Maryland Attorney General Brian Frosh has launched an investigation into the practices of companies that buy structured legal settlements from lead poisoning victims — paying them less than the settlements would provide.
Court filings this week in Baltimore and Montgomery County circuit courts show that the attorney general's Consumer Protection Division is looking into whether companies involved in the sale of structured settlements have violated the state Consumer Protection Act.
"Lead paint victims are almost by definition cognitively impaired," Frosh said Thursday. "We're talking about people who are vulnerable. ... The concern of our office is whether people are taking advantage of them in a manner that's improper."
In the practice under review, the victims exchange regular settlement payments over time for immediate one-time payouts that are much smaller.
Frosh said his office has learned that the amount that the victims typically get is about a third of the present value.
"That's like me saying to you, 'Hey, look, you've got a 10-dollar bill, I'll give you three dollars for it,'" Frosh said.
A focus of the investigation is whether people who give "independent professional advice" to victims in connection with the transactions are actually independent, which is required by state law.
According to legal filings, the attorney general's office is seeking information about entities including Access Funding LLC and Seneca One LLC.
Three attorneys — Anuj Sud, Charles E. Smith and Bennett Wills -— are fighting subpoenas served in connection with the investigation, court records show. This week, the attorney general's office is seeking to enforce the subpoenas.
Sud served as counsel to Access Funding and related entities in transactions with injured Marylanders beginning in June 2013, and Smith provided "independent professional advice" to people who entered into transactions with the entities during the same period, according to court filings from attorneys for Frosh's office.
"We have no problem working with the attorney general's office in this case," Donnelly said, but "we are compelled by the rules of professional responsibility to not divulge this information unless there is a court order."
Attempts to reach other officials at Access Funding LLC and Seneca One LLC were unsuccessful.
Additional people have been subpoenaed as part of the investigation, Frosh said.
State lawmakers said this summer that they plan to explore ways to tighten regulations on companies that buy structured settlements.