Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—M.D. Fla.: Asset freeze in FTC suit against Florida attorney stands, (Dec 23, 2015)

By Jeffrey May, J.D.

A Florida lawyer who operates Lanier Law, LLC has been unable to convince the federal district court in Jacksonville, Florida, to vacate an asset freeze imposed in an FTC enforcement action over his alleged role in a fraudulent mortgage relief scheme. Michael W. Lanier unsuccessfully contended that the asset freeze was overbroad because the FTC has failed to present any reasonable approximation of his allegedly ill-gotten gains or establish the period of time during which Lanier was allegedly engaged in the improper conduct (FTC v. Lanier Law, LLC, December 22, 2015, Howard, M.).

The court concluded that the asset freeze was appropriate under the law. According to the FTC's 2014 complaint, Lanier engaged in the deceptive acts and practices in the provision of mortgage assistance relief services through Lanier Law and other entities since 2011. The FTC alleges that the conduct violated the FTC Act, the Telemarketing Sales Rule, and the Mortgage Assistance Relief Services Rule. The agency is seeking disgorgement of ill-gotten monies and injunctive relief. A preliminary injunction with asset freeze was issued in February 2015.

The court noted that it has the power to impose an asset freeze in order to make the requested relief possible. The asset freeze was necessary because the defendant's potential liability for the conduct of the alleged scheme was in the millions and far outweighed the frozen assets totaling less than $176,000. Assets acquired by the defendant prior to the allegedly improper conduct did not have to be excluded from the asset freeze because the frozen assets did not have to be traceable to the fraudulent activity underlying the lawsuit, the court explained.

Given the “vast disparity” between Lanier’s potential liability and the amount of the frozen assets, the court refused to exercise its discretion to unfreeze a portion of the defendant's assets so that he might obtain experienced legal counsel. Attorney fees would likely consume a significant portion, if not all, of the remaining assets. “Having found that the FTC is substantially likely to prevail against Lanier on the merits, the Court has a duty to ensure that Lanier’s assets are available to make restitution to the injured customers,” the court explained. Lastly, the court pointed to an unaccounted-for withdrawal of $100,000 from the Lanier Law bank account as a further reason for letting the asset freeze stand.

The case is No. 3:14-cv-00786-MMH-PDB.

Attorneys: Harold E. Kirtz for the FTC. Michael Winston Lanier (Michael W. Lanier, PA) for Lanier Law, LLC. Catherine Faughnan (Law Office of Catherine R. Faughnan) for Surety Law Group, LLP. Brandon A. Stanko (Law Office of Brandon A. Stanko, LLC) for Fortress Law Group, PC.

Companies: Lanier Law, LLC

Cases: ConsumerProtection FederalTradeCommissionNews FloridaNews