Policyholders should exercise caution regarding digital “case runners” who engage in the unethical—and potentially criminal—practice of soliciting clients for attorneys after large-scale disasters. While it’s perfectly lawful for attorneys to advertise their services, the act of compensating non-attorneys to procure and refer clients breaches ethical standards. In many jurisdictions, this can also carry criminal penalties.
I highly recommend that regular readers of this blog subscribe to the Barry Zalma Fraud Newsletter. Zalma offers insightful, ongoing commentary on the McClenny, Moseley & Associates (MMA) debacle. His newsletter serves as a rich resource, offering numerous lessons and cautionary tales. Policyholders, it’s crucial to thoroughly research lawyers and their professional standing prior to engaging their services. It’s important to remember that you should never feel coerced into signing any contract.
A poignant illustration of Zalma’s detailed coverage is his examination of the MMA case, which serves as a stark reminder of the consequences that can arise from neglecting due diligence in the legal representation selection process:
September 18, 2023
Access Restoration Services U.S., Inc. and MMA Scheme Alleged in Detailed New Orleans Court Pleading
In Civil District Court for the Parish of Orleans Access Restoration Services U.S., Inc. sued local Movie Studio Starlight Studios in February 2023 seeking payment of $1,364,569.49 for ‘emergency services’ after Hurricane Ida.
The story continues: ‘On August 31 and September 1, 2021, several of MMA’s lawyers advised Starlight to hire ARS to assist in mitigating Starlight’s losses.’
‘Unbeknownst to Starlight at the time . . .MMA’s reason for advising their client, Starlight, to use ARS was so that ARS would make the multi-million-dollar loan to MMA. ARS in fact loaned MMA $3,000,000 with the expectation that MMA would refer ARS… over $10,000,000 in work.’
‘Unbeknownst to Starlight at the time . . . the State of Louisiana had not legally authorized ARS to do contracting work in the State of Louisiana.’
‘Specifically, ARS has overcharged for much of the work it performed and has negligently damaged the buildings Starlight leases and owns.’
MMA is also accused of not providing amounts of $56,980.83 to Starlight and electronically transferring ‘$688,990.57 into an account that did not belong to Starlight.’ They claim that MMA transferred cash belonging to Starlight into the account of a ‘hacker.’
The more time goes by, the more of MMA’s mess gets revealed.
Barry Zalma is calling out attorney advertising and “lead generation” firm, Velawcity, for illegal case running. It is a modern-day version of case running, which is explained by Zalma as follows:
Velawcity Sales Consultant Admits Scheme in Podcast
Former Velawcity Mass Tort Marketing Consultant Brian Vogel admits Velawcity Marketing Scheme in Market My Market Legal MastermindPodcast….
Vogel admits Velawcity’s role as follows in his profile:
‘Velawcity partners with law firms to help them build their mass tort dockets. Marketing investments range from $75,000 to over $200M+ annually. Acting on behalf of the law firms, leads are run through our call center and vetted to make sure they meet client criteria. Once qualified, packets are sent out for signature and delivered electronically to the firm.’
In the podcast, Vogel admitted that Velawcity ‘its a one-step process that kind of simplifies having to go to multiple different people to get someone signed up and sent over to whoever is handling the cases.’
‘When you’re buying leads . . .You may have the marketing company that has an intake center that it runs all those leads after they’re vetted and tries to get those contracts signed and sent back over to you.’
He refers to getting the ‘right types of ‘packets’ back to your law firm.’
Velawcity has been referred to by multiple Louisiana Judges as a ‘modern-day case runner that MMA pre-paid for clients. https://lnkd.in/gsvjiGRD Being a runner is a felony in Louisiana.’
Velawcity admits on its website https://lnkd.in/gHZUprhA that it has active campaigns.
With what has been admitted to and established in court orders, the Judges presiding over these matters should report their findings to the U.S. Attorney for prosecution.
To date, there has been no public statement from Velawcity in response to these claims. It is a clear breach of legal ethical standards for non-lawyers to advertise legal services, enlist clients on behalf of attorneys, and then receive a commission for each client obtained. Federal judges have pointed out that this is precisely the arrangement MMA had with Velawcity, and Zalma’s observations suggest that Velawcity may be engaged in similar practices with other law firms.
For policyholders, there’s a vital takeaway: Choosing an attorney based solely on their advertising can be a flawed approach when faced with significant legal issues. The skills, track record, and standing within the legal community of lawyers who rely heavily on advertising often do not represent the highest quality available to policyholders. It is essential to conduct thorough research and pose pertinent questions regarding any attorney prior to entering into a contractual agreement. Be aware that you could be the target of a lead generation service, and it is wise to steer clear of such entities.
Thought For The Day
Advertising may be described as the science of arresting the human intelligence long enough to get money from it.
—Stephen Leacock
