By Joseph A. Mann, Jr., FloridaBulldog.org
A team of Miami-based attorneys has taken the first steps in auctioning off tens of millions of dollars in assets seized after a nationwide debt-relief scam headquartered in Pompano Beach was shut down last year by a District Court injunction.
At two recent auctions in Broward County, bidders purchased luxury autos (a Tesla, BMW and Range Rover), two school buses and an unfinished luxury home in Fort Lauderdale, yielding nearly $1.4 million. The funds are to be deposited in an account that will be used to reimburse thousands of individuals who were defrauded in the debt-relief scheme.
The auctions were organized by Jonathan E. Perlman, a shareholder at the Miami-based law firm Genovese Joblove & Battista P.A, and the court-appointed Receiver in charge of identifying and recovering assets related to the debt scheme, and his team of attorneys.
“So far, our team has identified $32 million in assets, and we believe the total assets in this case may reach over $80 million,” Perlman told the Florida Bulldog.
“This is a difficult case. We’re proud of the progress we’ve made so far, but it’s a long, slow slog. There’s still a lot to be done. Our job is to trace and chase assets, and file motions to recover them.”
More asset sales are planned for the coming months, he added. To convert assets to cash, the Receiver’s office may contract with auction companies, or sell assets (like real estate) through brokers or in private sales.
Federal Trade Commission civil action
The debt-relief scam was made public in May 2017 when the office of the Florida attorney general and the Federal Trade Commission (FTC) filed a civil action against Jeremy Lee Marcus, Craig Davis Smith, Yisbet Segrea and a spate of companies they managed. The group defrauded about 15,000 financially distressed people across the country, promising to reduce their outstanding debts while doing nothing to eliminate existing obligations and fleecing them for additional money. (Case No. 17-60907-CIV-ALTONAGA in the Southern District of Florida.)
Marcus was identified as the CEO and an owner of the group of companies involved in the debt-reduction scheme; Smith was the COO and another owner, and Segrea was an executive who ran the group’s office in Panama.
Dozens of affiliated companies – such as 321 Loans, Helping America Group and Financial Freedom National – were used to siphon money from victims.
As a result, the U.S. District Court enjoined these individuals and their companies from further operations. Perlman was appointed Receiver at the same time and began the formidable task of investigating the defendants and the myriad companies they controlled, and attempt to recoup funds for defrauded customers. Perlman has extensive experience in managing cases of this nature.
No criminal charges have been filed in the case. Marcus and Segrea are believed to be in South Florida, while Smith is reportedly in Minnesota.
The identities of the victims, many of whom fell prey to online come-ons, have not been made public.
Perlman said that the $32 million in assets identified to date includes a wide variety of items: real estate (including a home purchased for $5 million), cash deposited in banks, and personal property like jet skis, luxury watches and other jewelry (including a five-carat diamond ring), all purchased with victims’ money.
A Kentucky coal mine
While finding and managing assets is often a challenge, Perlman said he’s discovered two properties that require extra work: one is a large loan made to a defaulted coal mine in Kentucky while another is a real estate development in Illinois.
“My job is to preserve and maximize the value of assets we obtain,” the Receiver said. “But how are you going to turn the coal mine – which involves multiple parties – into cash in a reasonable amount of time?”
It’s not clear how long it will take before victims actually receive some compensation for their losses. At some point, Perlman said, the FTC will likely decide when the process of liquidating assets has gone as far as it can.
At that point the FTC, usually in consultation with the Florida attorney general, the District Court and the Receiver’s office, will develop a plan for distributing cash to victims.
Perlman and his team rely on tips from the FTC and the Florida’s attorney general, and can subpoena banks to produce information on all accounts held by the defendants and their affiliated companies.
“We do all the work on our own,” he said, “using our law firm and a forensic accounting firm. Sometimes we hire a PI [private investigator], but we chase down assets ourselves,” just like reporters going out to interview people.
The other members of Perlman’s team are GJB attorneys Gregory M. Garno, Allison R. Day, Theresa Van Vliet and Heather L. Harmon.
“We have a reputation like dogs going after a bone,” said Perlman. “We keep going after it until we get it. Of course, I’d love to hire Erin Brockovich.”