Minnesota investigating whether the firm cheated a vulnerable adult.
The Minnesota attorney general's office is accusing a Texas company of stonewalling its investigation into whether it cheated a vulnerable adult out of thousands of dollars in her nest egg.
The motion, filed Tuesday in Hennepin County District Court, asks RSL Funding and its related companies to comply with its investigation involving Tasheeka Griffith, a 21-year-old single mother who sold nearly all of her $786,000 personal injury settlement to two companies for a fraction of their long-term worth. The company has "utterly failed and refused to respond" to at least three requests for information, the attorney general's office said.
In 2009, RSL Funding bought $269,000 worth of Griffith's future payments for $46,500. Last year, it was trying to buy $299,000 in future payments for $19,000 when a Hennepin County judge ordered an investigation and appointed a guardian ad litem for Griffith, who suffered lead poisoning as a child.
When the company learned of the investigation, it sued Griffith to enforce its previous deal with her, saying the inquiry constituted interference.
The attorney general's office now wants to determine whether the company takes advantage of vulnerable adults and tries to circumvent consumer-protection laws, including Minnesota's Structured Settlement Protection Act, which requires that a judge sign off on all transactions. However, the company has not responded to requests for the identity of its Minnesota customers and the names of the companies it uses for marketing in the state.
Structured settlements are widely embraced by insurance companies and the legal community to guarantee income for people who are sick or injured. With payments spread out, recipients are less likely to spend the money all at once and fall back on public assistance.
They've also created a secondary market of companies that buy settlements, annuities and lottery winnings at a steep discount. About 20 large companies nationwide compete for the $6 billion in structured settlements paid out annually. Such companies prompted 47 states to require approval from a judge to transfer payment rights.
Last fall, RSL Funding's owner, attorney Stewart Feldman, said "the system worked as it should" in Griffith's case, and that a guardian never should have been appointed for her. He did not respond to a request for comment Tuesday.
Feldman's company has been subject to injunctions in Texas forbidding it from using the arbitration process.
State attorney general's spokesman Ben Wogsland said the next step will be a hearing for a judge to determine whether RSL Funding must turn over the requested information. If the company does not respond to a judge's order, RSL could be found in contempt of court.
Abby Simons • 612-673-4921