The attached document is the Complaint in the class action lawsuit filed in the United States District Court for the District of Minnesota. From the document:

Plaintiff Reece Harrison, on behalf of himself and all other similarly situated Minnesota residents, by and through his undersigned counsel, files this Class Action Complaint and Jury Demand and avers as follows:


1.     Plaintiff brings this action to obtain monetary relief for himself and similarly situated others against Defendants who, through a coordinated scheme, misrepresented their debt resolution services, qualifications, and abilities to financially vulnerable Minnesota consumers who were struggling to pay their bills.

2.     Defendants engaged in a self-described “joint venture” to circumvent Minnesota’s Debt Settlement Services law, codified as Minn. Stat. § 332B, which requires debt settlement services provides to register with the State, make specific disclosures to prospective customers regarding the high-risk nature of debt settlement services, and limits the amount of fees a service provider can charge.

3.     Defendants used Defendant Legal Helpers Debt Resolution, LLC, d/b/a The law firm of Macey, Aleman, Hyslip, & Stearn’s status as a law firm to avoid registering with the State, to avoid providing disclosures to clients, and to charge fees in excess of the statutory maximum amount because law firms are not subject to Minnesota’s Debt Settlement Services law.

4.     The joint venture marketed itself to consumers as a law firm named Legal Helpers Debt Resolution, LLC (“LHDR”). LDHR promised to perform legal services, but in reality, it actually referred all of its legal work to Defendant CDS Client Services (“CDS”). LHDR charged consumers several thousand dollars to open the file plus the statutory maximum fee for CDS’s services, which LHDR billed as a case cost.

5.     The result of the scheme is that Plaintiff, like all Minnesota consumers, paid LHDR fees several thousand dollars in excess of the statutorily mandated maximum and did not receive any of the disclosures that the law requires debt settlement services to provide.

*               *               *



1.     Upon information and belief, at all times pertinent to this Complaint Defendant Legal Helpers Debt Resolution, LLC, (“LDHR”) is a Nevada limited liability corporation with its principal place of business at 233 South Wacker Drive, Suite 5150, Chicago, IL 60606 was engaged in commerce within the State of Minnesota and, more specifically, in Olmsted County, Minnesota.

2.     Upon information and belief, at all times pertinent to this Complaint Defendant Macey Aleman Hysplis & Searns (“for purposes of this complaint also referred to as “LDHR”) a law firm located at 233 S. Wacker Dr. Suite 5150, Chicago, IL, 60606, was engaged in commerce within the State of Minnesota and, more specifically, in Olmsted County, Minnesota

3.     Upon information and belief, at all times pertinent to this Complaint Defendant CDS Client Services, Inc. also known as CDS Debt Resolution or Capital Debt Settlement (“CDS”) is a California corporation.  CDS engages in the business of debt adjusting for profit.  CDS does business throughout the United States, including that State of Minnesota, and has its principal place office at 2152 Dupont Drive, Suite 101, Irvine, California, 92612.

4.     Defendant James Agosto is a Minnesota resident and the managing partner of Defendant LHDR’s Minnesota office.


Debt Settlement Services

5.     Given the economic issues that many Americans have faced in the past few years, the debt settlement industry has boomed.

6.     Historically, the high fees charged upfront generated many consumer complaints over the past several years. Consumers complained that they pay exorbitant of amount of fees and do not receive any results. Many consumers get sued by the creditors, have funds garnished, their account balances rise, are unable to settle their accounts, and are forced to file bankruptcy. Consumers may pay thousands of dollars without any refund or any results.

7.     The predatory nature of the fees is such that program fees consume the monthly payments for the first several months of a consumer’s participation in the program.

8.     Often, debt settlement companies target people with high debts who are in desperate need of financial advice and assistance.

9.     In response to unfair and deceptive debt settlement practices, the State of Minnesota, like many other states, enacted statutes or regulations protecting consumers. In 2009, the Minnesota legislature passed Minn. Stat. § 332B. Chapter 332B imposes requirements and regulations on debt settlement service providers.

10.  The Statute requires all entities offering debt settlement services to make the following written “verbatim notice” using the prescribed font size and formatting (used below):



We CANNOT GUARANTEE that you will successfully reduce or eliminate your debt.

If you stop paying your creditors, there is a strong likelihood some or all of the following may happen:



• YOU MAY STILL BE SUED BY CREDITORS for the money you owe.


Even if we do settle your debt, YOU MAY STILL HAVE TO PAY TAXES on the amount forgiven.

         Your credit rating may be adversely affected.

11.  Additionally the 2009 law requires debt settlement providers to be licensed by the State of Minnesota.

12.  Further, in order to protect Minnesota consumers, the statute regulates the amount of fees that can be charged, when those fees can be earned, and imposes many requirements and regulations that the debt settlement provider must follow.

Defendants’ Conspiracy

13.  In response to the changes in laws, Defendants conspired to find a loophole in the laws so that Defendants may continue to charge high upfront fees without providing the necessary disclosures to consumers.

14.  Defendant LHDR, also doing business as the law firm of Macey, Aleman, Hyslip, & Stearn, offered to use its status as law firm to provide a ‘front’ for the Debt settlement providers.

15.  Defendant LDHR entered into agreement with Defendant CDS to provide debt settlement services under the LHDR name.

16.  None of the defendants are licensed to offer debt settlement services in Minnesota.

17.  Defendant CDS attempted to evade these consumer protection laws, especially the limitations on fees, by associating with and using the LDHR law firm as a “front.”

18.  Although Defendants create a false illusion that LDHR is performing the legal services, all of the debt settlement services are provided by Defendant CDS.

19.  Upon information and belief, attorneys at LHDR do not control the method, manner, or means by which Defendants perform the debt settlement services for Plaintiff or otherwise directly supervise or control these activities.

Plaintiff’s Dealings with Defendants

20.  On or about June 2010, Plaintiff responded to an Internet advertisement placed by Defendants.

21.  Defendants contacted Plaintiff Reece Harrison in an effort to solicit his business and to provide debt settlement and credit repair services.

22.  Defendants prominently advertised that their attorneys review the consumer’s current financial situation and tailor a debt resolution plan that is unique to their situation. Throughout the entire sales pitch, Plaintiff believed he was communicating with a law firm. All correspondence throughout the entire sales process appears to be coming from the law firm LHDR, however, most fax numbers, telephone numbers, addresses, and communications were from Defendant CDS.

23.  Defendants told Plaintiff that the Minnesota Attorney, James Agosto would receive Plaintiff’s file and work on his case.  Upon information and belief, James Agosto never received, reviewed, or worked on Plaintiff’s case.

24.  In fact, upon information and belief, no attorney reviewed Plaintiff’s financial situation, tailored a debt resolution plan, or supervised his case.

25.  LHDR advertises that their services are different because they are attorneys and regulated by the ABA.  LDHR advertised, “Like a security blanket, we will take control of your debt resolution issues.  We will contact your unsecured creditors to advise them they should only communicate with our firm as your attorney … we are prepared to fully represent you to protect your rights under the law.”   See Exhibit 1, Defendants’ Advertisement.

26.  Plaintiff ultimately chose to contract with Defendant LDHR because they were a law firm and decided to sign the firm’s “Attorney Retainer Agreement” on June 22, 2010 based and relying upon the representation that a law firm would be handling his case. See Exhibit 2, Attorney Retainer Agreement.

27.  The services set out in the “Attorney Retainer Agreement” are recited for the purpose of creating an illusion that the debt settlement services constitute the practice of law or are being performed incidental to the practice of law.

28.  Defendants made various misrepresentations or failed to disclosed information in an effort to induce Plaintiff to enter into the illegal agreement, including but not limited to:

a.     Unsubstantiated claims of savings to Plaintiff. Defendants represented to Plaintiff that the program would save them 65% of the total debt; however, Defendants do not have a record of accomplishment that supports this statement.

b.     Failure to adequately inform Plaintiff that he will be subject to continued collection efforts, including lawsuits, and that his account balances will increase due to extended nonpayment under the program. Defendants fail to disclose that such efforts occur to Minnesota consumers on a regular basis.

c.     Defendants deceptively disparaged bankruptcy as a viable alternative for Plaintiff. Upon information and belief, LHDR stands to make significantly more fees for a client enrolled into a debt settlement program.

d.     Defendants represented that the majority of consumers that agree to retain Defendants complete the debt settlement program thereby becoming debt free. Upon information and belief, a high percentage of Minnesota consumers who attempt Defendants’ debt settlement program do not in fact complete the program, and do not become debt free as a result of their services.

e.     Defendants accepted money from Plaintiff for the purpose of settling all of his debts in the program for less than the amount owed knowing there was a substantial likelihood that they could not provide the services as promised.          

f.      In an effort to induce Plaintiff to enter into a contract with Defendants, they implied they would assist him with a lawsuit in the event that he was sued by one of his creditors with which Defendants have agreed to negotiate by requesting all correspondence received from his creditors and indicating they would take care of everything. Defendants indicated as much while specifically disclaiming and such legal assistance in its ‘attorney retainer agreement’ with Plaintiff.

29.  After signing up for the debt settlement plan, Plaintiff was advised to stop making payments to his creditors. Plaintiff incurred significant interest and fees during this time and he began receiving calls from creditors and debt collectors. Defendants advised Plaintiff to state that he is being represented by an attorney and keep a phone log. However, Plaintiff’s debt collectors and creditors stated that they do not deal with debt settlement companies and that phone calls would continue.

30.  Plaintiff became very worried when one of his creditors filed a lawsuit against him. Again, Plaintiff contacted Defendants to get legal advice on how to handle the situation. Defendants advised Plaintiff to write that he is not familiar with the debt and not responsible for the debt or something to that effect. Plaintiff told Defendants that he cannot lie to the court and that he is familiar and responsible for the debt. Defendants advised Plaintiff that they could not help him.

31.  Plaintiff thought and was led to believe that the creditors had agreed to the debt settlement plan. Upon information and belief, Defendants never contacted any of Plaintiff’s creditors and no creditors agreed to Plaintiff’s debt settlement plan.

32.  Plaintiff had virtually no contact with any attorney throughout the entire process, but believed he was contracting with a law firm. Defendants’ debt settlement system was intentionally designed to mislead Plaintiff into believing that attorneys would be performing their services on his behalf.

33.  Plaintiff would have never contracted with LHDR or allowed LHDR to perform debt settlement services had he knew the true nature of their scheme. At all relevant times, Plaintiff was unaware of the relationship between defendants.

34.  In order to further this scheme, non-lawyer employees of CDS were instructed to refer to themselves as being from LHDR. Non-lawyer employees of Defendants routinely gave legal advice and debt settlement advice in the name of LHDR.

35.  Defendant CDS answered its telephone as it if were LHDR, thereby deceiving potential clients and plaintiff in the instant action. Defendants knew or should have known that this conduct would confuse or deceive Plaintiffs.

36.  Defendants knew or should have known that a scheme whereby it allowed non-law firms and non-attorneys to use and market the name of a law firm would confuse and deceive consumers into believing they were dealing with attorneys or at least a law firm.

37.  Defendants advertised using LHDR’s name in order to sell their services.  Defendants knew or should have known that this conduct would confuse or deceive Plaintiffs into believing that LHDR was the entity actually performing the settlement services.

38.  Defendants split the “legal fees” paid by Plaintiff.

39.  For these services, Plaintiff agreed to pay specified fees that, unknown to him at the time, were and are illegal due to their enormous size and accelerated timing of payment, among other things.

40.  The debt settlement plan required Plaintiff to make monthly payments to Defendants of $842.11 during months 1–3 and $619.85 during months 4–48.  Plaintiff would pay a total of $30,419.51 and Defendants would collect at least $10,405.32 of that money as fees.  See Exhibit 2, Payment Schedule.

41.  Almost all of the fees were to be collected up front.  The Defendants would receive  a total of $8,855.33 in fees over the first 17 months of the 48 month plan.

42.  During the first three months Plaintiff paid a total of $2,526.33 to Defendants towards his debt settlement plan. All $2,526.33 went to Defendants’ fees and $0 went towards settling Plaintiff’s debts.

43.  After being sued by one his creditors, Plaintiff’s wages were garnished and he was forced to file bankruptcy.

44.  On March 11, 2011, Plaintiff decided to stop payments to Defendants. Plaintiff had been in the program for 8 months and paid a total of $5,625.36. Only $838.90 was returned to Plaintiff, the remaining $4,786.46 was kept by Defendants as fees. See Exhibit 3, termination letters.