The BCBSM Stone Wall

A law firm that assists clients with public benefits applications frequently runs into boneheaded bureaucrats who consider it their mission to make it as difficult as possible for anyone outside the organization to receive the services they are due. Usually, a supervisor or a representative at a different office or branch can be found who will be more cooperative. Seldom does the law firm find itself trying to transact business with an entire organization of obstinate, discourteous boneheads. Blue Cross Blue Shield of Michigan (BCBSM) is such an organization.

Trying to procure a paper premium statement can take weeks if the insured person is not able to call BCBSM, hang on the line for 30 minutes or more, and explain what is wanted. When the insured is represented by an agent under a durable power of attorney, a retained attorney, or the spouse who pays the premiums, getting a paper premium statement usually involves a lengthy telephone campaign to get permission to mail or fax the power of attorney. Then it is necessary to wait for days for some sort of response.

Bear in mind that the information sought is not confidential medical records covered by HIPAA. It is just a paper premium statement that could be sent to the insured in the normal course of business.

Recently, a client told us that she had been trying for weeks to get a premium statement from BCBSM. She was told that a company release of information would be sent to her. It never came.

Because of past experience, I directed my request for a premium statement to Jeffrey Rumley, General Counsel of BCBSM. I attached the power of attorney signed by the insured appointing his agent. I also attached the release of information and appointment of representative giving me the right to request information and represent the insured. That document was signed by the agent. Nearly every bank, insurance company, real estate agent, brokerage firm, and government agency with which my office deals would honor a request backed up with a power of attorney and release of information. Not BCBSM!

Two days after emailing Mr. Rumley, my office received a call from a BCBSM representative. She stated that BCBSM does not recognize any power of attorney drawn up by an attorney — which is asinine. She stated that to get any information, the insured, who is in a nursing home and incapacitated, must sign a request on BCBSM’s form.

Furthermore, she stated that BCBSM would not fax the form, it would have to be mailed. There was no explanation of why they could not fax the form to my office, despite the fact that it would have no personal information of the insured – or anyone else – on it.

After a second emailed letter to Mr. Rumley, an assistant general counsel finally provided a link to procure the form for an agent under a power of attorney and a dizzying array of similar forms. The forms are, and have been, available to anyone with online access. Why the BCBSM representative was so coy is a mystery.

For BCBSM, which recently inflicted double-digit premium increases on its customers, to make it so difficult for people in nursing homes to get information needed to apply for Medicaid is appalling. There are thousands of BCBSM insureds receiving long-term care. There is no excuse for making it an excruciating ordeal to get premium verification for Department of Health and Human Services. Instead of erecting a bureaucratic brick wall, it should be possible to request that verification be sent to the Medicaid agency with a telephone call:

BCBSM: How may I help you?

Caller: I am applying for Medicaid for my mother, Suzanne Sugerbaker, and I would like insurance coverage and premium verification to give the worker.

BCBSM: We can send that directly to the Medicaid agency if you give me Suzanne’s Blue Cross member number and the case number assigned by Medicaid or her Social Security Number.

Caller: Suzanne’s Blue Cross member number is IDK313250075. Her Medicaid number is 8182850205.

BCBSM: Thanks, I’m sending the information right now.

This should not be difficult. If Google knows that I went to Wendy’s at noon and ate a Double-Double Baconater, then went to Walgreen’s at 2:24 p.m. and bought Nexium, how hard could it be for an IT juggernaut like BCBSM to verify a member’s premium and coverage to a government agency through a data link? I’ll bet that BCBSM already keeps track of how many Baconaters I eat.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

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Nursing-Home Residents Have Rights – Protect Them!

Ina Jaffe, in “As Nursing Homes Evict Patients, States Question Motives,” NPR, May 26, 2017, uncovers a dirty little secret of the long-term care industry. Many managers in that business are willing to abuse residents and break laws to maximize profits.

Maryland is suing Neiswanger Management Services, or NMS Healthcare, for flagrant and massive Medicare and Medicaid fraud. The suit alleges that the nursing home company charged the state for services it didn’t deliver, specifically for discharge planning. Nursing homes are legally required to ensure that a discharged resident is transferred to a safe placement where he or she will receive necessary care. But the Maryland Attorney General says that NMS absorbed patients’ lucrative Medicare rehabilitation days then sent residents with complex medical needs to homeless shelters or to shabby rooming houses that they knew would abuse the residents and fleece them for their Social Security. The room-and-board homes where the patients were dumped additionally charged Medicaid exorbitant per diem rates. Many skilled nursing facilities try to maximize profits by squeezing patients out when their Medicare benefits are exhausted, but NMS managers and their accomplices lowered the bar to the level of organized crime.

Medicare pays skilled-care facilities about three times as much per day for rehabilitation as Medicaid does for nursing care. A well-run nursing home can make money on Medicaid long-term care residents, but not nearly as much as they rake in for Medicare patients.

We have seen the result in the banking industry when management shreds the rule book and requires staff to pursue profit without regard to any ethical, or even legal, standard. Wells Fargo put such extreme pressure on staff to open new accounts that representatives steamrolled customers into opening unnecessary accounts and resorted to fraud when the customers resisted. They would hoodwink customers into executing blank signature cards, then use the cards to open unwanted accounts. The sole objective was to open as many accounts as possible. Many Wells Fargo customers had their credit ruined and their financial security compromised by having multiple bank and credit-card accounts opened without their knowledge or consent.

When that rapacious management style is adopted by a nursing-home operator, the results can be even more appalling. NMS, a five-facility rehabilitation and long-term care chain in Maryland, is being sued by the state’s attorney-general for flagrant disregard of Medicare and Medicaid regulations and resident safety in its involuntary discharge policies. When the rehabilitation bed occupancy was at or near capacity, the discharge coordinators would resort to kidnapping to get the patients out on the 101st day, the point at which skilled-care benefits are exhausted. They would traffick the unfortunate victim out of town to the sleazy owner of a shabby tenement lacking in care staff and medication. Worse yet, many patients were dumped at homeless shelters, hospital emergency rooms, relative’s addresses, or even on the street. The AG’s complaint is a Dickensian catalogue of horrors.

It is difficult to find a principle or proposition that most people agree on. Vaccination is even a source of controversy. The one thing that nearly everyone over 65 will vehemently oppose is being placed in a nursing home. Baby Boomers and older folks are 99 & 44/100% likely to prefer vegetating at home in their own filth over going to a <shudder> nursing home. Despite that, according to the federal government, the most common complaint against nursing home operators is not bad food, lack of staff, poor care or abuse by staff or other residents. It is eviction – involuntary discharge.

As much as they hate going to a nursing home, most residents – particularly those with dementia – become accustomed to the routine and begin to trust the staff after a month or two. Call it Stockholm Syndrome, but the prospect of being moved can be more stressful than the prospect of remaining in place. A change in location and caregivers can cause significant deterioration for a resident with dementia. Even those who are not mentally compromised suffer ill effects when moved without proper planning and social services. That is why an abrupt discharge on day 101, with no warning, is oppressive without regard to the placement. NMS did not just ignore the proper procedures for discharge, they carted the patients off to unfamiliar and unsafe surroundings and delivered them to scoundrels.

The legal restrictions and requirements of involuntary discharge are described in “Nursing Home Evictions.” A nursing-home resident has rights that can be enforced, with the assistance of an elder law attorney. Many rehabilitation, or skilled-care facilities that also have long-term care beds prefer to keep their beds filled with Medicare rehabilitation patients, not Medicaid long-term care residents. They will tell the patients’ families that they must move the patient at the end of rehabilitation because “they do not have an available Medicaid bed.” That is often a bluff to get the patient out so they can offer the bed to a more profitable Medicare rehabilitation patient. When the family has an attorney running interference on behalf of the patient the facility nearly always “finds” an available Medicaid bed at the last minute.

It is a pity that so many of NMS’s victims had no one to protect their rights. It is no less than criminal that the authorities ignored NMS’s abuse of vulnerable and elderly adults for years.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

Michigan Designated Funeral Representative

A new law, 2016 Publ. Act 57, effective June 27, 2016, authorizes a person identified as the declarant, to designate a funeral representative to make decisions about postmortem funeral arrangements and the handling, cremation, disposition, or disinterment of the declarant’s body. MCLA 700.3206(2)(a).  The Act includes authority for cremation and determination of the right to possess the cremains, which is an important change. Under prior law, all persons with equal priority as next of kin had to approve cremation.

The Act revises the priority of persons who may decide on final arrangements and inserts a “designated funeral representative” ahead of spouses, family members and others. MCLA 700.3206(3). The only authority with higher priority is a person designated to direct the disposition of a service member’s remains under federal law or Department of Defense regulation, when the decedent was a service member at the time of death. Id

Historic reenactor Les Scott, dressed as the town mortician at the door of his funeral parlor at South Park City Museum, a collection of historic buildings in Fairplay, Colorado

 

A funeral representative designation may be included in another estate-planning document, such as a will or designation of patient advocate, but it must be executed with two witnesses or be notarized. MCLA 700.3206(2)(b). Like a designation of patient advocate, a funeral representative designation may not appoint or be witnessed by a person associated with a declarant’s medical provider, and persons associated with a funeral establishment, cemetery, or crematory that would provide services for the declarant are also excluded. MCLA 700.3206(2)(c).

A funeral representative designation may be revoked by the declarant, or by the representative’s resignation, absence despite reasonable efforts to locate, or refusal act within 48 hours of receiving notice of the decedent’s death. Revocation by the declarant must be in writing and signed with the formalities of the original designation. MCLA 700.3206b.

The declarant may appoint a contingent representative. MCLA 700.3206a(1). The represtentative accepts the appointment by signing an acceptance or by acting as the funeral representative. MCLA 700.3206a(2).

Circumstances that would bar an individual from inheriting from the declarant, such as divorce or annulment of marriage to the declarant, desertion disqualify the individual. MCLA 700.2801(2).  Being convicted of abuse or killing of the declarant, disqualifies the individual, MCLA 700.2802(2)(c), and being charged with the abuse or killing of the declarante bars the individual from acting as the designated funeral representative while the charges are pending. MCLA 700.3206(12).

A major concern for an individual nominated to act as designated funeral representative is personal liability for the declarant’s final arrangements. Unless he or she is a special fiduciary, the medical examiner, or the director of corrections in the case of a prisoner, a person who acts as designated funeral representative is personally liable for the costs of disposition to the extent that payment is not covered under a trust, prepaid funeral contract, or other “effective and binding means.” MCLA 700.3206(13). This is alarming because the statute includes no requirement for the funeral director or other provider of funeral or burial services to advise the nominated funeral representative that if he or she accepts the appointment and makes the necessary dispositions that there could be personal liability. The representative is not even required to sign an acceptance of appointment, if he or she accepts by performance.

Adapted with editorial changes from John B. Payne, “Michigan Probate, 2016-17 ed.,” Chapter 13, 125-27 (Thomson Reuters 2016).

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

Do Not Put Premium Gas in your Chevy Sonic

The American Automobile Association (AAA) recently studied gas-buying behavior of U.S. motorists, finding that more than 7% of us (16 million out of approximately 210 million) use premium gas when our cars don’t need it. It has been known for decades that putting premium gas (90+ octane) in cars designed for regular (87+ octane) has no effect on performance, gas mileage, or engine life. Buying premium for a car that doesn’t need it is a serious waste of money, but at the same time motorists save only a few cents per gallon when they do not buy Top Tier gas, which does affect all of the above measures.

It’s tough to be a consumer. From the 19th Century, when quacks sold 100-proof panaceas from medicine wagons, to today, when Big Pharma spends billions convincing us to tell our doctors what prescriptions we need, we have been lied to about everything from drain cleaners to laxatives; from infant formula to hospice services. However, there are two relatively constant rules to guide us: TANSTAAFL (There ain’t no such thing as a free lunch) and PIQ (Price indicates quality).

Merchants do not give away their products. In the Good Ol’ Days, bars offered free lunches to patrons. This was not altruism, but opportunism. Bars made their money selling alcoholic drinks; the lunches were a come-on. Casinos give free drinks to gamblers for the same reason.

There is a fairly close correlation between price and quality. As between two similar products, if Acme’s product sells for a higher price than Excelsior’s, the fact that many consumers see Acme’s product as of superior reliability, appearance, or value retention, indicates that the product probably is of objectively higher value.

The 2014 Chevrolet Sonic RS sedan joins the Sonic line-up in Spring 2014 at a starting MSRP of $19,705. The performance-inspired Sonic RS sedan (left) offers customers the same youthful styling and sporty performance packaging as the hatchback (right).

These principles break down when it comes to gasoline grades. “Premium” gas is not better gas. It has a different application. “Regular” gas is as good as premium when used in a car designed to run on lower octane fuel. Part of the problem may be that higher-octane gas is called premium when it is not qualitatively better than regular. If the manufacturer does not specify a higher octane, there is no benefit to spending the extra money for premium, according to John Nielsen, AAA’s managing director of Automotive Engineering and Repair.

Filling up with premium instead of regular can be quite expensive. While the price differential used to be 10 – 15%, in some regions it can be close to 50%. When it comes to gasoline, ‘premium’ does not mean ‘better’ if your vehicle doesn’t require it,” continued Nielsen. “Drivers looking to upgrade to a higher quality fuel for their vehicle should save their money and select a TOP TIER™ gasoline, not a higher-octane one.” Erin Stepp, “U.S. Drivers Waste $2.1 Billion Annually on Premium Gasoline” (AAA NewsroomSeptember 20, 2016),”

Top Tier retailers include 76, Aloha Petroleum, Amoco, ARCO, Beacon, BP, Break Time, Cenex, Chevron, CITGO, Conoco, Co-op, Costco, CountryMark, Diamond Shamrock, Entec, Esso, Express, Exxon, Holiday, Kwik Star Stores, Kwik Trip, Mahalo, MFA, Mobil, Ohana Fuels, Petro-Canada, Phillips 66, PUMA, QT, Quik Trip, Road Ranger, Shamrock, Shell / Shell V-Power, Sinclair Standard, SuperAmerica, SuperFuels, Tempo, Texaco, Tri-Par, and Valero. Jeff Bartlett, “Study Shows Top Tier Gasoline Worth the Extra Price.”  The latest roster of Top Tier brands may be found on the Top Tier website.

It makes sense to pay a nickel a gallon more for Top Tier gasoline, which protects the engine better than a non-Top Tier product. However, paying a large price differential for premium for a car does not need it is a huge waste.

There is a caveat concerning Top Tier gasoline. According to the Top Tier website, the product is endorsed by eight major auto manufacturers as increasing engine life, gas mileage and performance. This may all be true, but the consumer never really knows.  They could also claim that Top Tier gas reduces the risk of stroke or heart disease and cures hypertension and an ordinary motorist could not prove them wrong.  Still, the relatively small price differential makes the risk that it is just a marketing gimmick acceptable.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2016 John B. Payne, Attorney

The Prescription You Do Not Need

Among the clues that one is no longer young can be proliferation of prescription drugs in the medicine cabinet. In this age of miracle drugs you do not even have to be “older” to be taking a regimen of four, five, or more prescriptions, daily. Aggravating this tendency for Americans to take more and more prescriptions is the fact that there is no central registry of an individual’s prescriptions, so doctors are often unaware of all the drugs a patient is taking.

Once, while volunteering as a drug crisis counselor in the ‘70s, I was called to the home of a factory worker. This was unusual because most of our calls were for overdoses of psychedelics or “downers” by students and those who tuned in, turned on and dropped out.

The man was sitting at his dining room table staring out at his back yard, catatonic. He had been seeing a large number of psychiatrists, who all gave him prescriptions for strong mood-altering drugs. His wife showed us a large toiletry bag holding dozens of psychotropic prescriptions. It was no wonder he was in the o-zone.

In 40 years there has been little progress toward protecting patients from conflicting treatment plans from different doctors or unnecessary prescriptions by scrip mills. Pill freaks can still go from doctor to doctor collecting drug prescriptions at every stop. Now they are even armed with all the brand names of the pills they probably do not need because television is polluted with Big Pharma ads, as documented today by Bloom County.

I recently learned of another aggravating factor in the drug tsunami pouring over our country – drug “protocols.” A client who takes two prescription drugs recently picked up her prescriptions and found a third in the bag, a generic for Prilosec. Surprised, she looked it up on drugs.com and learned that it is a proton pump inhibitor (PPI). She told me, “I did not know that my proton pump needed inhibition. I always thought my lack of inhibition was part of my charm.”

Reading further, she learned that PPIs are used to treat heartburn and acid reflux. She had never had a problem with her GI tract and eats highly spiced, exotic foods with gustoand no ill effects.

Prilosec was recently found to be associated with an increased risk of dementia. In addition to the dementia risk, there was a respectable catalog of dire side-effects, such as diarrhea, muscle pain or spasms, heart-rate abnormalities, and seizures. Finally, since PPIs suppress production of stomach acid, the body tries to compensate for the increased pH in the gastro-intestinal tract after a period of PPI use by producing more stomach acid. This requires ever-higher doses or a more powerful PPI.

Now both curious and alarmed, she called the office of the doctor who prescribed the PPI to ask why. The nurse checked with the doctor, who told her he prescribed the PPI because it is listed in a drug “protocol” for her condition, which had nothing to do with the GI tract. In response to her expression of concern that she was being prescribed medication for symptoms she did not have, the nurse assured her that “everyone” takes PPIs. The nurse, herself, takes Prilosec, but will be graduating soon to a more powerful medication for acid reflux because Prilosec is losing its effectiveness for her (Remember about the body’s response to prolonged use of PPIs?).

Writing a prescription based on a drug “protocol” is like prescribing for a real patient from a hypothetical medical record. This raises concerns on many fronts.

First, if the patient does not have the condition the drug is intended to treat, the doctor is introducing unnecessary interactions with other drugs. Even if the doctor knows all the prescriptions the patient is using, he or she is not with the patient on a daily basis and will not know about over-the-counter drugs and supplements the patient may be consuming or lifestyle circumstances and diet that may affect how the drug is tolerated. A real patient is likely to differ in important ways from the hypothetical patient on which the protocol is based.

Secondly, prescribing from a protocol will lead to an upward spiral in the number of prescriptions doctors write. A drug protocol created by, or with the connivance of, the pharmaceutical industry will include every possible application for every drug, but will not catalog contraindicated products. As a consequence, the list of suggested pharmaceuticals for a given diagnosis will expand over time, but never contract.

Finally, many patients will take whatever prescriptions a doctor gives them. They may not realize that a prescription is treatment for symptoms or conditions they do not have. An unnecessary drug may become a regular part of the patient’s drug regime and the side effects of that unnecessary drug may require still more prescriptions to treat those side effects. Patients in assisted living facilities and nursing homes are especially prone to take pills they do not need. They are handed their medication and take it without question.

One resident in an assisted-living facility was taking over $500.00 per month in medication and was almost totally unresponsive. When the family had a money problem and couldn’t pay for the prescriptions, they stopped giving them to her. She soon perked up and started asking about her grandchildren. She had been chemically restrained to make her more tractable.

Our consumption of pharmaceutical products is out of hand. Automatic inclusion of additional substances based on a hypothetical model of a patient’s diagnosis would be one more aggravating factor. Physicians need to prescribe treatments based solely on analysis of the specific patient’s symptoms and conditions and patients need to be more inquisitive about the prescriptions they are being given. Further, any patient who is taking more than three prescriptions should have a periodic review by an independent pharmacist or different doctor to analyze the drug interactions going on.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2016 John B. Payne, Attorney

If Microsoft Made Cars

Upgrading a computer to Windows 8 or Office 2013 is like swapping the driver’s seat in your car for one of those goofy kneeling posture chairs.  You can do it, but why in Hell would you want to?  Unfortunately, to function in the real world you have to be able to run programs that are compatible with updated Windows and Office.  Therefore, Microsoft gets to impose such asinine “improvements” as ribbons instead of drop-down menus and tiles instead of a “Start” list on the computer-buying public.

Reasonably intelligent computer users can adapt to the new programs, but why should we have to?  The former versions of Windows and Office were functional and relatively easy to navigate.  If greater functionality was necessary, why was it necessary to change the user interface and make users learn whole new ways of working on their computers?  Instead of selling customers what they want, Microsoft dictates to its customers what they may have.  This suggests the question of what would a car look like if Microsoft had the kind of monopoly on automobiles it has on PC operating systems.

Car makers make incremental styling and mechanical changes and respond to customer preferences.  Customers who do not like what the new Fords look like or how they perform will transfer their loyalty to a competing brand.

Computer buyers must take the operating system and office software that Microsoft gives them.  If they do not want to upgrade, too bad.  In a few years tried and true software solutions stop working on new machines, and new software is not compatible with older hardware.  Office 2010 was a slap in the face to the computing public.  Microsoft decided to create a new suite of business programs outputting documents that cannot even be opened under the prior versions. That is like Trojan creating a new line of products that require a surgical upgrade — and having the market power to force men to get the operation.

If Microsoft had control of the automotive industry, cars would no longer have transparent windows.  There would be a 360̊ camera on top of the car feeding into panoramic LCD “Windows™” lining the inside of the car.  There would be no steering wheel or other mechanical controls, the car would be “driven” by touching a destination on a projected map or by negotiating through a virtual universe like Google “Street View.”

Cars would be totally safe because there would be radar and sonar sensors all around the car that would prevent collisions with other vehicles or stationary objects.  Unfortunately, though, for the first couple of years after new models are introduced, they would tend to crash all the time.

Styling would be abandoned.  Why would a car owner care about the car’s appearance?  When using the vehicle it would be impossible to see what it looks like from the outside and occupants of other vehicles would not see it, either.  They would choose a theme and wallpaper.  From the perspective of anyone inside a vehicle, it could be cruising through a coral reef, a verdant jungle, or a solar system.  Other vehicles might look like Roman chariots, battleships, or kids on skateboards.

Might this be more fun than really driving a car?  Some people would think so.  However, a Microsoft car would only last five years and every fifteen minutes it would have to be parked so it could update itself.

I prefer to view the real world through conventional safety-glass windows and be in physical control of my car.  More than that, though, I would rather choose the type of car I buy than be required to accept whatever the auto monopoly decides to build.  Let us hope that Microsoft never takes control of the auto industry, or, even worse, food or health care.  Let’s also hope Verizon doesn’t, either.  Then a new car would only cost $49, but the service plan would kill your budget.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

 

©2013 John B. Payne, Attorney

 

 

Debtor and Attorney Burned in Asset Protection Scheme

This blog recently touched on the problems presented by asset protection promoters. Jay Adkisson describes a case where an attempt to move assets into offshore trusts blew up in the debtor’s face. Debtor and Attorney Burned. The debtor’s attorney was also burned.

The indictment breeze is blowing for Peter G. Rogan and his attorney, Frederick M. Cuppy, in the Windy City. Chicago-area U.S. Attorney, Patrick Fitzgerald–yes, the pit bull in sharkskin who persecuted the Clinton administration–lambasted Rogan and Cuppy in a 29-page indictment which can be found here.

Fitzgerald seems to have turned his attention to some actual malefactors, for a change. Rogan allegedly tried to duck a $55 million-plus Medicare fraud judgment by siphoning cash into offshore trusts for his children. Cuppy is accused of being his eager accomplice. It seems likely that both will spend substantial periods of time in federal prison.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

 

©2011 John B. Payne, Attorney

 

 

Alaska Trust Fails to Protect Assets

Jay Adkisson, blogging for Forbes, today describes a bankruptcy case illustrating one of the points in my column yesterday on the ineffectiveness of most asset-protection gimmicks, “Do Not Get Suckered by the Asset Protection Racket.” His column, “Mortensen: Alaska Asset Protection Trust Funded By Solvent Settlor Completely Fails To Protect Assets In Bankruptcy Against Future Creditors,” http://goo.gl/9SPZt, demonstrates why foreign and domestic asset protection trusts are often ineffective at defending against creditors. The case, Battley v. Mortensen, Adv. D.Alaska, No. A09-90036-DMD, May 26, 2011, permitted the invasion of the corpus of an Alaska asset protection trust for the benefit of creditors.

In 2005, Thomas Mortensen put assets into a trust that was advertised to protect against creditors. Shortly after he funded the trust, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which established a 10-year clawback rule for self-settled asset protection trusts. It was this 10-year clawback rule that the court was interpreting.

The bankruptcy court held that the bankruptcy trustee could claim the trust corpus since Mortensen funded the trust less than 10 years earlier, intending it as a barrier to protect his assets from the claims of creditors. As Mortensen learned to his chagrin, bankruptcy judges are better at defeating asset protection than creditors are at creating them.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

 

©2011 John B. Payne, Attorney

 

 

Résumé Risks

Subscribers to listservs and less formal email broadcasts receive many emails with attachments. Most email users know that attachments from other email accounts can contain viruses, worms, Trojan horses, pictures of kids or kittens, and various other malware. However, few realize how hazardous it is to send files out. Today a résumé came in an email that went to about 100 addressees. The sender was trying to help a colleague or friend find a job, but sending a résumé out in an e-blast is extremely dangerous for the subject of the résumé. There is a lot of personal information that could be used to steal the person’s identity. The résumé that came today included a home address and telephone number, dates of attendance at a school, and a detailed employment history. Even a person with rudimentary research skills would be able to dig up such vital information such as the exact birth date and place, mother’s birth name, and at least a partial Social Security number.

Sending a file to 100 email addresses is about as bad as sending it to a million. The way email users accidentally hit and send email to the wrong recipients, any given email could find its way to a scammer in Somalia as easily as to a hiring agent in Hammond. It is much safer to describe the person in the body of an email and ask for potential employers to contact the candidate or you. Another alternative would be a redacted resume, although attaching a redacted resume is still dangerous. Who knows what metadata might be attached to the file?

Metadata is data that describes other data. For any given file this can include authorship, date of creation and modification. Even earlier drafts, showing what was redacted, may often be extracted and read. If a résumé is redacted, but the file is forwarded to a recipient without being properly stripped of metadata, it is likely that the recipient can recover all of the redacted data — and more. It may save time to adapt a document for one client or customer to create a document for a different client, but if the new document is sent as an electronic file, there may be a serious breach of confidentiality.

For document safety, always start with a new document. If you are copying a portion of another document, use . That should avoid importing most of the metadata attached to the pasted text. Before sending a Word 2010 document, go to and strip the information that should not be shared.

I suggest sending out as few attachments as possible, particularly when the same information could be put in the body of the email. Any document that you attach to an email could have attached metadata that would compromise your security or that of your company. Unless you have a stringent protocol to strip metadata from emailed files, you have a serious security lapse. This should be unacceptable for anyone who handles confidential files.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

 

©2011 John B. Payne, Attorney

 

 

First State Attorneys – No Way

This evening I had a truly bizarre experience. Once again I found that no matter how high you set the bar on imbecilic criminality, somebody will come along and set a new record. A client called, all upset, because “First State Attorneys,” supposedly a California law firm, was threatening to have her arrested over a payday lender account. She said that they had called her 34 times that day and were threatening to have her “taken downtown for an investigation.” They wanted her to pay them $200 by credit card immediately, or she would be sued for $9,000. They even told her that she should arrange to have her children taken care of when she gets taken in for questioning.

When my client and I called this gang of thieves back, the “head collector” told us that there would be no more calls to my client. However, 10 minutes later, they were calling again. They told my client that they did not believe that I am a lawyer. The only funny part of the whole thing is that they all sounded like Apu Nahasapeemapetilon, the Indian shopkeeper in the Simpsons, but gave their names as Dexter Brown, Brian Davis, Tom Nelson, Lloyd Davis and Alex Jones.

After a little inquiry, I found out that “First State Attorneys” is neither a law firm nor in California. They are scammers, probably on the Indian subcontinent.

I am astounded at how outrageous these swindlers are. They do not even pretend to follow debt collection law and the threats they make would be laughable if there were not so many consumers who do not know their rights. It is illegal to call debtors at work, or to make incessant calls. Legitimate debt collectors are prohibited from making misrepresentations such as that the consumer may be arrested.

It is possible for a creditor to have a debtor arrested, but only for contempt of court. This can only happen after the debtor ignores a subpoena.

A subpoena is way different from a summons. A subpoena is a command from a judge to appear in court at a certain time on a certain date. Ignoring a subpoena is contempt of court and may result in being arrested and thrown in jail. However, a subpoena for a debtor to appear in court is issued only after there is a judgment against the debtor that has not been satisfied. Then the creditor can ask the judge to order the debtor to come to court.

A summons is issued at the beginning of a civil case. If you ignore a summons, the worst that can happen is that the court will enter a judgment against you.

The Fair Debt Collection Practices Act has many consumer protections. For example, it requires collectors to send consumers a written notice within five days of the initial contact. The consumer must be informed of the amount of the debt, the name of the creditor, and a statement that the consumer has 30 days to contact the creditor in writing to file a dispute or request validation. If they do not give you a written demand, write them off as guttersnipes.

The phone numbers that showed up on caller identification were from the 818 area code: 818 584 7330, 818 396 9009, and 818 483 0162. The calls are coming from overseas, so the caller identification registers are false. I was able to call these extortionists back on 415 670 9149, but that will probably only last a day. If you do an Internet search for these numbers or the numbers showing up on your phone you will find a host of complaints about harassing phone calls and vicious threats by these bogus collection agents.

If you get bogus calls from a collection agency about debts you do not owe, do not get upset. They cannot harm you unless you give them a credit card number to try to pay them off. This is a poorly-executed attempt at extortion. They may call incessantly for a day or so, but eventually they will get tired of calling and leave you alone.

You could also mess with them if you have time on your hands. Give them a fake credit card number and keep changing a digit here or there when they read it back to you: “I didn’t say 5479, I said 5497; no, not 5497, 5947; I’m so sorry, the numbers on these cards are so small and I can’t afford to get new glasses; hold on while I go look for a magnifying glass . . . [minutes pass] . . . I’m still looking for that magnifying glass.”

You might try seducing them into phone sex. They probably are in a criminal enterprise that punishes time-wasting with flogging or loss of a finger. With a little luck, you might hear your caller getting the beating you would like to give him.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

 

©2011 John B. Payne, Attorney