The suit alleges that a group of New Jersey lawyers are filing bogus lawsuits against collections agencies.
TRENTON -- It's shaping up to be a battle royale between members of some of the least popular professions in New Jersey.
The lawsuit was filed in December. (File photo)A Bergen County collections agency has filed a class action lawsuit against five lawyers who it claims are running a racketeering scheme targeting collections agencies. The lawsuit, filed in December in the U.S. District Court in Trenton, claims that the attorneys file bogus class action suits against the collections companies, knowing that the companies will be forced to settle the claims quickly for less than it would cost them to go through the judiciary process.
According to the complaint, the title plaintiff, Jeffrey A. Winters of Hackensack-based Collection Solutions, Inc., was a victim of the alleged scheme, having settled a baseless case in September 2016 for $12,000, far less than it would have cost the company to fight and win a lawsuit.
The suit claims that the attorneys - Joseph K. Jones and Benjamin J. Wolf, of the Fairfield-based firm Jones, Wolf, & Kapasi, LLC, Laura Mann of Law Office of Laura Mann, LLC in Riverdale, and Ari H. Marcus and Yitzchak Zelman of Ocean Township's Marcus & Zelman, LLC - have been running a "Mafia style racketeering enterprise" since 2013.
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According to the company's attorney, David Hoffman, the group has filed more than 50 federal class action lawsuits over the past two years. On average, he said, they settle them for just attorneys' fees, at an average of about $50,000 per case. Hoffman said he anticipates having as many as 500 plaintiffs sign onto the class action suit, and will seek about $50,000 in damages for each one.
The suit also alleges that the lawyers use a rotating cast of "professional plaintiffs" to file the suits, which it says target creditors, and any other agencies that send out collections notices.
Those suits, Hoffman says, violate the state and federal Racketeer Influenced and Corrupt Organizations Acts, or RICO Acts.
In a statement to NJ Advance Media, Meredith Kaplan Stoma, the attorney representing Marcus and Zelman, called the accusations in the suit "completely frivolous."
"Advocates who use the Fair Debt Collection Act to protect consumers from overzealous debt-collectors are doing a public service and acting within the law. It's the height of hypocrisy for debt-collectors to claim they are the ones being harassed," she said.
Robert Modica, who represents Jones and Wolf, also called the suit "frivolous." Stoma said the attorneys are asking the court to dismiss the suit and sanction the plaintiffs.
The attorney representing Mann did not return a request for comment Wednesday.
The dispute between the two groups, Hoffman said in a phone interview, is what he called an abuse of the legal system that he believes is happening all over the country.
"In this case, the numbers are just astounding," Hoffman said. Though the individual settlement amounts are relatively small, he argues, they are masking "a large-scale scam."
Jessica Mazzola may be reached at jmazzola@njadvancemedia.com. Follow her on Twitter @JessMazzola. Find NJ.com on Facebook.