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