When Alvin Carr purchased a $276,000 home in Apopka six years ago, the retired civil servant thought he would live there a long time.
"This is what my wife always dreamed of," said Carr. "It was happiness."
But the couple soon fell behind on their mortgage payments, prompting their mortgage lender, Wells Fargo, to begin foreclosure proceedings.
The Carrs eventually sought help from The Hoffman Law Group, a North Palm Beach firm that specializes in "holding mortgage companies accountable," according to the firm’s website.
"The understanding we had was that they were going to file all the necessary papers through the courts to prolong the foreclosure until we could get things right," said Kathy Carr. "They were going to save the home. They were going to stop the foreclosure."
Every month for six months, Hoffman Law Group deducted $1200 from the Carr's checking account.
On May 5, the law firm took out another $600.
That very same day, Wells Fargo sold the Carr's home at auction to an investor.
"I was shocked. And when I called the attorney, they acted like they weren't aware of it," said Alvin Carr, who claims he had no idea the foreclosure had been finalized until the new owner of the house knocked on his front door. Within weeks, the couple was forced to move into a small motel room.
No attorneys from the Hoffman Law Group intervened in the Carr's foreclosure case, according to Orange County circuit court records. That's likely because the law firm’s retainer agreement does not promise to get involved with the foreclosure process.
Instead, the Hoffman Law Group files separate lawsuits against mortgage lenders in federal court. According to the company's website, "Our firm will demand a new mortgage loan to reflect positive equity, a lower fixed interest rate, a cash settlement for punitive damages, a reinstatement of credit rating, and a waiver of all delinquent payments/penalties/interest and other economic benefits for all plaintiffs."
"I believed it. And I communicated that to the clients. And they believed it. It sounded legitimate," said Michele Stephens, a lawyer who moved from Kentucky to Florida in 2013 to take a job at the Hoffman Law Group as a case management attorney. Stephens said she quit less than a year later, believing the law firm was scamming clients.
"My heart bleeds for them," said Stephens, who began to cry as she described clients on the verge of losing their homes while giving what little money they had to Hoffman Law Group. "I prayed for clients every night when I came home."
According to Stephens, salespeople who work in a "boiler room" call center located in the law firm's North Palm Beach office building sign up clients and collect money; typically a $6000 retainer fee followed by a $495 monthly charge.
"I know at one point there were 1,500 active clients," said Stephens.
Some of those clients' names would eventually end up on federal lawsuits alongside the names of numerous other plaintiffs on what are known as "mass joinder" lawsuits. That type of lawsuit is different from a class action case because all plaintiffs must pay legal fees in advance.
The Federal Trade Commission cautions homeowners against taking part in mass joinder lawsuits for mortgage issues. The consumer protection agency warns that clients are often left in even worse financial shape.
"It's a scam. It's a money scam," said Stephens. "I don't know how people can sleep at night knowing that you're scamming them. And these people and their little kids are going to be out on the streets."
Federal judges have expressed concerns about some of the 32 lawsuits filed by the Hoffman Law Group. At least one lawsuit has already been thrown out due to improper legal tactics. In several other cases, the law firm has been ordered to remove all but one plaintiff from the group lawsuit.
Sonja Shearer was among more than 100 plaintiffs listed on a lawsuit filed in a New York federal court suing 13 mortgage lenders. In March, after the case had been open for nearly a year, an attorney working on behalf of the Hoffman Law Group voluntarily withdrew the Jacksonville woman from that lawsuit without explanation. A new lawsuit was filed in June in a Florida federal court with Shearer listed as the only plaintiff.
Two days later, U.S. District Judge Marcia Morales Howard threatened to throw out Shearer's new lawsuit. The judge criticized the way the lawsuit was written, calling it "an impermissible 'shotgun pleading'" which contained "irrelevant factual allegations and legal conclusions." Such pleadings are "totally unacceptable", according to Howard's order.
Shearer said she had no idea her lawsuit was in jeopardy until Local 6 notified her of the judge's ruling.
"They were blowing smoke up my butt!" said Shearer, who claims she continues to pay Hoffman Law $495 a month, despite losing her home to foreclosure last year. Shearer said she has paid the firm more than $11,000 under the belief she might eventually recoup money from her former mortgage lender.
After Local 6 provided Shearer with a copy of the judge's order, she said she contacted her case management attorney at Hoffman Law Group. According to Shearer, the attorney claimed to have no knowledge that the lawsuit was in trouble and asked Shearer to fax him the judge's order she received from Local 6. Days later, the law firm filed an amended complaint with the court. The case remains open, despite Shearer telling Local 6 she no longer wished to be represented by the Hoffman Law Group.
"If this would have been properly handled to begin with, I would still be in my house," said Shearer.
Records show one of Hoffman Law’s clients was successful in saving their home. Four months after Nicholas D’Angelis was added to a mass joinder lawsuit, the New York man was dropped from the case because the bank gave him a permanent loan modification. However, D’Angelis’s wife tells Local 6 the Hoffman Law Group had little to do with their victory.
“They got me in touch with the right people, but I had to do all the paperwork myself,” said Ruth D’Angelis, who believes she could have arranged the mortgage modification without paying around $10,000 for an attorney. “I probably wouldn’t use them again.”
The Hoffman Law Group is managed by attorney Marc Hoffman, who has been practicing law in Florida since 1974. Records show he opened the West Palm Beach firm in 2012, originally under the name The Residential Litigation Group.
On Tuesday, the Florida Bar filed a formal complaint against Hoffman with the Florida Supreme Court seeking unspecified discipline. The complaint involves the law firm’s advertisements, which the Bar calls “false and misleading”.
In 2012, the state of Idaho ordered Hoffman’s law firm to stop mailing advertisements there. The complaint was initiated by an Idaho bank that was the target of a potential lawsuit by Hoffman’s firm. The Florida Bar received a similar complaint from the state of New Mexico, where a homeowner claims Hoffman never added her name to a lawsuit and misled her about providing foreclosure defense.
Prior to the Florida Bar filing its complaint against Hoffman with the state Supreme Court, the attorney admitted to violating several of the Bar’s advertising rules, which he considered “minor violations”. Hoffman’s plea, which he hoped would lead to minor sanctions, was later rejected by a Bar grievance committee.
The Florida Bar is also investigating a separate complaint against Hoffman Law Group involving classified ads placed on the website Craigslist seeking salespeople to work for the firm.
Hoffman has not returned numerous phone calls and emails left at his West Palm Beach office. Local 6 investigative reporter Mike DeForest later tried to speak with Hoffman as he left his office, but the attorney claimed he did not have time to talk and requested DeForest’s business card. Hoffman never called. However, before driving away Hoffman told DeForest allegations of his law firm taking money without filing court papers on the behalf of clients was “rubbish.”
“Mr. Hoffman was just a name on a door,” said Stephens. The former employee claims the law firm is actually run by Michael Harper, who is not licensed to practice law in Florida. State records show Harper manages a marketing company located in the same West Palm Beach office building as the law firm.
The Florida Attorney General’s office has received 12 complaints about the Hoffman Law Group, including one filed by Stephens. She said a state investigator has already taken her deposition about the inner workings of the law firm. Stephens has also filed complaints with attorney general offices in 39 other states.
Due to her previous work with the Hoffman Law Group, Stephens said she has received a Bar complaint filed in New Mexico, accusing her of practicing law without being licensed in that state. An attorney representing Hoffman has accused Stephens of stealing clients from the law firm when she quit, an allegation Stephens denies.
Days after Alvin Carr contacted the Florida Attorney General’s office to complain about Hoffman, the law firm mailed him a check for $3000. Carr, who has since moved into a rental home in Apopka, claims he still wasted nearly $5000 in the hopes that Hoffman Law Group would be able to help him. Besides losing his home to foreclosure, Carr’s name was never added to one of Hoffman’s mass joinder lawsuits during the six months he was paying the firm.
“I hope this law firm will be destroyed and this won't happen to anyone else,” said Carr.