READ MARYLAND’S lawsuit against companies that profited from purchasing structured settlements from lead-paint-poisoning victims, and you will understand why Attorney General Brian E. Frosh (D) said the circumstances made “my blood boil.” The most vulnerable people — young, economically disadvantaged, financially unsophisticated and cognitively impaired — were aggressively targeted and swindled of money that was supposed to sustain them in future years, the lawsuit alleges. Good that Mr. Frosh is angry and even better that he is seeking restitution for people twice victimized.
Mr. Frosh’s office on Tuesday filed a civil suit against a Chevy Chase company and other affiliated firms, charging they violated the Maryland Consumer Protection Act through fraud and other deceptive practices. The complaint alleges Access Funding singled out young, intellectually impaired Marylanders, including numerous groups of siblings who were exposed to lead paint as children in their Baltimore homes, and persuaded them to sell the settlements they received as the result of personal injury lawsuits for a pittance of their value. The settlements were, in turn, resold at a profit. Access Funding has not responded to media requests, including ours, for comment.
The lawsuit comes after an eight-month investigation launched by Mr. Frosh in the wake of an investigation by The Post’s Terrence McCoy that put a spotlight on the exploitative structured-settlement-purchasing industry. Among the attorney general’s findings: Between March 2013 and Aug. 15, Access Funding acquired a gross total of $32.6 million in future payments for $7.5 million, even though the cumulative present-day value was $24.5 million. Even more galling are allegations about how the industry operated: arranging sham “independent advice” to counsel victims about the wisdom of the transactions and then misleading the courts. The suit cites an instance in which an adviser who was supposed to provide guidance about the legal, tax and financial implications of a complex transaction spent at most three minutes on the phone.
Most wrenching are stories of those preyed upon: people such as the twin brothers who in 2003 received a lead-poisoning judgment when they were 8 that would have provided structured payments of $1,900 per month for a 40-year period to begin in 2016 when they turned 21. In 2013, the lawsuit alleges, around the time of their 18th birthday, a salesman from Access Funding began to ingratiate himself, giving them “gifts,” calling and visiting. The cognitively impaired brothers were induced in six separate transactions to transfer all 40 years’ worth of future monthly payments (a gross total of $1.8 million) for immediate cash payments of $302,256. That is $1 million less than the discounted present value of the payments. We hope the suit, which seeks restitution for them and others harmed, succeeds in making these people whole again.