Friedman & Wexler, a collection law firm in Chicago that ceased doing business in July, has been ordered by a Cook County (Ill.) judge to pay a $23.7 million judgment to the state of Illinois.
The law firm oversaw delinquent student loan collections for the state between 1994 and mid-2006. The Illinois Student Assistance Commission (ISAC) filed a lawsuit against the firm in 2006, accusing it of improperly pocketing commissions and shorting the state on money owed.
Attorneys Mitchell and Norman Wexler, and the firm, have been named as defendants in other recent court actions this year. In April, HSBC Finance Corp. sued the firm for more than $400,000 in funds intended to be held in trust for the bank - but were missing, see story. The case has not been settled.
In the ISAC case, Friedman & Wexler had collected nearly $800,000 after the the ISAC chose not to renew the student loan contract in June 2006, according to Collections & Credit Risk. The firm refused to surrender the money, the suit states.
The firm previously filed its own claims against the state, saying it was owed $13 million for work it already did on cases and $1.5 million in fees to transfer the files back to ISAC.
It's unclear whether the state will be able to collect the $23.7 million judgment. Both Mitchell Wexler and Norman Wexler have filed for bankruptcy, and their firm no longer has a working telephone number.