A class-action lawsuit was filed Thursday seeking to tie a payday loan company to a widespread process serving scheme to file false court affidavits.
The 25-page lawsuit, filed by the non-profit Legal Aid Center of Southern Nevada, accuses the Kansas-based Rapid Cash of failing to stop one of its process servers, On Scene Mediations, from carrying out the scheme, now being investigated by Las Vegas police.
“The complaint seeks to redress the fraud perpetrated on the courts and on unsuspecting Nevadans through the use of ‘sewer service,'” said Barbara Buckley, the executive director of the Legal Aid Center. “As a result of this widespread fraud, hundreds, if not thousands, of default judgments were entered against defendants who never had the opportunity to file papers in response to the suit. This conduct takes away the right of our citizens to have their day in court.”
The lawsuit alleges Rapid Cash either knew or should have known that On Scene Mediations was not licensed as a process server in the state and should have had greater oversight of its activities.
Mark Dzarnoski, a Las Vegas lawyer Rapid Cash hired to help it assess fallout from the growing courthouse scandal, declined to comment on the suit until he has a chance to read it.
On Scene Mediations and its owner, former Las Vegas police officer Maurice Carroll, also are named as defendants in the suit. So is Carroll’s former office manager Vilisia Coleman.
Carroll, 41, and Coleman, 46, are charged in separate criminal indictments in the scheme with perjury, filing false court documents and obtaining money under false pretenses.
As first reported by the Review-Journal in July, authorities allege that Carroll and Coleman lied in the notarized affidavits when swearing they had served defendants with copies of court papers on behalf of another former Carroll client, debt collection agency Richland Holdings. The company, which was not named in the class-action suit, obtained default judgments after the defendants failed to respond to the lawsuits.
The four lead plaintiffs in the suit — Casandra Harrison, Eugene Varcados, Concepcion Quintino and Mary Dungan — all allege they did not learn of default judgments Rapid Cash had obtained against them until either their employers or banks garnished the money under court orders. They allege process servers for On Scene Mediations lied in Las Vegas Justice Court affidavits claiming to have served them with copies of the court papers.
Varcados, a 68-year-old craps dealer, said he learned of the default judgment against him when he received notice Aug. 21 from his employer that it was ordered to start deducting 25 percent from his paycheck until he pays off a $2,519 debt to Rapid Cash.
“This is an unforeseen expense,” said Varcados, who cares for his ailing 66-year-old “lifemate. I’m going to be hurting for a while.”
The suit, for the first time, links longtime lawyer, Lizzie Hatcher, in what it alleges was a false affidavit claiming to have served Varcados with a copy of a complaint Rapid Cash had filed against him in March 2009. The suit alleges Hatcher, who filed lawsuits on Rapid Cash’s behalf for several years, notarized that affidavit.
The Review-Journal reported Thursday that police are investigating Hatcher’s ties to Carroll and On Scene Mediations. Hatcher has not responded to requests for comment.
Varcados said that he tried to negotiate a deal with Rapid Cash as he did with his other creditors, but the company refused to do it.
Some relief, however, could be coming for Varcados.
The suit asks for a court order forcing Rapid Cash to set aside default judgments against all of the current and future plaintiffs in the class action.
Las Vegas Justice Court officials plan to review some 20,000 default cases that might have links to On Scene Mediations in an effort to determine whether the rights of the defendants were violated. Rapid Cash obtained the vast majority of those judgments.
The law firm of Kemp, Jones & Coulthard, assisted the Legal Aid Center with the class-action suit.