonlawyer time).  
    If possible, the client should be given enough information to understand the nature of the services that would be performed and an opportunity to choose among payment options.  If a reasonable fee were charged, the massive amounts of money accumulated by Capoccia-Sinnott — $23 million stolen according to the federal indictments — will never materialize, greatly reducing the incentives for lawyers to enter this field.
     

    Comment by David Giacalone — March 25, 2005 @ 6:47 pm

  4. Thanks, Carolyn.   You might want to check the FTC news webpage on March 30, as there will be a press conference:

    “to announce three law enforcement actions targeting deceptive and misleading debt-related services. The FTC charged that the operations scammed consumers out of more than $100 million.”

    Your linkage with the new bankruptcy act is particularly apt.  Many of the most-affected Americans — those in the middle class with huge debts — are exactly the clients who were the target of the Capoccia-Sinnott debt reduction scam:  people who strongly wished to avoid bankruptcy AND still had enough liquid assets or great enough income to pay many thousands of dollars for the so-called “services.”  
    I hope lawyers will shy away from the debt-reduction game, which really doesn’t require legal skills.  For Capoccia, it was basically using a letter hinting at bankruptcy if the creditors fail to greatly reduce their debt demands.  That’s an action that many credit card companies will do directly with card holders, if they want to work out a repayment plan.  Since there is no right to a debt reduction, no lawsuits are contemplated.  Some negotiation might go on, with an exchange of letters or phone calls.
    Lawyers who want to charge “reverse contingency fees” (a fee based on the amount of savings achieved for the client) for debt-reduction services should pay close attention to ABA Formal Opinions 93-373 and 94-389.   Many of Capoccia’s fee practices seem highly inappropriate, including:

    taking a contingency fee up-front
    basing such a fee on a bloated estimate of future savings (up to 70% of the total debt)
    charging 25% or more of the savings, despite the fact that there was no litigation contemplated and no services other than letters (and maybe phone calls) provided
    not informing the client of the tiny amount of actual “lawyering” being done
    The services offered by the Capoccia firm might be useful for some debtors, who do not want to deal directly with creditors.   However a reasonable fee would surely be a very modest flat fee (perhaps based on the number of creditors involved); a very small contingency percentage (perhaps 3% of savings achieved); a mixed flat fee plus an incentive bonus of 1% of savings achieved; or an hourly fee (with different rates for attorney time and nonlawyer time).  
    If possible, the client should be given enough information to understand the nature of the services that would be performed and an opportunity to choose among payment options.  If a reasonable fee were charged, the massive amounts of money accumulated by Capoccia-Sinnott — $23 million stolen according to the federal indictments — will never materialize, greatly reducing the incentives for lawyers to enter this field.
     

    Comment by David Giacalone — March 25, 2005 @ 6:47 pm

  5. I understand your reservations David. There are many many companies and firms in this industry that are nothing but scams and are not working for the favor of the client. This is why people must do their diligence when it comes to dealing with settlement companies and law firms. However I must add using a law firm to perform such a services grants the client much more protection. First off attornies must abide by the strict bar regulations of the state they practice in. That being said you are going to find a much more legitimate service through a firm as opposed to just abc company, who can scam people close their doors and open up as xyz company next week just to do it all over again. Where as if attornies get shut down by the bar for not doing the service they say that attorney can’t just go back and get another law license. Plus according to the Fair Debt Collection Practices Act collection agencies by law must deal with a clients attorney and not bother them anymore. Which is a huge plus when people are in debt more than they can handle and don’t need the harrassment and can’t possible pay back the full balance they owe.

    Comment by Steve B — April 26, 2007 @ 5:59 pm

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