By IBTimes Reporter | January 6, 2011 10:59 AM EST
A federal judge in New York has okayed a class action lawsuit that accuses Leucadia National Corp., a financial services firm, the debt-collection law firm Mel S. Harris & Associates, and a Brooklyn-based process serving agency Samserv Inc., of a racketeering scheme that allowed them to fraudulently secure default judgments in New York courts against unwitting consumers around the country.
In a ruling issued Dec. 29, U.S. District Judge Denny Chin said the plaintiffs can go ahead with claims that they were the victims of a 'sewer service' scheme allegedly perpetrated by Leucadia and Mel Harris.
The so-called 'sewer service' refers to a practice of throwing debt-collection and other service papers in the sewers near the home of debtors and obtaining a default judgment from the court by filing a phony affidavit attesting to service.
The lawsuit, filed on behalf of up to 100,000 borrowers, claims Leucadia purchased 'portfolios' of defaulted debts for pennies on the dollar and then attempted to collect the full face value of the debts for themselves.
Read the rest of the story:
Federal judge allows class action lawsuit against law firm accused of 'sewer service'