The Long Island head of one of the largest process-serving firms in the state was arrested Tuesday morning on charges of running a massive fraud scheme by failing to properly serve court papers on thousands, authorities said.
As a result of the actions by William Singler, the head of American Legal Process in Lynbrook, the victims from Long Island and around the state had their finances frozen or wages garnished without a chance to contest legal actions against them by creditors, New York State Attorney General Andrew Cuomo said.
Farmingdale law firm for violating the state consumer protection laws.
The firm, Forster and Garbus, is one of the major ones in the state that specializes in debt collection and employs Singler's firm in many of its debt-collection actions, Cuomo said. State law requires that a notice be filed before a civil suit can be brought under consumer protection laws.
Essentially, Cuomo charged that the overall scheme involved thousands of instances of so-called "sewer service" in which the notice required to be given to the defendants in a lawsuit is not properly served - but might as well have been dropped down a sewer.
"The laws of this state are supposed to ensure that each and every New Yorker has their day in court," the attorney general said in a statement. "If proven true, the schemes detailed in the cases filed Tuesday undermined the legal rights of thousands of citizens by corrupting our legal system and abusing individuals who happened to have consumer debts."
In specific reference to the action against Forster and Garbus, Cuomo said: "I am putting all law firms on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents. Law firms cannot turn a blind eye to abuses perpetrated on their behalf."
Singler's attorney, Corey Winograd of Manhattan, said his client intends to plead not guilty, and was not aware of any illegal or inappropriate actions by the process servers he employed.
Winograd said Singler "trusted" them and now "some betrayed that trust."
Cuomo said that of the 98,000 summonses that American Legal Process swore it had served between January 2007 and October 2008, 28,000 were done for Forster and Garbus.
Forster and Garbus "failed to supervise and relied on legal papers from ALP that it knew or should have known were false," Cuomo said.
Ronald Forster, the senior partner of Forster and Garbus, said the firm intends to "vigorously defend" the state lawsuit. Forster said "it's kind of silly to hold me responsible" for the actions of an independent contractor. Forster said his law firm employs 250, uses more than 10 different process-serving firms, and has "a good reputation."
The legal actions against Singler, his company, and the Forster and Garbus firm are the first cases brought in a wide-ranging investigation by the attorney general's office into possible abuses by three different businesses that are involved in debt collection, at a time of increasing financial problems for many consumers, according to sources familiar with the scope of the probe.
The three are process-servers; law firms that specialize in debt collection; and so-called debt advisory services that offer to help consumers who are over their heads in debt to credit-card companies and other businesses. The sources stressed that there are many legitimate entities involved in the debt-collection industry.
Newsday first reported the existence of the investigation earlier this week.
Cuomo said that, working with the office of the state's chief administrative judge, his investigators had found many egregious instances of apparently false clams that debtors had been notified of impending court actions against them.
In one case, the attorney general said, one of ALP's process servers claimed "to have been at four different addresses at the same moment."
In another case, he said, one process server claimed to have driven around the state 10,000 miles in a single day to serve various people.
Singer is scheduled to be arraigned in District Court in Hempstead later Tuesday on charges of criminal possession of a forged instrument, offering a false instrument for filing, operating a scheme to defraud, and committing fraud through being a notary public.