$102 Million Judgment Obtained in Massive Consumer Fraud Case
Hamm V. Americorp, Inc., Et Al. | United States Bankruptcy Court for the Middle District of Alabama | CASE . 2:11-AP-3007
A $102,949,220 judgment against Timothy McCallan, Americorp, Inc., and Seton Corp. was entered by the United States Bankruptcy Court for the Middle District of Alabama after a trial taking place in November 2013. This judgment was issued in light of the Defendant’s role in a massive consumer fraud case. Due to discovery abuse that had taken place throughout litigation, the Court also sanctioned the three defendants an additional $999,457.
Victims of this scheme signed up for debt settlement services offered by Allegro Law, LLC – a Montgomery law firm that turned out to be a scam operated by the Defendants. The Defendants promised that one of their attorneys would settle the victim’s debts for a small portion of what they actually owed by negotiating with their debtors. Victims were asked to stop paying their creditors and pay Americorp and Seton instead. Then, the Defendants siphoned off the money paid. Essentially, the victims defaulted on their debts and had nothing to prove that they paid money to the Defendants. This drastically impacted the victims’ financial situations.
Years of Litigation
The Court’s 55 page ruling reflected years of arduous litigation. Cunningham Bounds, LLC slowly unraveled the fraudulent scheme that the Defendants went to great lengths to hide. One of the ways they tried to hide their scheme was essentially obliterating an electronic database that had important information concerning the money stolen from victims. The Court noted that the data provided by the Defendants was the electronic equivalent of a shredded and mixed up paper telephone directory. The defendants produced uselessly formatted information.
Lucy Tufts, a co-lead counsel on the case remarked that the judgment the court made finally brought the extent of what happened to the victims of the Defendants to light. She also noted the merciless attack of the Defendants on the victims and their families. She also commented that the Court’s judgment reflects the extent of the fraud perpetrated in this case and validates the dogged pursuit by Cunningham Bounds, LLC.
Lucy Tufts was accompanied by Steve Olen as co-lead counsel for the Plaintiff.