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North Palm Beach law firm raided as stunned employees look on

By Kimberly Miller - Palm Beach Post Staff Writer

Law enforcement officials raided a North Palm Beach-based law firm Wednesday, freezing the company’s assets and issuing a temporary restraining order as stunned employees milled outside of the office.

The Hoffman Law Group, which has been the subject of nationwide complaints from homeowners who paid thousands of dollars to join so-called “mass litigation” lawsuits, had been under investigation by the Florida attorney general’s office for alleged violations of the state’s Deceptive and Unfair Trade Practices Act.

A federal complaint posted to the glass door of the law firm showed the asset freeze and restraining order were filed by the Washington, D.C.-based Consumer Financial Protection Bureau and the attorney general’s office.

Also named in the complaint were the firm’s lead attorney, Marc H. Hoffman, Michael Harper, Benn Willcox and related companies, Nationwide Management Solutions, Legal Intake Solutions and BM Marketing.

The Palm Beach Post first wrote about the Hoffman Law Group last year when the State of Idaho Department of Finance ordered the firm to stop sending “misleading” advertisements to Idaho homeowners. The Post followed with an April story about dozens of complaints lodged against the company with the Better Business Bureau and attorneys general nationwide.

At least two former employees also wrote formal complaints, alleging boiler room-style sales tactics that they said roped homeowners into joining the mass litigation lawsuits. Homeowners paid a $6,000 retainer and $495 per month in “maintenance fees” to be parties to the lawsuits, which have mostly floundered in federal court.

Some borrowers also allege they were promised foreclosure defense by intake representatives at the firm, but either never received it or were referred to another firm for an additional cost.

“They promised a reduction of the principal balance, 30 percent equity, and erasure of all negative/late payments on my credit report,” wrote Illinois resident Sarah Schoppman in a February 2013 letter to that state’s attorney general. “However, I have found no evidence of this group doing anything on my behalf.”

Hoffman, a 40-year member of the Florida Bar who is in good standing with the regulatory group, could not be reached late Wednesday. A phone number once listed on the Hoffman Law Group’s website has been disconnected for at least a week, and no employees wanted to be interviewed Wednesday.

The federal complaint has been temporarily sealed so details of the lawsuit remain unknown, but former Hoffman attorney Michele Stephens said homeowners were solicited through mailings, TV commercials and phone calls, and then signed up for electronic bank drafts for payments.

Stephens resigned in February after growing concerned that homeowners were being duped and that she was expected to consult with clients from dozens of states when she was licensed to practice law only in Kentucky.

According to her complaints, the mass-litigation lawsuits, which named dozens of homeowners and multiple banks, were being voluntarily dismissed by Hoffman attorneys working in New York or dismissed by federal judges who found the plaintiffs not “logically connected.”

Consumer protection agencies have warned homeowners in recent years to be wary of joining a mass litigation suit. In 2011, the Better Business Bureau said homeowners should “steer clear” of mailings asking them to join national lawsuits to force their mortgage companies to cut their loan payments.

The Federal Trade Commission followed a year later with its own warning, going so far as to call the lawsuits a “scam targeting financially strapped homeowners.”

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