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Front Page > City&Region > Merchants of Debt
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MERCHANTS OF DEBT/FOLLOW-UP
Rules urged for debt lawyers


Bar association president wants guidelines to prevent unethical collection tactics

By FRED O. WILLIAMS
News Business Reporter
8/4/2006
The legal profession should draft ethics rules for debt collection lawyers in order to fight shakedown tactics, Erie County Bar Association President Stephen R. Lamantia said.

"We're concerned about the public's perception of lawyers; we have a duty to protect the public," he said.

Lamantia said he will take up the issue with New York State Bar Association President Mark Alcott and with the group's ethics committee.

Stories in The Buffalo News last month documented a rash of outrageous tactics by some area collection agencies and collection law firms.

At Lenahan Law Office, for example, collectors threatened to arrest debtors and seize their homes; revealed people's confidential financial information; and demanded payments from people who didn't owe money.

Lenahan partners have testified that they didn't manage the collection offices and pulled their name from them last fall.

A Buffalo debt-buying company called Account Management Services agreed last month to pay $200,000 to end civil charges of being the real operator of the offices. The lawsuit by Maine's attorney general named the company and its officials Mark Bohn, Douglas MacKinnon, James Reeves and Jack Sortino.

"This company hid behind the facade of law firms," Maine's director of Consumer Credit Regulation William Lund said in a statement.

Numerous collection law firms linked with Account Management Services continue to do business around Erie County, a few of them in former Lenahan locations. Bohn has said he works with more than a dozen area lawyers.

One of them was Craig D. Hannah, now a Buffalo City Court judge. He operated a collection office briefly last year with debts provided by Account Management Services.

Hannah said he supervised the approximately 25 collection workers and worked in the Transit Road office daily.

"AMS was my client - I had several clients," he said.

Lamantia said most collection lawyers operate ethically.

"When an attorney is actively involved, we don't see the complaints," he said. "When a debt collector aligns itself with a law firm, that's where [problems arise.]"

Courts have said attorneys must have "meaningful involvement" with collection offices that operate under their name. The level of required involvement isn't spelled out, making it difficult to crack down on collection businesses that masquerade as law firms.

Lamantia said he would recommend the bar association create guidelines for lawyers whose practice focuses on collecting debts.

While the state bar association writes ethics rules for lawyers, it doesn't crack down on illegal conduct, Lamantia said. That's the job of the Attorney Grievance Committee, a unit of the New York Court of Appeals.

Court officials said the disciplinary committee did its job - two years after complaints about Lenahan surfaced.

John Daniel Lenahan turned in his license to end disbarment proceedings in April.

"It's essentially a disbarment," said Patricia Morgan, deputy clerk of the appeals court's 4th Department based in Rochester.

Maine regulators had filed a complaint against Lenahan in 2004 after finding what they called a pattern of illegal acts by the firm's collectors.

That Lenahan pulled his name from the collection business months before losing his law license doesn't mean the disciplinary committee missed the boat, Morgan said.

"He abandoned that business in the middle of a disciplinary proceeding," she said. "It's not like he had an attack of conscience."

Lamantia noted that lawyers face the loss of their license for collection abuses, a check on their practices that other debt collectors don't face.
e-mail:
fwilliams@buffnews.com


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