An attorney from Green Bay could have her license suspended for 18 months for allegedly participating in a national debt refinancing scheme.
Tiffany Luther graduated from Marquette University Law School in 2000. Her license is in good standing and she has no history of professional discipline, according to the State Bar and Office of Lawyer Regulation websites. She resides in Nevada, according to the OLR, but the State Bar and OLR websites list an office address in Green Bay.
An OLR complaint filed June 30 alleges that Luther helped Costa Mesa, Calif.-based Morgan Drexen, a national debt settlement company operating under the guise of a legal services provider, operate its illegal debt relief scheme in Wisconsin.
The company shut down June 21 during bankruptcy proceedings after the federal government won a lawsuit against it in May.
Morgan Drexen offered a program that instructs debtors to stop paying their creditors and instead put their money in an account from which Morgan Drexen paid itself. Once the amount in the account reached a certain level, Morgan Drexen approached creditors with a settlement. According to court records, Morgan Drexen made more than $4.2 million in fees while paying less than $4 million in settlements to creditors.
The OLR alleges Luther, who joined Morgan Drexen in 2007, was the only attorney who provided services to Wisconsin residents enrolled in that program. Luther, according to the OLR, let Morgan Drexen use her law license so that it could do business in Wisconsin.
The OLR also noted in its complaint that Luther has represented at least 226 Indiana residents although she is not licensed to practice law in that state.
In October 2011, the state Department of Financial Institutions’ Division of Banking filed a complaint against Morgan Drexen, alleging it was conducting business in the state without a license and violating various administrative rules, including charging excessive fees and deceiving clients.
In April 2013, an administrative court judge ordered Morgan Drexen to pay back the more than $4.2 million in fees the company had charged more than 1,000 Wisconsin residents. The judge also ordered Morgan Drexen to pay nearly $2 million in forfeitures for 1,890 violations of adjustment services laws.
The order was affirmed in both circuit court and a Court of Appeals. Morgan Drexen appealed to the state Supreme Court on May 1.
The remaining 12 counts of misconduct alleged by the OLR involve two clients Luther enrolled in Morgan Drexen’s debt refinancing program. One client sought to refinance $22,000 in debt while the other had $14,000 in debts. In both cases, the OLR alleges, among other things, that Luther charged excessive and unreasonable fees, failed to keep clients informed and did not explain matters to clients so that they could make informed decisions.
Luther could not immediately be reached Wednesday.
In addition to asking the Wisconsin Supreme Court to suspend Luther’s license for 18 months, the OLR is asking that the court order her to pay $865 in restitution to a client. Follow @erikastrebel