Guardaley | X-Art

Feds accuse X-Art/Malibu Media’s attorney Jason Aaron Kotzker of a $7,000,000 payday loan fraud

Colorado attorney Jason Aaron Kotzker filed about 450 shakedown lawsuits on behalf of a “barely legal” pornography purveyor X-Art/Malibu Media in New York and Colorado. In October 2014 he abruptly stopped working for the Miami Troll Central (Michael Keith Lipscomb and his firm — the people who, together with the German Mafia, steer thousands of similar extortion actions across the US). No new Malibu lawsuits were filed since then in Colorado (and Lipscomb currently employs another local attorney in New York). All but two Colorado lawsuits, COD 2013-cv-02385 and 2013-cv-03358 (I wrote about the latter case recently), are currently closed.

Apparently, in addition to scamming alleged file-sharers out of money, Kotzker ran another con, mugging the most needy — desperate people who lived from paycheck to paycheck and used payday loan services as a last resort to make ends meet.

According to the complaint filed on 8/7/2015 by the Federal Trade Commission (NVD 15-cv-01512), two entities that were largely controlled by Kotzker — Sequoia One LLC and Gen X Marketing Group LLC — had been knowingly selling consumer data to criminals:

From at least 2011 to at least 2013, Defendants operated as data brokers, collecting and selling sensitive consumer information from consumer payday loan applications to non-lenders.

In particular, Defendants sold this information to at least one non-lender, Ideal Financial Solutions, Inc. and its subsidiaries (collectively, “Ideal Financial”), knowing or having reason to know that Ideal Financial used the information to make unauthorized debits from the consumers’ bank accounts.

Washington Post wrote a story about this news on 8/12/2015:

The FTC said Sequoia One and Gen X Marketing Group, which both primarily operated out of Florida, supplied Ideal Financial with account information from at least 500,000 people who applied for payday loans, leading to more than $7 million being taken from those consumers’ bank accounts without their consent.

In addition to Kotzker, three other individuals were accused, but they have recently conditionally settled, apparently throwing their former brother-in-scams under the bus. While someone should repay those seven million dollars, The Washington Post doubts that those who were robbed will ever get their money back:

The Bartholomews agreed to settle with the FTC for $7.1 million but that will be suspended after they pay $15,000. McDonnell agreed to a $3.7 million settlement, but that is suspended because of his inability to pay. Although both judgments could be due immediately if the defendants misrepresented their financial status, it seems unlikely that consumers will be getting their money back through this case.

This is certainly a disbarment grade offence, and Mr. Kotzker deserves to lose his license, to be financially ruined and even criminally prosecuted (I wonder why this is a civil case to begin with). The only thing that doesn’t let my glee reign is the fact that Kozker has three kids, who are too young and innocent to realize how badly their father failed them.

FTC Press release


(All the new developments in the case are listed in the followup)

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19 responses to ‘Feds accuse X-Art/Malibu Media’s attorney Jason Aaron Kotzker of a $7,000,000 payday loan fraud

  1. It is moments like this when I sit back and wait for the apologies from those who claimed I was the bad man.
    I pick-on lawyers who deserve it, not unsuspecting innocents.

    Copyright shakedowns
    Tax evasion
    Pursing those they KNOW to be innocent
    Lying to targets
    Threatening peoples reputations
    ADA shakedowns
    Violating the law they are supposed to uphold

    I enjoy working from the deficit of trust in me I create, but they really are making this far to easy.

    Shame the wheels of justice like to work so slowly & are far to forgiving to its own cogs. Never seem to offer those breaks to these scums targets.

    Pity that the victims will not be made whole, a common refrain when lawyers abuse the law.

  2. Words almost fail me. I do not know if Lipscomb got wind of this and jettisoned Kotzker or if Kotzker having found a better scam jettisoned Lipscomb. Nevertheless it is clear that the “fuck them” amorality inherent in the Malibu Media shakedown enterprise is a slippery slope indeed.

  3. Having no idea how the interplay between the FTC and DOJ works I do know how it works with the SEC and DOJ. It is not unusual for the SEC to file a civil complaint before the DOJ files a criminal complaint. That everyone else has cut a deal except for Kotzker is not promising for him as he may be the main target.

  4. Just about everything the FTC does is civil rather than criminal.

    Presumably because the bar is far lower and a federal civil decision is more than sufficient for other aggrieved parties to take subsequent action.

    There’s nothing stopping state AGs or bar associations from taking the civil decision and using it as the basis of further action.

  5. Malibu Media relying on the help of scammers and fraudsters to facilitate their scheme? I’m shocked, I tell you. Shocked!

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