News Release

FOR IMMEDIATE RELEASE
8/18/2022

CONTACT
Raquel Villagra, raquel@neweconomynyc.org
Emma Caterine, emma@newyorkconsumerattorney.com

ECONOMIC JUSTICE GROUP FILES FEDERAL LAWSUIT AGAINST DEBT COLLECTION LAW FIRM NOTORIOUS FOR PREDATORY PRACTICES

Slams Firm for Using Illegal, Deceptive Tactics to Seize New Yorker’s Unemployment Benefits During Pandemic

NEW YORK, NY – New Economy Project and co-counsel at The Law Office of Ahmad Keshavarz filed a federal lawsuit this month, on behalf of Bronx resident Jose Crespo, against Gutman, Mintz, Baker, and Sonnenfeldt (GMBS), a Long Island-based debt collection law firm that has for years engaged in predatory and unlawful practices that harm low-income New Yorkers.

The lawsuit alleges that GMBS engaged in deliberate misrepresentation, falsehoods, deception, and fraud to unlawfully seize Mr. Crespo’s funds, which were in fact protected from debt collection by numerous state and federal laws. According to the lawsuit, GMBS denied Mr. Crespo access to sorely needed funds in his bank account, when he was out of work and homeless and experiencing multiple health issues and financial hardship amid the COVID-19 pandemic.

“Without access to my unemployment benefits, I couldn’t pay my bills. I couldn’t afford a haircut and shave for job interviews, or access to public transportation to get to them,” said Mr. Crespo, the plaintiff in the lawsuit. “The stress gave me chest pains and anxiety. The debt collector made me feel small.”

Under state and federal law, debt collectors are prohibited from taking people’s government benefits to collect on alleged debts. GMBS allegedly violated fair debt collection laws by refusing to lift a “freeze” it had placed on Mr. Crespo’s bank account, denying him access to his legally protected unemployment benefits.

As the lawsuit alleges, GMBS seized Mr. Crespo’s bank account using an all-too-familiar scheme that debt collectors employ to extract funds from low-income New Yorkers. GMBS engaged in illegal “sewer service” when it first sued Mr. Crespo to collect on an alleged debt for rent, failing to provide him with proper notice of the lawsuit. After allegedly serving him court papers at an address where he had never lived, GMBS then filed a false affidavit of service with the court to obtain an automatic judgment. Mr. Crespo only learned about the lawsuit 13 years later when GMBS garnished his wages to collect on the alleged debt. GMBS later froze his bank account, leaving him without access to his legally protected unemployment benefits.

“What GMBS did to Mr. Crespo is but one example of the abusive debt collection rampant in communities of color and low-income communities,” said Susan Shin, New Economy Project’s legal director. “As many people experience extreme and lasting economic hardship through the COVID-19 pandemic, predatory debt collectors continue to exploit people undeterred.”

According to the lawsuit, when Mr. Crespo notified GMBS that his account contained only exempt benefits and should be released, GMBS falsely told him that he had to pay to get his money released. Mr. Crespo then went to court to assert his legal rights and get his bank account released, but GMBS deliberately delayed the process to hold his money.

“GMBS has a history of restraining exempt bank funds and using deceptive conduct to drag out the release of those funds,” said Ahmad Keshavarz, founder of The Law Office of Ahmad Keshavarz. “Mr. Crespo is just one of the New Yorkers who have been harmed by GMBS’s flagrant violations of the law.”

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