Ivette’s divorce was expensive. She had to hire an attorney and raise a child on a nurse’s salary. She moved in with her parents, and as the bills piled up, she turned to the lender LoanMe in 2015 for some quick cash.
“My parents aren't rich and I wasn't going to bother them with my things,” she said. “It was just a matter of pride.”
The interest rate for Ivette’s $3,025 loan was a staggering 138%, which meant that if she stuck to her payment plan, she’d ultimately send LoanMe $16,594.23 in payments. She knew taking out loans was a bad idea — the LoanMe debt wasn’t her only one — but felt like she had no choice. (inewsource agreed to use only her middle name for this story because she didn’t want future employers to know about her debt history.)
“I was focused on trying to do what was best for my son at the time and just trying to take care of myself, as well,” she said.
Ivette quickly defaulted. Over the years, she remembered voicemails from collectors. Her financial situation hadn’t really improved, though, and when the calls stopped, she essentially forgot about the debt.
But that didn’t mean her debt disappeared.
Lenders commonly sell off unpaid debts to other companies for just pennies on the dollar, and Ivette’s debt changed hands five times, according to court documents. It landed most recently in the possession of a Pasadena-based debt collector called Achievable Solutions, and the company sued her in San Diego County late in 2019.
Companies are supposed to hire a process server to deliver the complaint to the person being sued. But Ivette said that never happened.
She’s one of hundreds of Californians who’ve been sued by Achievable Solutions in what a Bay area legal aid organization claims in a lawsuit is a large-scale fraud occurring in courts across the state. Achievable Solutions’ actions have already resulted in numerous default judgments for thousands of dollars each — against defendants who may not even know about them.
Issues in the industry
Some in the debt collection industry are known for practices such as harassing phone calls, pressuring people to pay through false statements and collecting on debts that resulted from identity theft. Congress and the state of California have enacted laws to curb such behaviors, but consumers still frequently complain about issues with debt collectors, and government agencies regularly take action against companies for violating the law. For instance, last month the Consumer Financial Protection Bureau ordered the debt collector Portfolio Recovery Associates to pay $24 million for violating numerous debt collection reform laws. The CFPB had previously ordered the company to pay $27 million for similar issues in 2015.
Debt collection also makes up a huge percentage of civil court filings across the country — 24% of all civil filings in 2013 — and research by The Pew Charitable Trusts found the percentage continued to grow in states that regularly reported court statistics. In 2022, collections cases made up more than one third of the nearly 45,000 civil lawsuits filed in San Diego County, according to data inewsource obtained from San Diego County courts. The year before, they accounted for nearly half.
The sheer quantity of these cases makes it difficult for courts to police bad behavior — including a practice known as “sewer service,” which involves filing a case against a defendant without informing them of the lawsuit. When the defendant fails to respond or show up in court, the debt collector can easily win a default judgment that includes the unpaid debt, plus interest and other fees. Collectors can then more easily collect on the debts they claim to own, by garnishing wages or seizing bank accounts or other property.
“You're really dealing with people that are being deprived of important rights — just the basic right to respond to the allegations, to see what evidence is going to be presented against them,” said Joe Villaseñor, a professor at the University of San Diego School of Law who regularly represents defendants in debt collection cases.
The data inewsource examined casts doubt on whether Achievable Solutions really notified the defendants in its lawsuits.
The company has filed nearly 2,800 lawsuits across California between April 2019 and March 2023, according to the court data aggregator UniCourt. inewsource examined dozens of proofs of service — affidavits signed under penalty of perjury testifying to a process server’s attempts to hand over a court summons — filed in Achievable Solutions cases between July 2019 and July 2022. In that sample, not a single defendant was delivered a summons directly. Instead, process servers working for companies called A-United Attorney Service and SueYa, Inc. claimed the summons was left with another person at the defendant’s residence, often identified as a John or Jane Doe.
In San Francisco, a judge granted a $17,487 default judgment to Achievable Solutions in 2020. The A-United process server claimed to have left a summons with a John Doe — a Hispanic male in his late 40s — earlier that year.
A Fresno County court awarded a $4,566 default judgment to Achievable Solutions after an A-United process server supposedly left a San Jose defendant’s summons with an African American Jane Doe in her 30s.
In 2019, the company obtained another $4,770 default judgment in Kern County. The A-United process server wrote that he left the court summons for the Delano, California, defendant with an unidentified Hispanic woman in her 60s.
In 2020, a San Jose defendant lost a case by default after the A-United process server left his summons with yet another Jane Doe. The judge awarded Achievable Solutions $3,945.
Service in these cases may not have been defective, but there is a pattern of serving unnamed persons in lieu of defendants. And in each of the four cases mentioned above, the courts relied solely on the company’s written testimony to award a default judgment to Achievable Solutions.
inewsource was able to get a more complete picture in San Diego County, where Achievable Solutions has filed at least 463 cases from May 2019 to December 2022. So far 21 cases have resulted in a default judgment against the defendant — totaling more than $94,000. Achievable Solutions continued filing new cases in San Diego County through the end of 2022. And while a proof of service hasn’t been filed for most of the pending cases, 93 did include such documents, and all of them claimed the process server left documents with someone other than the person being sued. inewsource reviewed a subset of those 93 cases, and for each case in that sample the service was completed by one of two individuals working for either A-United or SueYa.
Four people including Ivette told inewsource they had no idea they were being sued. Two of them already had default judgments against them for thousands of dollars each.
Substitute service isn’t unusual or illegal. Defendants can be difficult to track down, which is why it’s standard to leave documents with another adult on the fourth attempt. But this necessary step in a lawsuit can be the subject of dispute.
“Quite frankly, there are plenty of defendants who lie through their teeth about not being served,” said Andrew Estin, former president and current board member of the National Association of Professional Process Servers. “Whether to believe the process server or believe the defendant comes down to judging the facts in each particular case.”
But Achievable Solutions cases stand in stark contrast to other debt collectors. inewsource gathered data on collections cases filed in San Diego County from January through August 2019, and found that 50% of the time, process servers reported handing court summons directly to defendants.
In Ivette’s case, Achievable Solutions filed a proof of service that indicated a process server came to Ivette’s apartment in El Cajon a total of four times before leaving the documents in February 2020 with a substitute: a Hispanic John Doe in his late 40s, with brown hair and brown eyes.
But Ivette said she lived alone in early 2020. Her building had a superintendent, but she never told Ivette someone had stopped by.
While the problem of sewer service is well-known in the legal community, empirical data about the issue is limited. In 2010, the Federal Trade Commission recommended states and local jurisdictions take steps to ensure defendants receive notices of their cases. Even after California’s Fair Debt Buyer Protection Act passed in 2013, a 2020 report from the Center for Responsible Lending cited sewer service as one reason so many cases end in default judgments in California.
A coordinated effort?
In 2021, a man attended a legal clinic run by Bay Area Legal Aid, which provides legal services to low-income individuals, and described a sewer service to the lawyers. Achievable Solutions had sued him, and the judge awarded the company more than $5,500 when he didn’t show up to defend himself. Like Ivette, he said he never received a court summons.
The proof of service filed in his case said the process server, James Crawford, left the summons with another Hispanic John Doe in his 40s — which described neither the defendant nor his adult son who lived with him. Bay Area Legal Aid helped the man argue his case, and the judge eventually dismissed it.
Bay Area Legal Aid kept looking into Achievable Solutions’ court filings — more documents signed by James Crawford, more John and Jane Does.
In March 2022, Kai Haswell, an attorney who worked at Bay Area Legal Aid, filed a lawsuit in Alameda County against Achievable Solutions, A-United Attorney Service and several related parties. In the complaint, Haswell alleged that the three main entities involved in these lawsuits — the debt collection company, the process server company and the law firm filing these lawsuits — work in concert in an illegal money making scheme using sewer service. When a defendant doesn't show up, a court will often grant Achievable Solutions a default judgment, which then accrues 10% interest per year.
Achievable Solutions and the process server companies, A-United Attorney Services and SueYa, were incorporated by the same person, and the companies have shared common addresses. A direct link between the debt collector and the process server, Haswell said, could give process servers an incentive to lie on behalf of the debt collector. Using independent process servers helps keep sewer service in check.
“These are all the same people performing this scam and controlling these entities together,” she said. “It makes it so much harder for the court to recognize that there's fraud being perpetrated on it.”
Haswell’s complaint alleges that proofs of service filed in these cases are fraudulent. Crawford would have had to drive impossibly fast to knock on doors according to the times listed on the documents. In one morning in January 2020, Crawford claimed to have driven to nine houses, which included a 49-mile trip completed in five minutes and another 30-mile leg driven in three minutes. In March 2020, he claimed to have attempted service in two places at once, 30 miles apart.
Moreover, Haswell noted in an interview that many of the proofs of service she looked at were from March and April 2020 — the first months of pandemic-related lockdown.
“They couldn't find a single person at home?” she said. “It's beyond belief. It's absolutely not credible.”
Although filing false documents with a court is illegal, Haswell said the operation makes financial sense. The company wouldn’t have to pay a process server, or an attorney to slog through motions, hearings, case management conferences or discovery.
“I think that that's the primary motivation,” she said. “These cases wouldn't be profitable to bring if people were actually able to show up and defend themselves.”
On top of that, Haswell’s complaint alleges that the evidence Achievable Solutions cites to prove ownership of the debts wouldn’t hold up to scrutiny. Haswell also told inewsource that the interest rates on some of the loans — some of the LoanMe loans had interest rates as high as 184% — would make the cases even easier to challenge. By keeping defendants in the dark, the complaint alleges, Achievable Solutions is taking advantage of California’s “overburdened” courts, which Haswell said can be quick to grant default judgments in order to clear the cases from their dockets.
“If people showed up and fought these cases in court, largely they would win,” she said.
‘Sewer service is so 1990s’
One of the process servers listed in a San Diego court filing, Bobby Cheng, definitely isn’t a real person. It’s a pseudonym used by Takashi Cheng. When asked why he signed a fake name next to a statement that reads, “I declare under penalty of perjury … that the foregoing is true and correct,” he said it was for his own safety.
“Takashi Cheng is a pretty uncommon name,” he said. “If you Google me, you can probably find out where I live, what businesses I've invested in and whatnot, and dealing with a lot of these hostile defendants or debtors, that's by far the last thing you want them to be able to do.”
Cheng incorporated Achievable Solutions, along with A-United Attorney Services and SueYa, Inc., both process service companies named in the Bay Area lawsuit. SueYa “makes it affordable and easy for anyone to file a lawsuit, evict a tenant or enforce a judgment in minutes,” according to its website. He said he often serves court summons himself when he’s out on other errands.
Cheng initially described himself as an investor in Achievable Solutions. He described the ties between the companies — what Haswell described as a conflict of interest — as vertical integration.
“It’s much more efficient and economical to have everything in house,” he said.
But in a second conversation, he said he had no direct involvement in Achievable Solutions — he only runs SueYa and A-United, the companies filling out proofs of service for the courts. He wrote in an email that in 2017, “I took on an officer position and removed myself as a shareholder (of Achievable Solutions) to prevent conflicts of interest.”
Cheng admitted that incorrect information had ended up on documents submitted to courts. But he said it wasn’t the result of any intentional wrongdoing and that the scheme Bay Area Legal Aid alleged doesn’t make sense.
“Sewer service is so 1990s,” he wrote in an email, although there’s plenty of evidence that it’s still widely used, particularly in debt collection cases.
Cheng argued that he had no incentive to avoid serving summonses to defendants. He said the issues with his companies’ proofs of service resulted from a data problem. When pushed for information on how this mistake occurred so many times over a number of years without getting noticed, he said that it was a “poor cut and paste job.”
“The one individual that was responsible for that — he's gone now,” Cheng said. “He got lazy.”
He also claimed that defendants in Achievable Solutions lawsuits had in fact received a court summons. As evidence, he said that numerous people were fighting back in court.
When inewsource pressed for examples Cheng only provided one, which was in Riverside County. Examining court data in San Diego County didn’t support Cheng’s claim, either: Before November 2022, only one woman tried to fight her case. Reached by phone, she said she only found out about it when an attorney reached out to represent her — she never received a summons delivered by one of Cheng’s process servers.
‘Pervasive and harmful’
More than a year after she filed the lawsuit in Alameda County, Haswell still isn’t sure James Crawford or any other process servers listed on Achievable Solutions case documents are real people. Cheng and his associates have so far avoided depositions and refused to hand over information that would shed light on the case.
“It's been frustrating,” she said. “It's like running uphill, but very, very slowly.”
Halil Hasic, the attorney who filed the lawsuits on behalf of Achievable Solutions, stated that he didn’t know the proofs of service contained inaccurate information. “Whether a third-party process server does its job is outside the scope of our responsibilities as counsel for our client,” he wrote in an email.
Hasic continued to file substitute proofs of service in San Diego County even after Bay Area Legal Aid sued him. Then, in May 2022, the parties to the Alameda County litigation agreed to use a third-party process server, ABC Legal, for any new complaints. Even then, inewsource found that Hasic continued to file proofs of service signed by “Bobby Cheng.”
Hasic and Cheng argued that because those cases were initially filed in 2021, they fell outside the agreement with Bay Area Legal Aid. Haswell called their interpretation a “bad faith reading” of the agreement.
When asked why he continued to file substitute proofs of service for Achievable Solutions that he would have known were suspect — both before and after the agreement to use a different process server — Hasic didn’t respond.
The defendants in the Bay Area Legal Aid were originally jointly represented by Tomio Narita, who has filed motions to be relieved as counsel in the case, citing a lack of payment. He didn’t respond to requests for comment.
Now Cheng and Hasic are each representing themselves. Kiona Tchan, another party in the case with ties to both Achievable Solutions and A-United, has retained her own counsel, who said he needed more time to study the case before answering any questions from inewsource.
When Haswell considered Cheng’s arguments — that sewer service is a bad strategy, and that the false proofs of service resulted from honest mistakes — she didn’t buy it. The relationships between the companies and the low rate of opposition from defendants was too much of a coincidence to her. Her goal with the lawsuit is to prevent Cheng and his associates from pursuing collection on the cases they’ve filed.
“Most people don’t realize that these practices are so pervasive and harmful,” she said.
Since ABC Legal took over serving papers for Achievable Solutions debt collection cases in San Diego County, the proofs of service show every single summons was handed directly to a defendant — no relatives or co-occupants, no John or Jane Does.
At least one of those defendants has hired an attorney to fight his case.
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