Preview
BAY AREA LEGAL AID
1 Noah Zinner (Bar No. 247581)
2 Malachi J. Haswell (Bar No. 307729)
Katherine Sass (Bar No. 326185)
3 Adrian Paredes (Bar No. 332353)
1735 Telegraph Ave.
4 Oakland, CA 94612
Telephone: (510)250-5205
5
khaswell@baylegal.org
6
KEMNITZER, BARRON & KRIEG, LLP
7 Kristin Kemnitzer (Bar No. 278946)
Adam J. McNeile (Bar No. 280296)
8 42 Miller Ave., 3rd Floor
Mill Valley, CA 94941
9
Telephone: (415) 632-1900
10 Facsimile: (415) 632-1901
kristin@kbklegal.com
11 adam@kbklegal.com
12 BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP
Daniel E. Birkhaeuser (Bar No. 136646)
Working Together for Justice
13 2125 Oak Grove Road, Suite 125
Walnut Creek, California 94598
Bay Area Legal Aid
14 Telephone: (925) 945-0200
Facsimile: (925) 945-8792
15 dbirkhaeuser@bramsonplutzik.com
16 Attorneys for BAY AREA LEGAL AID
17 SUPERIOR COURT OF CALIFORNIA
18 COUNTY OF ALAMEDA
19
20 BAY AREA LEGAL AID, Case No.
21 Plaintiff, COMPLAINT FOR PERMANENT
22
INJUNCTION
v.
23 California Unfair Competition Law (Cal.
ACHIEVABLE SOLUTIONS, INC.; Bus. & Prof. Code § 17200 et seq.).
A-UNITED ATTORNEY SERVICE, INC.;
24 SUE YA, INC.; Unlimited Civil Case
HARRIS LAW GROUP;
25 TAKASHI CHENG; COMPLEX DETERMINATION REQUESTED
KIONA TCHAN aka KIONA YEUNG;
26 JAMES CRAWFORD; and
HALIL HASIC,
27
Defendants.
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1
Complaint
1 I. INTRODUCTION
2 1. Litigants in civil court are entitled to fundamental safeguards such as fair notice of a case,
3 substantiated allegations, and accurate representations. So when Defendants—a debt collector and
4 related parties—flagrantly circumvent such protections to secure default judgments based on
5 manufactured evidence and outright perjury, the Court has the power and the duty to intervene.
6 Defendants’ conduct not only causes grave harm to low-income, vulnerable consumers, it also
7 forces courts to become unwitting accomplices to Defendants’ fraud and turns due process into a
8 profit mill.
9 2. Defendants have conspired to commit a litany of debt collection abuses against hundreds,
10 if not thousands, of California consumers. Specifically, Defendants file collection suits and then
11 intentionally fail to serve the defendants in those actions with a copy of the summons and
12 complaint. Defendants then file proofs of service that falsely attest that the defendants have been
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13 properly served. When the defendant consumers understandably do not appear in their cases,
Bay Area Legal Aid
14 Defendants seek—and in nearly every case obtain—default judgments based on both the false
15 proofs of service and on false or misleading declarations and unauthenticated documents.
16 3. Because the documentation for any individual debt collection action is, on its own, facially
17 plausible, and because these documents are supported by false statements made under penalty of
18 perjury, Defendants’ unlawful conduct has escaped judicial and public scrutiny.
19 4. Plaintiff Bay Area Legal Aid (“BayLegal”), as the largest provider of free legal services in
20 the Bay Area, has suffered and will continue to suffer harm because of Defendants’ unlawful
21 conduct. BayLegal has been forced to divert its limited resources to identify and combat
22 Defendants’ illegal practices in order to fulfill its mission of helping consumers understand and
23 respond to debt collection actions. BayLegal’s mission is also impaired by Defendants’ scheme
24 because consumers never receive notice of the lawsuits against them and therefore do not know to
25 seek out BayLegal’s assistance.
26 5. BayLegal now seeks judicial intervention to stop Defendants’ illegal practices and to
27 enjoin Defendants from enforcing the fraudulently obtained default judgments.
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Complaint
1 II. JURISDICTION
2 6. Because BayLegal seeks permanent injunctive relief, this case is properly classified as an
3 unlimited civil action. Cal. Code Civ. Proc. § 86(a)(8), 88.
4 7. The court has original subject matter jurisdiction under Cal. Const. Art. VI § 10 and Cal.
5 Code Civ. Proc. § 410.10.
6 8. The court has general personal jurisdiction over Defendants. All individual Defendants are
7 domiciled in California. All corporate Defendants are incorporated and/or have their principal
8 place of business in the state.
9 III. VENUE
10 9. Venue is proper in Alameda County because Defendants’ unlawful actions occurred in this
11 county and harmed BayLegal here. Cal. Code Civ. Proc. § 395.5.
12 IV. PARTIES
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13 A. Plaintiff
Bay Area Legal Aid
14 10. Plaintiff BayLegal is a California nonprofit and the largest provider of free legal services
15 for low-income residents of the seven Bay Area counties.
16 11. BayLegal’s Consumer Practice provides legal information, advice, and representation to
17 low-income consumers, particularly in connection to debt collection actions.
18 12. As explained further below, BayLegal has been injured by Defendants’ conduct because it
19 has been forced to divert its limited resources to identify and combat Defendants’ practices, which
20 interfere with BayLegal’s organizational mission to assist low-income consumers in debt
21 collection actions.
22 B. Defendants
23 13. The entities and individuals listed below acted individually and jointly with every other
24 named Defendant in committing all actions alleged in this Complaint.
25 14. At all relevant times, each Defendant acted (a) as a principal, (b) under express or implied
26 agency, and/or (c) with actual or ostensible authority to perform the acts alleged in this Complaint
27 on behalf of every other named Defendant.
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Complaint
1 15. Each entity Defendant is the alter ego of its owner or owners and there is insufficient
2 separation of identity between the owner(s) and the entity, and the owner(s) exercise(s) control
3 over the assets and conduct of the entity, such that injustice would result to BayLegal in this
4 matter if the corporate veil were to remain intact.
5 16. Defendants have engaged in a conspiracy, common enterprise, and common course of
6 conduct, the purpose of which is and was to engage in the violations of law alleged in this
7 Complaint. The conspiracy, common enterprise, and common course of conduct continue to the
8 present.
9 1. Entities
10 17. Defendant Achievable Solutions, Inc. (“ASI”) is a California corporation primarily
11 engaged in the business of buying and collecting on defaulted consumer debts. In its most recent
12 filing with the California Secretary of State, ASI lists its principal place of business as 3579 E.
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13 Foothill Blvd. #546, Pasadena, CA 91107.
Bay Area Legal Aid
14 18. Defendant A-United Attorney Service, Inc. (“AUAS”) is a California corporation. In its
15 January 2008 Statement of Information on file with the Secretary of State, AUAS lists its business
16 services as “court filings, process service.” The most recent address provided for AUAS is 560
17 W. Main St., Suite C117, Alhambra, CA 91801. AUAS’s status is currently listed as “FTB
18 Suspended.”
19 19. Defendant Sue Ya, Inc. is a California corporation primarily engaged in the business of
20 buying and collecting on defaulted consumer debts. SueYa’s website states that its business
21 “empowers consumers to file lawsuits, to issue eviction notices and to enforce legal judgments
22 using our fully-integrated online platform,” “without having to learn the law or show up to court!”
23 SueYa’s website states that SueYa purchased AUAS in 2018. SueYa lists its principal place of
24 business as 3579 E. Foothill Blvd. #546, Pasadena, CA 91107.
25 20. Defendant Harris Law Group is an entity providing legal services in California. The
26 address for Harris Law Group is 560 W. Main St., Suite C177, Alhambra, CA 91801. Harris Law
27 Group is associated with Wendy M. Harris, an individual formerly licensed to practice law in
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Complaint
1 California under State Bar Number 170632. Harris was suspended by the California State Bar on
2 April 21, 2021, following a disciplinary proceeding. Her status is listed as “inactive” as of May
3 21, 2021.
4 2. Individuals
5 21. Defendant Takashi Cheng is a natural person residing in California. ASI’s August 26, 2016
6 Articles of Incorporation names Cheng as ASI’s incorporator. In ASI’s most recent filings with the
7 Secretary of State, Cheng is listed as ASI’s agent for service of process. The address provided for
8 him is 3579 E. Foothill Blvd. #546, Pasadena, California 91107. Cheng is also listed as the
9 incorporator and the most recent President of AUAS. Cheng is the incorporator, secretary,
10 President, CEO, and CFO for SueYa.
11 22. Defendant Kiona Tchan AKA Kiona Yeung is a natural person residing in California. In
12 ASI’s 2020 Statement of Information, Tchan is listed as the current Director and CFO of ASI. She
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13 is also identified as the CEO of AUAS in a 2005 filing. The address provided for Tchan is 3579 E.
Bay Area Legal Aid
14 Foothill Blvd. #546, Pasadena, California 91107.
15 23. Defendant James Crawford is a natural or fictitious person residing in California. He is
16 listed as the process server for documents ASI files in connection with debt collection actions. On
17 the proofs of service he signs for ASI, Crawford provides AUAS’s name, address, and phone
18 number as his contact information. Crawford’s Los Angeles process server registration number is
19 listed as 3935, which is a registration number associated with AUAS and not with “James
20 Crawford.”
21 24. Defendant Halil Hasic is a natural person residing in California. He is licensed to practice
22 law in California under the State Bar Number 245251. Hasic represents ASI in debt collection
23 actions under the name of Harris Law Group. Hasic’s State Bar profile lists his address as 21550
24 Oxnard St. Fl. 3, Woodland Hills, CA 91367.
25 V. ABUSIVE PRACTICES IN CONSUMER DEBT COLLECTION ACTIONS
26 25. Consumer judgments, even for relatively low amounts, have a significant impact on the
27 lives of defendants. Such judgments are not subject to a statute of limitations. They accumulate
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Complaint
1 10% interest per year and can be freely assigned, renewed every 10 years in perpetuity, and
2 enforced through wage garnishments, bank levies, and liens.
3 26. As one study that examined national debt collection trends wrote, these forced judicial
4 collections hit low-income household budgets “like a bomb.” 1
5 27. Therefore, when granting a creditor judgment-collection powers on default, the California
6 courts, “however burdened they be, . . . must vigilantly attend to their duty in connection with the
7 default process, to act as gatekeeper, ensuring that only the appropriate claims get through.” 2
8 A. Debt Collectors Deliberately File False Proofs of Service
9 28. A significant problem in debt collection litigation is the practice of “sewer service,” which
10 is defined as “failing to serve a debtor and filing a fraudulent affidavit attesting to service so that
11 when the debtor later fails to appear in court, a default judgment is entered against him.” 3
12 29. Consumer advocates, state and local officials, and judges nationwide report that improper
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13 service of process is ubiquitous within the debt collection industry. 4
Bay Area Legal Aid
14 30. One survey found that 71% of defendants in debt buyer cases were improperly served or
15 not served at all. 5
16
1
17 Paul Kiel and Annie Waldman, The Color of Debt: How Collection Suits Squeeze Black
Neighborhoods, Oct. 8, 2015, https://www.propublica.org/article/debt-collection-lawsuits-
18 squeeze-black-neighborhoods.
2
19 Grappo v. McMills, 11 Cal. App. 5th 996, 1000 (2017) (cleaned up).
3
20 Freeman v. ABC Legal Servs., Inc., 827 F. Supp. 2d 1065, 1068 n.1 (N.D. Cal. 2011) (cleaned
up).
21
4
Appleseed, Due Process and Consumer Debt: Eliminating Barriers to Justice in Consumer
22 Credit Cases, at 12 (Feb. 2010), available at
http://ny.appleseednetwork.org/LinkClick.aspx?fileticket=dFHdRj22C XY%3d&tabid=252
23 (“Consumer debt litigants, court personnel, and judges all confirm that the number of default
judgments entered because the defendant was not actually served is unacceptably high. Several
24 interviewees maintain that defective service is the most prominent issue in consumer debt
litigation.”).
25
5
Jon Liebowitz et al., Fed. Trade Comm’n, Repairing a Broken System: Protecting Consumers in
26 Debt Collection Litigation and Arbitration, at 9 n. 23 (July 2010), available at
https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-bureau-
27 consumer-protection-staff-report-repairing-broken-system-protecting/debtcollectionreport.pdf
[https://perma.cc/57UH-DEJE].
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Complaint
1 31. The federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., was
2 enacted to “eliminate abusive debt collection practices by debt collectors, to [e]nsure that those
3 debt collectors who refrain from using abusive debt collection practices are not competitively
4 disadvantaged, and to promote consistent State action to protect consumers against debt collection
5 abuses.” 15 U.S.C. § 1692(e).
6 32. Similarly, California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA” or
7 “Rosenthal Act”), Cal. Civ. Code § 1788 et seq., is intended to “prohibit debt collectors from
8 engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require
9 debtors to act fairly in entering into and honoring such debts . . .” Cal. Civ. Code § 1788.1.
10 33. Courts have held that allegations of sewer service are sufficient to state a claim under the
11 FDCPA and Rosenthal Act. 6
12 B. Debt Buyers File Collection Cases Despite Lacking Essential Evidence
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13 34. Debt buyers purchase delinquent debts from banks and other original creditors for pennies
Bay Area Legal Aid
14 on the dollar. 7 Sometimes, the new owners try to collect on the debt themselves. Often, they turn
15 around and sell the debt to another debt buyer. Delinquent debts can thus be bought and resold
16 multiple times before anyone files a collection lawsuit.
17 35. When debts are bought and resold en masse over a period of years, critical documentation
18 about the debts (such as information about the borrower and the amount owed) is often not passed
19 along with the new ownership. Instead, “debts are sold with limited documentation and what little
20
21
22
6
See, e.g., Freeman, 827 F. Supp. 2d at 1075; Holmes v. Elec. Document Processing, Inc., 966 F.
23 Supp. 2d 925, 934 (N.D. Cal. 2013) (holding that plaintiff adequately stated a claim under the
FDCPA and Rosenthal Act based on the defendants allegedly filing fraudulent affidavits of
24 service); Bowens v. LR Credit 10, LLC, 2011 WL 6208303, at *3 (W.D.N.Y., Dec. 14, 2011)
(“[F]ailing to serve process and perjuring affidavits of service . . . violates the FDCPA.”).
25
7
An analysis by the Federal Trade Commission found that debt buyers pay an average of four
26 cents for each dollar of debt. See Jon Leibowitz et al., Fed. Trade Comm’n, The Structure and
Practices of the Debt Buying Industry, at 23 (Jan. 2013), available at
27 https://www.ftc.gov/sites/default/files/documents/reports/structure-and-practices-debt-buying-
industry/debtbuyingreport.pdf [https://perma.cc/R8N4-9XY7].
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Complaint
1 information is shared is sold ‘as is,’ without any guarantees that the information about the
2 borrower or amount owed is accurate.” 8
3 36. In one study, the Federal Trade Commission analyzed over 5 million accounts and found
4 that debt buyers received documentation for only about 6% of accounts at the time of purchase. 9
5 37. As a result, debt buyers often file debt collection lawsuits based on inadequate or
6 incomplete documentation that does not accurately report information about the consumer or the
7 debt allegedly owed. 10 Even worse, “some debt collectors file lawsuits despite knowing that they
8 do not have sufficient evidence to establish that they own the debt.” 11 Without such evidence, debt
9 collectors do not have standing to collect on the debts allegedly owed and cannot meet their
10 burden of proof on the merits of collection cases.
11 38. The California Legislature has determined that the validity of evidence—or lack thereof—
12 submitted in support of default judgments is a “significant focus of public concern,” particularly in
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13 the context of high-volume, “assembly-line” consumer collection litigation by debt buyers. 12 Thus,
Bay Area Legal Aid
14 in 2013, the Legislature enacted the California Fair Debt Buying Practices Act (“FDBPA”), Cal.
15 Civ. Code §§ 1788.50 et seq., to set evidentiary standards for debt buyers who file collection
16 lawsuits.
17 39. The FDBPA requires debt buyers to possess, maintain, and produce specific documents
18 and information in order to collect, sue, or obtain a default judgment on a consumer debt. Cal. Civ.
19 Code §§ 1788.52, 1788.58, 1788.60. These records must include information about the debt and
20 its ownership, among other details. Cal. Civ. Code § 1788.52.
21
22
8
23 Lisa Stifler, Debt in the Courts: The Scourge of Abusive Debt Collection Litigation and Possible
Policy Solutions, 11 Harv. L. & Pol’y Rev. 91, 97 (2017).
24
9
The Structure and Practices of the Debt Buying Industry, supra note 7, at 35 n. 150.
25
10
See Stifler, supra note 8, at 100-103.
26
11
Id. at 102.
27 12
California Sen. Bill No. 233 (2013-2014 Reg. Sess).
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Complaint
1 40. Additionally, a debt buyer must possess either a signed contract or a document that was
2 provided to the debtor while the account was active (e.g., an account statement). Cal. Civ. Code §§
3 1788.52(b), 1788.60(b). The debt buyer must attach this document to the complaint in a collection
4 action. Cal. Civ. Code § 1788.58(b). The debt buyer must also authenticate the document and
5 business records sufficient to establish other allegations mandated by the FDBPA to obtain a
6 judgment in the action. Cal. Civ. Code § 1788.60(a), (b).
7 VI. CASE BACKGROUND
8 A. Facts
9 41. Defendants are closely intertwined individuals and businesses that conspire to obtain
10 default state court judgments against California consumers through illegal and fraudulent means.
11 42. Specifically, Defendants purchase defaulted debts, especially debts accrued in connection
12 to small-dollar, high-interest loans. When Defendants file collection lawsuits based on these debts,
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13 they intentionally fail to serve the defendants in those actions with a copy of the summons and
Bay Area Legal Aid
14 complaint. Defendants nevertheless file proofs of service and falsely attest (under penalty of
15 perjury) that the defendant consumers have been properly served. Defendants then seek, and
16 usually obtain, default judgments. Their motions for default judgments are supported by the
17 perjured proofs of service and on false or misleading declarations and unauthenticated documents.
18 43. These practices enable Defendants to obtain default judgments based on woefully
19 insufficient evidence without consumer defendants learning about the lawsuits against them until
20 after a judgment has been entered.
21 44. Defendants’ illegal, profitmongering scheme has persisted because the same few
22 individuals control all the relevant actors—the debt collection company, its process service
23 agency, and even the law firm who prosecutes the collection cases.
24 45. The facts provided below show how Defendants have acted in concert with each other to
25 perpetrate this scheme through numerous unethical, illegal, and fraudulent practices.
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Complaint
1 1. Defendants Are Closely Connected by a Web of Agency Relationships
2 46. Defendants are several entities and persons with numerous close connections to each
3 other.
4 47. Cheng holds multiple officer positions in ASI, AUAS, and SueYa. Cheng is the
5 incorporator of and agent for service of process for ASI, which is the plaintiff and assignee in each
6 debt collection action at issue in this case. In addition, Cheng is the incorporator and President of
7 AUAS, the entity under whose name the consumer defendants are allegedly served. Cheng is the
8 CEO, CFO, and Secretary of SueYa, the entity that acquired AUAS in 2018. Finally, Cheng is
9 listed as SueYa’s agent for service of process.
10 48. Tchan is also an officer of both ASI and AUAS. She serves as the Director and CFO of
11 ASI and as the CEO of AUAS.
12 49. Common ownership of ASI and AUAS allows ASI to obtain default judgments by
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13 intentionally failing to properly serve defendants. This improper service is then “verified” through
Bay Area Legal Aid
14 AUAS, a “registered” process service agency that is actually just another agent of ASI, which
15 disguises the improper service under a façade of compliance with the applicable service laws.
16 50. Harris Law Group, the legal entity representing ASI in these actions, operates at the same
17 address as AUAS, although from a different suite number (#177 instead of #117). Further, Harris
18 Law Group’s website, “thatislegal.com,” was registered by AUAS.
19 51. The close ties between Harris Law Group and AUAS evidence collusion between those
20 entities. ASI’s use of an attorney who is actually an agent of, or co-conspirator with, ASI and
21 AUAS allows Defendants to obtain default judgments through fraudulent means without
22 interference by an unaffected legal representative.
23 2. Defendants Conspire to Defraud California Courts and Consumers
24 52. As described above, Defendants are closely connected through common ownership and
25 agency relationships. These connections permit Defendants to perpetuate a scheme of mass fraud
26 in debt collection actions while evading scrutiny for their actions. The scheme is perpetrated as
27 follows.
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Complaint
1 53. ASI buys defaulted debt and prosecutes debt collection actions. Between October 21, 2019
2 and March 12, 2020, ASI filed 37 lawsuits in San Francisco Superior Court. In the complaints for
3 each of these lawsuits, ASI alleged that it was a “debt buyer” and an assignee of a consumer debt
4 owed to a high-cost lender called LoanMe, Inc. ASI asserts that it is the fifth successive assignee
5 of the accounts, having purchased them from a preceding debt buyer in December 2018.
6 54. In each of these cases, ASI seeks to enforce high-cost consumer loans with an annual
7 percentage rate between 99% and 184%.
8 55. In connection with each lawsuit, ASI—through its legal counsel, Hasic and Harris Law
9 Group—files a proof of service attesting that the defendant consumer has been served with a copy
10 of the summons and complaint. All proofs of service are signed by James Crawford, operating
11 under the name and Los Angeles County process server registration number of AUAS.
12 56. As set forth below, there are numerous indications that AUAS and Crawford intentionally
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13 fail to serve the defendants in these debt collection actions. Nevertheless, ASI and its attorney(s)
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14 file proofs of service that falsely state that service has been completed. ASI and its counsel know
15 that the consumers have not actually been served, or even facilitate/direct the creation of the false
16 proofs of service.
17 57. After filing the fraudulent proofs of service, ASI and its counsel then request and obtain
18 default judgments against the unknowing consumers. In support of its requests for default
19 judgment, ASI files legally insufficient, misleading, or false declarations and other documentation.
20 58. The following sections lay out (1) Defendants’ practice of fabricating and filing fraudulent
21 proofs of service in violation of the FDCPA and Rosenthal Act and (2) Defendants’ practice of
22 submitting false or misleading declarations in support of their motions for default judgment in
23 violation of the FDBPA. These actions are unlawful within the meaning of California’s Unfair
24 Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. As explained further below,
25 Defendants’ scheme also constitutes unfair and fraudulent conduct under the UCL.
26
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Complaint
1 a. Defendants File False Proofs of Service Under Penalty of Perjury
2 59. There is ample evidence that the proofs of service filed in the challenged debt collection
3 actions are deliberately fabricated. ASI filed a proof of service in 36 of the 37 lawsuits it brought
4 between October 21, 2019 and March 12, 2020 in San Francisco Superior Court. These proofs of
5 service are, when examined collectively, improbably similar and facially indicative of fraud.
6 60. Every one of the 36 proofs of service filed in ASI’s San Francisco Superior Court debt
7 collection lawsuits:
8 • Is signed by a “registered California process server” named “James Crawford” with a listed
9 Los Angeles County process server registration number of 3935. This process server
10 registration number is assigned to Defendant AUAS, and not to “James Crawford.” “James
11 Crawford” signs each of the proofs of service, under penalty of perjury, with an “X”:
12
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13
Bay Area Legal Aid
14
15 • Alleges substitute service rather than personal service and names the person served as
16 either “John Doe” or “Jane Doe” and describes them as a “Co-occupant.”
17 • Describes the person served as either a “Male Hispanic” or “Female Hispanic” in their
18 “Late 30’s” or “Late 40’s,” with “Brown Eyes” and either “Black Hair or Brown Hair.”
19 61. Every one of the 36 cases for which ASI filed a proof of service in San Francisco Superior
20 Court resulted in a default judgment against the defendant. No defendant responded to or appeared
21 in any of these actions, other than the case in which BayLegal represented a defendant in a motion
22 to set aside his default judgment.
23 62. A review of ASI’s case filings in Alameda and Santa Clara County 13 shows similarly
24 disturbing indications of fraudulent service.
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26
13
San Francisco, Alameda, and Santa Clara County are the only Bay Area counties for which
27 BayLegal could review Defendants’ court filings. BayLegal is informed and believes that
Defendants engage in these practices throughout the entire state.
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Complaint
1 63. ASI filed 100 lawsuits in Alameda County Superior Court and 79 in Santa Clara Superior
2 Court between October 7, 2019 and May 22, 2020. Each of these cases was on a high interest loan
3 allegedly originated by LoanMe. ASI filed proofs of service in all but six of these cases. As in the
4 San Francisco Superior Court cases:
5 • Each proof of service was signed with an “X” by “James Crawford” using the Los Angeles
6 County process server registration assigned to AUAS.
7 • Each proof of service alleges substitute rather than personal service.
8 • No defendant ever appeared in the lawsuit after allegedly being served.
9 64. Additionally, as in San Francisco, every proof of service ASI filed in Alameda County
10 during this period names the person served as either “John Doe” or “Jane Doe” and describes them
11 as either a “Male Hispanic” or “Female Hispanic” in their “Late 30’s” or “Late 40’s,” with
12 “Brown Eyes” and either “Black Hair” or “Brown Hair.”
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13 65. ASI’s attestations of proper service are not only extraordinarily improbable, but often
Bay Area Legal Aid
14 physically impossible. For example, before 4:00 p.m. on January 25, 2020, “James Crawford”
15 allegedly:
16 • Attempted service at Chinook Ct. in San Francisco at 7:00 am. (SF Sup. Ct. Case No.
17 CGC-19-581292)
18 • Traveled approximately 43 miles (in 31 minutes) to attempt service on Heath St. in
19 Milpitas at 7:31 am. (Santa Clara Sup. Ct. Case No. 19CV360408)
20 • Returned approximately 49 miles (in 5 minutes) to San Francisco to attempt service on
21 Sanches St. at 7:36 am. (SF Sup. Ct. Case No. CGC-19-581315)
22 • Traveled approximately 32 miles (in 20 minutes) to Sleepy Hollow Ln. in Hayward to
23 attempt service at 7:56 am. (Alameda Sup. Ct. Case No. HG19046185)
24 • Returned approximately 30 miles (in 3 minutes) to San Jose to attempt service on
25 Lancelot Ln. at 7:59 am. (Santa Clara Sup. Ct. Case No. 19CV359768)
26 • Traveled approximately 28 miles to Peterman Ln. in Hayward at 9:19 am. (Alameda Sup.
27 Ct. Case No. HG19045774)
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1 • Returned approximately 25 miles (in 11 minutes) to Easton Pl. in San Jose to complete
2 substitute service at 9:40 am. (Santa Clara Sup. Ct. Case No. 19CV359046)
3 • Returned approximately 28 miles to Hayward to complete substitute service on Alice St. at
4 10:16 am. (Alameda Sup. Ct. Case No. HG19048071)
5 • Traveled approximately 33 miles back to San Jose to attempt service on Glenrio Dr. at
6 11:12 am. (Santa Clara Sup. Ct. Case No. 19360932)
7 • Traveled approximately 50 miles to Berkeley to attempt service on Otis St. at 3:19 p.m.
8 (Alameda Sup. Ct. Case No. RG19048336)
9 • Traveled approximately 41 miles (in 25 minutes) to Palo Alto to attempt service on
10 Lupine Ave. at 3:44 pm. (Santa Clara Sup. Ct. Case No. 19CV359875)
11 In another example, in less than one hour on the morning of March 15, 2020, “James Crawford”
12 allegedly:
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13 • Completed substitute service on Palm Valley Blvd. in San Jose at 7:00 am. (Santa Clara
Bay Area Legal Aid
14 Sup. Ct. Case No. 20CV362691)
15 • Traveled approximately 19 miles (in 10 minutes) to completed substitute service on Duff
16 Ct. in Sunnyvale at 7:10 am. (Santa Clara Sup. Ct. Case No. 20CV362383)
17 • Simultaneously attempted service, also at 7:10 am, 30 miles away on Harvest Rd. in
18 Pleasanton. (Alameda Sup. Ct. Case No. HG20054569)
19 • Returned 31 miles to Terra Cotta Dr. in San Jose to attempt service at 7:37 am. (Santa
20 Clara Sup. Ct. Case No. 20CV364724)
21 66. On its own, each individual claim of service would appear plausible to a clerk or judge
22 examining it. Even Defendants’ claims of service within each judicial district are perhaps
23 possible. When viewed in totality, however, Defendants’ attestations of service are clearly
24 fraudulent. Further, none of the alleged services resulted in an appearance by any consumer
25 defendant.
26 67. Defendants know that courts rely on proofs of service signed under penalty of perjury.
27 Defendants assume that courts will not cross-reference their allegations of proper service to those
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1 in other cases and will certainly not cross-reference their activities in other jurisdictions. Thus,
2 Defendants exploit and manipulate the normal operation of California’s overburdened c
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BAY AREA LEGAL AID 1 Noah Zinner (Bar No. 247581) 2 Malachi J. Haswell (Bar No. 307729) Katherine Sass (Bar No. 326185) 3 Adrian Paredes (Bar No. 332353) 1735 Telegraph Ave. 4 Oakland, CA 94612 Telephone: (510)250-5205 5 khaswell@baylegal.org 6 KEMNITZER, BARRON & KRIEG, LLP 7 Kristin Kemnitzer (Bar No. 278946) Adam J. McNeile (Bar No. 280296) 8 42 Miller Ave., 3rd Floor Mill Valley, CA 94941 9 Telephone: (415) 632-1900 10 Facsimile: (415) 632-1901 kristin@kbklegal.com 11 adam@kbklegal.com 12 BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP Daniel E. Birkhaeuser (Bar No. 136646) Working Together for Justice 13 2125 Oak Grove Road, Suite 125 Walnut Creek, California 94598 Bay Area Legal Aid 14 Telephone: (925) 945-0200 Facsimile: (925) 945-8792 15 dbirkhaeuser@bramsonplutzik.com 16 Attorneys for BAY AREA LEGAL AID 17 SUPERIOR COURT OF CALIFORNIA 18 COUNTY OF ALAMEDA 19 20 BAY AREA LEGAL AID, Case No. 21 Plaintiff, COMPLAINT FOR PERMANENT 22 INJUNCTION v. 23 California Unfair Competition Law (Cal. ACHIEVABLE SOLUTIONS, INC.; Bus. & Prof. Code § 17200 et seq.). A-UNITED ATTORNEY SERVICE, INC.; 24 SUE YA, INC.; Unlimited Civil Case HARRIS LAW GROUP; 25 TAKASHI CHENG; COMPLEX DETERMINATION REQUESTED KIONA TCHAN aka KIONA YEUNG; 26 JAMES CRAWFORD; and HALIL HASIC, 27 Defendants. 28 1 Complaint 1 I. INTRODUCTION 2 1. Litigants in civil court are entitled to fundamental safeguards such as fair notice of a case, 3 substantiated allegations, and accurate representations. So when Defendants—a debt collector and 4 related parties—flagrantly circumvent such protections to secure default judgments based on 5 manufactured evidence and outright perjury, the Court has the power and the duty to intervene. 6 Defendants’ conduct not only causes grave harm to low-income, vulnerable consumers, it also 7 forces courts to become unwitting accomplices to Defendants’ fraud and turns due process into a 8 profit mill. 9 2. Defendants have conspired to commit a litany of debt collection abuses against hundreds, 10 if not thousands, of California consumers. Specifically, Defendants file collection suits and then 11 intentionally fail to serve the defendants in those actions with a copy of the summons and 12 complaint. Defendants then file proofs of service that falsely attest that the defendants have been Working Together for Justice 13 properly served. When the defendant consumers understandably do not appear in their cases, Bay Area Legal Aid 14 Defendants seek—and in nearly every case obtain—default judgments based on both the false 15 proofs of service and on false or misleading declarations and unauthenticated documents. 16 3. Because the documentation for any individual debt collection action is, on its own, facially 17 plausible, and because these documents are supported by false statements made under penalty of 18 perjury, Defendants’ unlawful conduct has escaped judicial and public scrutiny. 19 4. Plaintiff Bay Area Legal Aid (“BayLegal”), as the largest provider of free legal services in 20 the Bay Area, has suffered and will continue to suffer harm because of Defendants’ unlawful 21 conduct. BayLegal has been forced to divert its limited resources to identify and combat 22 Defendants’ illegal practices in order to fulfill its mission of helping consumers understand and 23 respond to debt collection actions. BayLegal’s mission is also impaired by Defendants’ scheme 24 because consumers never receive notice of the lawsuits against them and therefore do not know to 25 seek out BayLegal’s assistance. 26 5. BayLegal now seeks judicial intervention to stop Defendants’ illegal practices and to 27 enjoin Defendants from enforcing the fraudulently obtained default judgments. 28 2 Complaint 1 II. JURISDICTION 2 6. Because BayLegal seeks permanent injunctive relief, this case is properly classified as an 3 unlimited civil action. Cal. Code Civ. Proc. § 86(a)(8), 88. 4 7. The court has original subject matter jurisdiction under Cal. Const. Art. VI § 10 and Cal. 5 Code Civ. Proc. § 410.10. 6 8. The court has general personal jurisdiction over Defendants. All individual Defendants are 7 domiciled in California. All corporate Defendants are incorporated and/or have their principal 8 place of business in the state. 9 III. VENUE 10 9. Venue is proper in Alameda County because Defendants’ unlawful actions occurred in this 11 county and harmed BayLegal here. Cal. Code Civ. Proc. § 395.5. 12 IV. PARTIES Working Together for Justice 13 A. Plaintiff Bay Area Legal Aid 14 10. Plaintiff BayLegal is a California nonprofit and the largest provider of free legal services 15 for low-income residents of the seven Bay Area counties. 16 11. BayLegal’s Consumer Practice provides legal information, advice, and representation to 17 low-income consumers, particularly in connection to debt collection actions. 18 12. As explained further below, BayLegal has been injured by Defendants’ conduct because it 19 has been forced to divert its limited resources to identify and combat Defendants’ practices, which 20 interfere with BayLegal’s organizational mission to assist low-income consumers in debt 21 collection actions. 22 B. Defendants 23 13. The entities and individuals listed below acted individually and jointly with every other 24 named Defendant in committing all actions alleged in this Complaint. 25 14. At all relevant times, each Defendant acted (a) as a principal, (b) under express or implied 26 agency, and/or (c) with actual or ostensible authority to perform the acts alleged in this Complaint 27 on behalf of every other named Defendant. 28 3 Complaint 1 15. Each entity Defendant is the alter ego of its owner or owners and there is insufficient 2 separation of identity between the owner(s) and the entity, and the owner(s) exercise(s) control 3 over the assets and conduct of the entity, such that injustice would result to BayLegal in this 4 matter if the corporate veil were to remain intact. 5 16. Defendants have engaged in a conspiracy, common enterprise, and common course of 6 conduct, the purpose of which is and was to engage in the violations of law alleged in this 7 Complaint. The conspiracy, common enterprise, and common course of conduct continue to the 8 present. 9 1. Entities 10 17. Defendant Achievable Solutions, Inc. (“ASI”) is a California corporation primarily 11 engaged in the business of buying and collecting on defaulted consumer debts. In its most recent 12 filing with the California Secretary of State, ASI lists its principal place of business as 3579 E. Working Together for Justice 13 Foothill Blvd. #546, Pasadena, CA 91107. Bay Area Legal Aid 14 18. Defendant A-United Attorney Service, Inc. (“AUAS”) is a California corporation. In its 15 January 2008 Statement of Information on file with the Secretary of State, AUAS lists its business 16 services as “court filings, process service.” The most recent address provided for AUAS is 560 17 W. Main St., Suite C117, Alhambra, CA 91801. AUAS’s status is currently listed as “FTB 18 Suspended.” 19 19. Defendant Sue Ya, Inc. is a California corporation primarily engaged in the business of 20 buying and collecting on defaulted consumer debts. SueYa’s website states that its business 21 “empowers consumers to file lawsuits, to issue eviction notices and to enforce legal judgments 22 using our fully-integrated online platform,” “without having to learn the law or show up to court!” 23 SueYa’s website states that SueYa purchased AUAS in 2018. SueYa lists its principal place of 24 business as 3579 E. Foothill Blvd. #546, Pasadena, CA 91107. 25 20. Defendant Harris Law Group is an entity providing legal services in California. The 26 address for Harris Law Group is 560 W. Main St., Suite C177, Alhambra, CA 91801. Harris Law 27 Group is associated with Wendy M. Harris, an individual formerly licensed to practice law in 28 4 Complaint 1 California under State Bar Number 170632. Harris was suspended by the California State Bar on 2 April 21, 2021, following a disciplinary proceeding. Her status is listed as “inactive” as of May 3 21, 2021. 4 2. Individuals 5 21. Defendant Takashi Cheng is a natural person residing in California. ASI’s August 26, 2016 6 Articles of Incorporation names Cheng as ASI’s incorporator. In ASI’s most recent filings with the 7 Secretary of State, Cheng is listed as ASI’s agent for service of process. The address provided for 8 him is 3579 E. Foothill Blvd. #546, Pasadena, California 91107. Cheng is also listed as the 9 incorporator and the most recent President of AUAS. Cheng is the incorporator, secretary, 10 President, CEO, and CFO for SueYa. 11 22. Defendant Kiona Tchan AKA Kiona Yeung is a natural person residing in California. In 12 ASI’s 2020 Statement of Information, Tchan is listed as the current Director and CFO of ASI. She Working Together for Justice 13 is also identified as the CEO of AUAS in a 2005 filing. The address provided for Tchan is 3579 E. Bay Area Legal Aid 14 Foothill Blvd. #546, Pasadena, California 91107. 15 23. Defendant James Crawford is a natural or fictitious person residing in California. He is 16 listed as the process server for documents ASI files in connection with debt collection actions. On 17 the proofs of service he signs for ASI, Crawford provides AUAS’s name, address, and phone 18 number as his contact information. Crawford’s Los Angeles process server registration number is 19 listed as 3935, which is a registration number associated with AUAS and not with “James 20 Crawford.” 21 24. Defendant Halil Hasic is a natural person residing in California. He is licensed to practice 22 law in California under the State Bar Number 245251. Hasic represents ASI in debt collection 23 actions under the name of Harris Law Group. Hasic’s State Bar profile lists his address as 21550 24 Oxnard St. Fl. 3, Woodland Hills, CA 91367. 25 V. ABUSIVE PRACTICES IN CONSUMER DEBT COLLECTION ACTIONS 26 25. Consumer judgments, even for relatively low amounts, have a significant impact on the 27 lives of defendants. Such judgments are not subject to a statute of limitations. They accumulate 28 5 Complaint 1 10% interest per year and can be freely assigned, renewed every 10 years in perpetuity, and 2 enforced through wage garnishments, bank levies, and liens. 3 26. As one study that examined national debt collection trends wrote, these forced judicial 4 collections hit low-income household budgets “like a bomb.” 1 5 27. Therefore, when granting a creditor judgment-collection powers on default, the California 6 courts, “however burdened they be, . . . must vigilantly attend to their duty in connection with the 7 default process, to act as gatekeeper, ensuring that only the appropriate claims get through.” 2 8 A. Debt Collectors Deliberately File False Proofs of Service 9 28. A significant problem in debt collection litigation is the practice of “sewer service,” which 10 is defined as “failing to serve a debtor and filing a fraudulent affidavit attesting to service so that 11 when the debtor later fails to appear in court, a default judgment is entered against him.” 3 12 29. Consumer advocates, state and local officials, and judges nationwide report that improper Working Together for Justice 13 service of process is ubiquitous within the debt collection industry. 4 Bay Area Legal Aid 14 30. One survey found that 71% of defendants in debt buyer cases were improperly served or 15 not served at all. 5 16 1 17 Paul Kiel and Annie Waldman, The Color of Debt: How Collection Suits Squeeze Black Neighborhoods, Oct. 8, 2015, https://www.propublica.org/article/debt-collection-lawsuits- 18 squeeze-black-neighborhoods. 2 19 Grappo v. McMills, 11 Cal. App. 5th 996, 1000 (2017) (cleaned up). 3 20 Freeman v. ABC Legal Servs., Inc., 827 F. Supp. 2d 1065, 1068 n.1 (N.D. Cal. 2011) (cleaned up). 21 4 Appleseed, Due Process and Consumer Debt: Eliminating Barriers to Justice in Consumer 22 Credit Cases, at 12 (Feb. 2010), available at http://ny.appleseednetwork.org/LinkClick.aspx?fileticket=dFHdRj22C XY%3d&tabid=252 23 (“Consumer debt litigants, court personnel, and judges all confirm that the number of default judgments entered because the defendant was not actually served is unacceptably high. Several 24 interviewees maintain that defective service is the most prominent issue in consumer debt litigation.”). 25 5 Jon Liebowitz et al., Fed. Trade Comm’n, Repairing a Broken System: Protecting Consumers in 26 Debt Collection Litigation and Arbitration, at 9 n. 23 (July 2010), available at https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-bureau- 27 consumer-protection-staff-report-repairing-broken-system-protecting/debtcollectionreport.pdf [https://perma.cc/57UH-DEJE]. 28 6 Complaint 1 31. The federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., was 2 enacted to “eliminate abusive debt collection practices by debt collectors, to [e]nsure that those 3 debt collectors who refrain from using abusive debt collection practices are not competitively 4 disadvantaged, and to promote consistent State action to protect consumers against debt collection 5 abuses.” 15 U.S.C. § 1692(e). 6 32. Similarly, California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA” or 7 “Rosenthal Act”), Cal. Civ. Code § 1788 et seq., is intended to “prohibit debt collectors from 8 engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require 9 debtors to act fairly in entering into and honoring such debts . . .” Cal. Civ. Code § 1788.1. 10 33. Courts have held that allegations of sewer service are sufficient to state a claim under the 11 FDCPA and Rosenthal Act. 6 12 B. Debt Buyers File Collection Cases Despite Lacking Essential Evidence Working Together for Justice 13 34. Debt buyers purchase delinquent debts from banks and other original creditors for pennies Bay Area Legal Aid 14 on the dollar. 7 Sometimes, the new owners try to collect on the debt themselves. Often, they turn 15 around and sell the debt to another debt buyer. Delinquent debts can thus be bought and resold 16 multiple times before anyone files a collection lawsuit. 17 35. When debts are bought and resold en masse over a period of years, critical documentation 18 about the debts (such as information about the borrower and the amount owed) is often not passed 19 along with the new ownership. Instead, “debts are sold with limited documentation and what little 20 21 22 6 See, e.g., Freeman, 827 F. Supp. 2d at 1075; Holmes v. Elec. Document Processing, Inc., 966 F. 23 Supp. 2d 925, 934 (N.D. Cal. 2013) (holding that plaintiff adequately stated a claim under the FDCPA and Rosenthal Act based on the defendants allegedly filing fraudulent affidavits of 24 service); Bowens v. LR Credit 10, LLC, 2011 WL 6208303, at *3 (W.D.N.Y., Dec. 14, 2011) (“[F]ailing to serve process and perjuring affidavits of service . . . violates the FDCPA.”). 25 7 An analysis by the Federal Trade Commission found that debt buyers pay an average of four 26 cents for each dollar of debt. See Jon Leibowitz et al., Fed. Trade Comm’n, The Structure and Practices of the Debt Buying Industry, at 23 (Jan. 2013), available at 27 https://www.ftc.gov/sites/default/files/documents/reports/structure-and-practices-debt-buying- industry/debtbuyingreport.pdf [https://perma.cc/R8N4-9XY7]. 28 7 Complaint 1 information is shared is sold ‘as is,’ without any guarantees that the information about the 2 borrower or amount owed is accurate.” 8 3 36. In one study, the Federal Trade Commission analyzed over 5 million accounts and found 4 that debt buyers received documentation for only about 6% of accounts at the time of purchase. 9 5 37. As a result, debt buyers often file debt collection lawsuits based on inadequate or 6 incomplete documentation that does not accurately report information about the consumer or the 7 debt allegedly owed. 10 Even worse, “some debt collectors file lawsuits despite knowing that they 8 do not have sufficient evidence to establish that they own the debt.” 11 Without such evidence, debt 9 collectors do not have standing to collect on the debts allegedly owed and cannot meet their 10 burden of proof on the merits of collection cases. 11 38. The California Legislature has determined that the validity of evidence—or lack thereof— 12 submitted in support of default judgments is a “significant focus of public concern,” particularly in Working Together for Justice 13 the context of high-volume, “assembly-line” consumer collection litigation by debt buyers. 12 Thus, Bay Area Legal Aid 14 in 2013, the Legislature enacted the California Fair Debt Buying Practices Act (“FDBPA”), Cal. 15 Civ. Code §§ 1788.50 et seq., to set evidentiary standards for debt buyers who file collection 16 lawsuits. 17 39. The FDBPA requires debt buyers to possess, maintain, and produce specific documents 18 and information in order to collect, sue, or obtain a default judgment on a consumer debt. Cal. Civ. 19 Code §§ 1788.52, 1788.58, 1788.60. These records must include information about the debt and 20 its ownership, among other details. Cal. Civ. Code § 1788.52. 21 22 8 23 Lisa Stifler, Debt in the Courts: The Scourge of Abusive Debt Collection Litigation and Possible Policy Solutions, 11 Harv. L. & Pol’y Rev. 91, 97 (2017). 24 9 The Structure and Practices of the Debt Buying Industry, supra note 7, at 35 n. 150. 25 10 See Stifler, supra note 8, at 100-103. 26 11 Id. at 102. 27 12 California Sen. Bill No. 233 (2013-2014 Reg. Sess). 28 8 Complaint 1 40. Additionally, a debt buyer must possess either a signed contract or a document that was 2 provided to the debtor while the account was active (e.g., an account statement). Cal. Civ. Code §§ 3 1788.52(b), 1788.60(b). The debt buyer must attach this document to the complaint in a collection 4 action. Cal. Civ. Code § 1788.58(b). The debt buyer must also authenticate the document and 5 business records sufficient to establish other allegations mandated by the FDBPA to obtain a 6 judgment in the action. Cal. Civ. Code § 1788.60(a), (b). 7 VI. CASE BACKGROUND 8 A. Facts 9 41. Defendants are closely intertwined individuals and businesses that conspire to obtain 10 default state court judgments against California consumers through illegal and fraudulent means. 11 42. Specifically, Defendants purchase defaulted debts, especially debts accrued in connection 12 to small-dollar, high-interest loans. When Defendants file collection lawsuits based on these debts, Working Together for Justice 13 they intentionally fail to serve the defendants in those actions with a copy of the summons and Bay Area Legal Aid 14 complaint. Defendants nevertheless file proofs of service and falsely attest (under penalty of 15 perjury) that the defendant consumers have been properly served. Defendants then seek, and 16 usually obtain, default judgments. Their motions for default judgments are supported by the 17 perjured proofs of service and on false or misleading declarations and unauthenticated documents. 18 43. These practices enable Defendants to obtain default judgments based on woefully 19 insufficient evidence without consumer defendants learning about the lawsuits against them until 20 after a judgment has been entered. 21 44. Defendants’ illegal, profitmongering scheme has persisted because the same few 22 individuals control all the relevant actors—the debt collection company, its process service 23 agency, and even the law firm who prosecutes the collection cases. 24 45. The facts provided below show how Defendants have acted in concert with each other to 25 perpetrate this scheme through numerous unethical, illegal, and fraudulent practices. 26 27 28 9 Complaint 1 1. Defendants Are Closely Connected by a Web of Agency Relationships 2 46. Defendants are several entities and persons with numerous close connections to each 3 other. 4 47. Cheng holds multiple officer positions in ASI, AUAS, and SueYa. Cheng is the 5 incorporator of and agent for service of process for ASI, which is the plaintiff and assignee in each 6 debt collection action at issue in this case. In addition, Cheng is the incorporator and President of 7 AUAS, the entity under whose name the consumer defendants are allegedly served. Cheng is the 8 CEO, CFO, and Secretary of SueYa, the entity that acquired AUAS in 2018. Finally, Cheng is 9 listed as SueYa’s agent for service of process. 10 48. Tchan is also an officer of both ASI and AUAS. She serves as the Director and CFO of 11 ASI and as the CEO of AUAS. 12 49. Common ownership of ASI and AUAS allows ASI to obtain default judgments by Working Together for Justice 13 intentionally failing to properly serve defendants. This improper service is then “verified” through Bay Area Legal Aid 14 AUAS, a “registered” process service agency that is actually just another agent of ASI, which 15 disguises the improper service under a façade of compliance with the applicable service laws. 16 50. Harris Law Group, the legal entity representing ASI in these actions, operates at the same 17 address as AUAS, although from a different suite number (#177 instead of #117). Further, Harris 18 Law Group’s website, “thatislegal.com,” was registered by AUAS. 19 51. The close ties between Harris Law Group and AUAS evidence collusion between those 20 entities. ASI’s use of an attorney who is actually an agent of, or co-conspirator with, ASI and 21 AUAS allows Defendants to obtain default judgments through fraudulent means without 22 interference by an unaffected legal representative. 23 2. Defendants Conspire to Defraud California Courts and Consumers 24 52. As described above, Defendants are closely connected through common ownership and 25 agency relationships. These connections permit Defendants to perpetuate a scheme of mass fraud 26 in debt collection actions while evading scrutiny for their actions. The scheme is perpetrated as 27 follows. 28 10 Complaint 1 53. ASI buys defaulted debt and prosecutes debt collection actions. Between October 21, 2019 2 and March 12, 2020, ASI filed 37 lawsuits in San Francisco Superior Court. In the complaints for 3 each of these lawsuits, ASI alleged that it was a “debt buyer” and an assignee of a consumer debt 4 owed to a high-cost lender called LoanMe, Inc. ASI asserts that it is the fifth successive assignee 5 of the accounts, having purchased them from a preceding debt buyer in December 2018. 6 54. In each of these cases, ASI seeks to enforce high-cost consumer loans with an annual 7 percentage rate between 99% and 184%. 8 55. In connection with each lawsuit, ASI—through its legal counsel, Hasic and Harris Law 9 Group—files a proof of service attesting that the defendant consumer has been served with a copy 10 of the summons and complaint. All proofs of service are signed by James Crawford, operating 11 under the name and Los Angeles County process server registration number of AUAS. 12 56. As set forth below, there are numerous indications that AUAS and Crawford intentionally Working Together for Justice 13 fail to serve the defendants in these debt collection actions. Nevertheless, ASI and its attorney(s) Bay Area Legal Aid 14 file proofs of service that falsely state that service has been completed. ASI and its counsel know 15 that the consumers have not actually been served, or even facilitate/direct the creation of the false 16 proofs of service. 17 57. After filing the fraudulent proofs of service, ASI and its counsel then request and obtain 18 default judgments against the unknowing consumers. In support of its requests for default 19 judgment, ASI files legally insufficient, misleading, or false declarations and other documentation. 20 58. The following sections lay out (1) Defendants’ practice of fabricating and filing fraudulent 21 proofs of service in violation of the FDCPA and Rosenthal Act and (2) Defendants’ practice of 22 submitting false or misleading declarations in support of their motions for default judgment in 23 violation of the FDBPA. These actions are unlawful within the meaning of California’s Unfair 24 Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. As explained further below, 25 Defendants’ scheme also constitutes unfair and fraudulent conduct under the UCL. 26 27 28 11 Complaint 1 a. Defendants File False Proofs of Service Under Penalty of Perjury 2 59. There is ample evidence that the proofs of service filed in the challenged debt collection 3 actions are deliberately fabricated. ASI filed a proof of service in 36 of the 37 lawsuits it brought 4 between October 21, 2019 and March 12, 2020 in San Francisco Superior Court. These proofs of 5 service are, when examined collectively, improbably similar and facially indicative of fraud. 6 60. Every one of the 36 proofs of service filed in ASI’s San Francisco Superior Court debt 7 collection lawsuits: 8 • Is signed by a “registered California process server” named “James Crawford” with a listed 9 Los Angeles County process server registration number of 3935. This process server 10 registration number is assigned to Defendant AUAS, and not to “James Crawford.” “James 11 Crawford” signs each of the proofs of service, under penalty of perjury, with an “X”: 12 Working Together for Justice 13 Bay Area Legal Aid 14 15 • Alleges substitute service rather than personal service and names the person served as 16 either “John Doe” or “Jane Doe” and describes them as a “Co-occupant.” 17 • Describes the person served as either a “Male Hispanic” or “Female Hispanic” in their 18 “Late 30’s” or “Late 40’s,” with “Brown Eyes” and either “Black Hair or Brown Hair.” 19 61. Every one of the 36 cases for which ASI filed a proof of service in San Francisco Superior 20 Court resulted in a default judgment against the defendant. No defendant responded to or appeared 21 in any of these actions, other than the case in which BayLegal represented a defendant in a motion 22 to set aside his default judgment. 23 62. A review of ASI’s case filings in Alameda and Santa Clara County 13 shows similarly 24 disturbing indications of fraudulent service. 25 26 13 San Francisco, Alameda, and Santa Clara County are the only Bay Area counties for which 27 BayLegal could review Defendants’ court filings. BayLegal is informed and believes that Defendants engage in these practices throughout the entire state. 28 12 Complaint 1 63. ASI filed 100 lawsuits in Alameda County Superior Court and 79 in Santa Clara Superior 2 Court between October 7, 2019 and May 22, 2020. Each of these cases was on a high interest loan 3 allegedly originated by LoanMe. ASI filed proofs of service in all but six of these cases. As in the 4 San Francisco Superior Court cases: 5 • Each proof of service was signed with an “X” by “James Crawford” using the Los Angeles 6 County process server registration assigned to AUAS. 7 • Each proof of service alleges substitute rather than personal service. 8 • No defendant ever appeared in the lawsuit after allegedly being served. 9 64. Additionally, as in San Francisco, every proof of service ASI filed in Alameda County 10 during this period names the person served as either “John Doe” or “Jane Doe” and describes them 11 as either a “Male Hispanic” or “Female Hispanic” in their “Late 30’s” or “Late 40’s,” with 12 “Brown Eyes” and either “Black Hair” or “Brown Hair.” Working Together for Justice 13 65. ASI’s attestations of proper service are not only extraordinarily improbable, but often Bay Area Legal Aid 14 physically impossible. For example, before 4:00 p.m. on January 25, 2020, “James Crawford” 15 allegedly: 16 • Attempted service at Chinook Ct. in San Francisco at 7:00 am. (SF Sup. Ct. Case No. 17 CGC-19-581292) 18 • Traveled approximately 43 miles (in 31 minutes) to attempt service on Heath St. in 19 Milpitas at 7:31 am. (Santa Clara Sup. Ct. Case No. 19CV360408) 20 • Returned approximately 49 miles (in 5 minutes) to San Francisco to attempt service on 21 Sanches St. at 7:36 am. (SF Sup. Ct. Case No. CGC-19-581315) 22 • Traveled approximately 32 miles (in 20 minutes) to Sleepy Hollow Ln. in Hayward to 23 attempt service at 7:56 am. (Alameda Sup. Ct. Case No. HG19046185) 24 • Returned approximately 30 miles (in 3 minutes) to San Jose to attempt service on 25 Lancelot Ln. at 7:59 am. (Santa Clara Sup. Ct. Case No. 19CV359768) 26 • Traveled approximately 28 miles to Peterman Ln. in Hayward at 9:19 am. (Alameda Sup. 27 Ct. Case No. HG19045774) 28 13 Complaint 1 • Returned approximately 25 miles (in 11 minutes) to Easton Pl. in San Jose to complete 2 substitute service at 9:40 am. (Santa Clara Sup. Ct. Case No. 19CV359046) 3 • Returned approximately 28 miles to Hayward to complete substitute service on Alice St. at 4 10:16 am. (Alameda Sup. Ct. Case No. HG19048071) 5 • Traveled approximately 33 miles back to San Jose to attempt service on Glenrio Dr. at 6 11:12 am. (Santa Clara Sup. Ct. Case No. 19360932) 7 • Traveled approximately 50 miles to Berkeley to attempt service on Otis St. at 3:19 p.m. 8 (Alameda Sup. Ct. Case No. RG19048336) 9 • Traveled approximately 41 miles (in 25 minutes) to Palo Alto to attempt service on 10 Lupine Ave. at 3:44 pm. (Santa Clara Sup. Ct. Case No. 19CV359875) 11 In another example, in less than one hour on the morning of March 15, 2020, “James Crawford” 12 allegedly: Working Together for Justice 13 • Completed substitute service on Palm Valley Blvd. in San Jose at 7:00 am. (Santa Clara Bay Area Legal Aid 14 Sup. Ct. Case No. 20CV362691) 15 • Traveled approximately 19 miles (in 10 minutes) to completed substitute service on Duff 16 Ct. in Sunnyvale at 7:10 am. (Santa Clara Sup. Ct. Case No. 20CV362383) 17 • Simultaneously attempted service, also at 7:10 am, 30 miles away on Harvest Rd. in 18 Pleasanton. (Alameda Sup. Ct. Case No. HG20054569) 19 • Returned 31 miles to Terra Cotta Dr. in San Jose to attempt service at 7:37 am. (Santa 20 Clara Sup. Ct. Case No. 20CV364724) 21 66. On its own, each individual claim of service would appear plausible to a clerk or judge 22 examining it. Even Defendants’ claims of service within each judicial district are perhaps 23 possible. When viewed in totality, however, Defendants’ attestations of service are clearly 24 fraudulent. Further, none of the alleged services resulted in an appearance by any consumer 25 defendant. 26 67. Defendants know that courts rely on proofs of service signed under penalty of perjury. 27 Defendants assume that courts will not cross-reference their allegations of proper service to those 28 14 Complaint 1 in other cases and will certainly not cross-reference their activities in other jurisdictions. Thus, 2 Defendants exploit and manipulate the normal operation of California’s overburdened c