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Bar Buzz: Fraud charges, attorney ethics, and more

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Abdou Diallo, a Canadian man, has been arrested and charged with conspiracy and wire fraud due to his role in a $300 million telemarketing fraud scheme. The scheme was allegedly carried out by Readers Services and NP Readers, Inc., both Canadian-based companies. From 2011 to 2020, Diallo and co-conspirators targeted elderly and vulnerable people and tricked them into signing up for multiple expensive magazine subscriptions that they could not afford and did not want, according to charges. After the unwilling customers called back trying to unsubscribe, Diallo and his associates allegedly posed as members of the “magazine cancellation department,” offering to settle outstanding debt through a large, one-time payment. The victims did not owe any money, but Diallo and co-conspirators ultimately defrauded more than 20,000 people across the United States, the charges say. Diallo was arrested in Miami on March 30, 2022, and will be transported to the District of Minnesota for further court proceedings.

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The emblem of the U.S. Equal Employment Opportunity Commission

AP file photo

The Equal Employment Opportunity Commission has sued North Memorial Health for alleged disability discrimination against a deaf applicant. In July 2020, an individual applied for the position of greeter at the health care provider. The EEOC claims that the applicant was qualified and could perform the essential functions of the job, but was not hired because of her disability. The greeter position’s duties included communicating about COVID-19 masking standards, providing directions, and keeping the area tidy. “Unfortunately, when deaf people apply for jobs, some still encounter discrimination. Some employers erroneously believe that they cannot perform the job because of their disability or discriminate against them based on myths, fears, and stereotypes,” said Gregory Gochanour, regional attorney for EEOC’s Chicago District. North Memorial Health is a health care provider that operates throughout the Twin Cities metropolitan area.

A Wells Fargo office

AP file photo

Settlements 

After a lawsuit, Wells Fargo & Co. has agreed to pay $32.5 million to workers who say the banking organization favored its own funds over better performing alternatives to the detriment of their 401(k) funds. More than 400,000 people invested in Wells Fargo target date funds through the company’s 401(k) plan. These target date collective investment trusts in the company’s 401(k) plan were default options for participants who did not personally select investments. Wells Fargo then transferred plan assets to these trusts in 2016, despite the fact that the trusts were new and had no prior performance history. The settlement amount is just about 40% of the damages estimated by plan participants.

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Ed Napleton Automotive has agreed to a $10 million settlement with the Federal Trade Commission and Illinois Attorney General’s Office for adding illegal fees and charging African American customers more for financing when they were purchasing vehicles. Customers were allegedly charged, without informed consent, hundreds or thousands of dollars for add-ons such as paint protection. African American customers were charged roughly $190 more in financing interest charges than white customers were. Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said, “Especially as families struggle with rising car prices, dealerships that cheat their customers can expect to hear from us.” Napleton spokesman Tilden Katz says that the company denies any wrongdoing: “We made this decision [to settle] to avoid the disruption of an ongoing dispute with the government.” Napleton operates 51 dealerships in eight states, including Minnesota: Mercedes-Benz of Rochester, Lexus of Maplewood, and Lexus of Wayzata. The settlement will require Napleton to establish a fair lending program, requires dealerships to charge consumers for add-ons or services with their express, informed consent, and prohibits them from misrepresenting terms or cost of financing a vehicle.

Erick Kaardal and Judge James Boasberg

Erick Kaardal (left) and Judge James Boasberg

Denied

Minnesota attorney Erick Kaardal has lost his bid to block an attorney ethics inquiry ordered by a federal judge following a “baseless” lawsuit regarding the 2020 election. Kaardal is a litigator at Mohrman, Kaardal, & Erickson. He was counsel to the Wisconsin Voters Alliance, which sued former Vice President Mike Pence to stop him from counting electoral votes and to contest the election results. Responding to that lawsuit, United States District Judge James Boasberg wrote: “[T]he relief requested in this lawsuit is staggering: to invalidate the election and prevent the electoral votes from being counted. When any counsel seeks to target processes at the heart of our democracy, the Committee may well conclude that they are required to act with far more diligence and good faith than existed here.” Judge Boasberg then referred Kaardal to the Committee on Grievances. Ketanji Brown Jackson was on the panel when it heard the case in December 2021, but she did not participate in the opinion. At the time, Judge Boasberg did not suggest whether Kaardal should be disciplined.

Law School Excellence

Mitchell Hamline student Nicole van Lierop has been named one of 10 “Law Students of the Year” by National Jurist magazine. Each law school is invited to nominate one student for this honor. During the height of the pandemic, van Lierop cared for veterans with COVID-19 as a frontline nurse and attended law school classes online during the day. She left her nursing job last fall and will become a health law attorney.

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Kendra Saathoff, a third-year law student at the University of Minnesota Law School has helped draft legislation to reduce sentences of abuse, sexual assault, and trafficking victims who commit crimes because of their own abuse. The bill (HF 3856), sponsored by Rep. Athena Hollins, DFL-St. Paul, would impose shorter sentences for the offenses that abuse victims commit or enable those previously convicted to petition for a resentencing. Saathoff testified in favor of the bill in front of the Public Safety and Criminal Justice Reform Finance and Police Committee on March 8, 2022. The bill has been re-referred to the Judiciary Finance and Civil Law Committee.

New Leadership

Andrew Luger

Andrew Luger

On March 23, 2022, Andrew Luger took the oath of office to become the U.S. Attorney for the District of Minnesota. He was tapped for the role by President Joe Biden in November 2021 and confirmed by the U.S. Senate on March 23, 2022. He had previously held the post during the Obama administration. “I am honored to lead this office and once again serve the people of Minnesota as their United States Attorney. I look forward to working with these talented public servants who are committed to public safety and the pursuit of justice,” Luger remarked. Luger will oversee 115 employees. Luger was also appointed by Attorney General Merrick B. Garland to serve on the Attorney General’s Advisory Committee, which advises the Attorney General on matters of policy, procedure, and management impacting the Offices of the U.S. Attorneys.


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