The Alabama Attorney General’s Office and the Alabama Securities Commission announced the permanent shutdown last month of what has been described as one of the largest debt settlement schemes in the nation. Autauga County Circuit Judge Ben Fuller granted the state’s request for a permanent injunction to stop what were described as deceptive and illegal activities by a lawyer and his companies, Allegro Law LLC and Allegro Financial Services LLC. The Court’s summary judgment ruling established a permanent receiver and made provisions for the receiver to protect and recover remaining resources for the benefit of the Defendants’ clients.
Attorney General Troy King and Joe Borg, Director of the Alabama Securities Commission, filed a lawsuit seven months ago which halted operations and froze the Defendants’ assets while the Court reviewed allegations regarding “Allegro’s unlicensed business, its ineffectiveness in reducing the debts of its clients, and its false representation of the services provided.” The Court’s ruling permanently prohibits the Defendants from “engaging in any further deceptive trade practices and from operating a debt settlement or debt management business in Alabama.” Commenting on the Court’s ruling, Attorney General King had this to say:
Now the Court has put an end to Allegro Law’s illegal operation, and has stopped it from continuing to exploit the clients it purported to serve. People who were in desperate circumstances came to Allegro for help, and instead they suffered greater harm. With this ruling, Allegro will not be allowed to cause further damage, and steps are being taken to restore as much money as possible to the victims whose trust was betrayed. My office will not permit any person or business to operate massive scams within our state.
Joe Borg, who has been a real friend of Alabama consumers over the years, has been recognized nationally for his good work. Joe had this to say about the conclusion of this case:
This action continues our determination to enforce compliance with the law in the debt management industry. With the continuing financial crisis affecting Alabama citizens, those who have credit issues must carefully investigate and understand the debt management solutions being offered. Before any Alabamian enters into a contract with a debt resolution company, check their license with the Alabama Securities Commission’s Registration Office (800-222-1253) to make sure they are licensed as required under Alabama law and be certain you fully understand what the terms of the contract are.
In his order, Judge Fuller, an experienced and highly-respected jurist, agreed with the State’s claims that the Defendants violated the Deceptive Trade Practices Act and the Sale of Checks Act. Approximately $12 million in assets will be held for approximately 15,000 Allegro customers nationwide, of which about 175 are Alabama residents. These assets have been in the care of Louis Colley, the court-appointed receiver, who will permanently oversee the protection of the funds to insure that the funds are handled appropriately and in the clients’ best interest. The distribution and scheduling of any potential refunds will be determined at a later date. Clients will be contacted by the receiver. Interested persons may also contact him by mail at Allegro Law Receivership, P. O. Box 680840, Prattville, Alabama 36068, by telephone toll free at 1-888-361-3303, or on the web at www.Allegrolawreceivership.com.
Under the Sale of Checks Act, any person engaging in a debt payment services business must obtain a license from the Commission prior to conducting business in Alabama. The Defendants operated in violation of the law by failing to obtain a license as required by the Sale of Checks Act before engaging in the debt payment services business nationwide from their Alabama office. The Alabama Deceptive Trade Practices Act is designed to protect consumers by prohibiting business from committing a variety of deceptive practices including engaging in any “unconscionable, false, misleading, or deceptive act or practice in the conduct of trade or commerce.” Defendants were found to have violated the Deceptive Trade Practices Act by engaging in various deceptive business practices, including making false, misleading, and deceptive representations to consumers.
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