by John Darer CLU ChFC MSSC RSP CLTC
The story that a New York personal injury law firm had falsified court orders approving structured settlement transfers in as many as 100 cases - and possibly more, is just incredible. Patrick Hindert cites Industry sources who have identified the responsible law firm as Paris & Chaikin , a NYC personal injury law firm, whose former non-lawyer employee, allegedly created the fraudulent, court-related documents. The primary transfer companies represented by Paris & Chaikin in these transactions were J.G. Wentworth, and its affiliate Peachtree Financial Solutions, as well as Stone Street Capital according to Hindert.
Who is to blame?
Aside from the obvious, and this may seem a bit out of left field, I believe that certain members of the New York's judiciary must be questioned on this and greater judicial education may need to follow.
On September 20, 2010, I published a blog post where i described how then New York Governor David A. Patterson signed into law bills S3681/A6766, which served to amend New York General Obligations Law § 5-1705, a portion of the New York Structured Settlement Protection Act Complete text of NY GOL 5-1705. The amendment was effective January 1, 2011 and included the following:
- Approval of transfer shall be by a special proceeding brought on by an Order to Show Cause
- At this hearing, the payee shall attend before the Court unless attendance is excused for good cause.
I understand that petitions in some of the matters in which transfer orders were falsified were actually filed with Courts in New York state. For those where petitions were filed, why weren't there any hearings noticed or scheduled, or any follow up that would have triggered an investigation that would have stopped this "phoney baloney" stuff?
Not enforcing the law and not having in person hearing is a recipe for helpless victims to get royally screwed, in my opinion. Residents of New York State need the confidence that the judge is going to uphold the law. The law says "shall" NOT "may. Yet, several years after the law became effective, multiple sources have indicated that some judges are still taking decisions on the papers. And so, I ask the the New York judiciary, how can this be?
Legislatures in all 50 states need to an even better job of protecting those with structured settlements by mandating in-person hearings with sellers of structured settlement payment rights and then making sure that the laws are enforced. I have unfortunately become aware of situations where a person was approved "on the papers" where there is NO WAY that a judge would approve the transaction as being in the would-be seller's best interest and that of the seller's dependents. The structured settlement secondary market has shown a remarkable ability to find "the path of least resistance". To wit "Sumter County Florida".
Hindert indicated ongoing investigations of the fraudulent New York structured settlement transfers are being conducted by the New York State Courts and the New York County District Attorney's Office.