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Lawyerless legal business told to cease and desist

Posted by: Jane Friedmann under Advertising claims, Businesses in hot water, Buyer beware, Whistleblower Updated: April 22, 2013 - 4:12 PM

A Blaine man who counseled debtors and prepared legal documents is barred from those activities in Minnesota, the U.S. Bankruptcy Court for the District of Minnesota ruled last month.

The ruling follows cease-and-desist orders in Colorado, Missouri and the Eastern District of Wisconsin and an agreement to refrain from certain activities in St. Louis County in Minnesota.

Edward Jonak’s business, 3rd Millennium Systems, Inc., operated under a handful of different names including Affordable Law Center and Affordable Court Services, and had an office in four Minnesota cities.  He advertised bankruptcy, divorce and DWI “legal plans” for a flat fee and freely used terms such as “legal,” “court,” “law,” and “attorney.” But Jonak isn’t a lawyer and his businesses employed no lawyers.
 
In an interview with Whistleblower last year , Jonak said that he needed no license or permission to provide help to his customers. Despite the previous court rulings, Jonak maintained he wasn't breaking the law.
 
U.S. Bankruptcy Judge Gregory Kishel disagreed and called Jonak’s “flimsy structure of a self-styled ‘legal plan’ clear violations of federal law.
 
Jonak told customers how to fill out forms, gave advice, referred people to lawyers for an additional fee and contracted the typing of forms to a person in another state, according to the ruling. The typist signed the papers stating he was the bankruptcy petition preparer. Jonak’s name did not show up anywhere in the bankruptcy filings, as required by law.
 
One bankruptcy petitioner testified that Jonak advised him to list a four-wheeler under “tools” as exempt. Others said that Jonak advised them on which type of bankruptcy to file for, whether to list student loans and whether to file state or federal exemptions, among other advice. A number of customers named in the ruling were unsure whether Jonak’s business was a law firm or if Jonak was a lawyer.
 
Customers were required to initial disclaimers such as “I do not believe the advertizing [sic] responded to was misleading in anyway,” “I have not been directed by anyone to ask legal strategy questions” and “no one at Affordable Court Services can give legal advice," disclaimers that Kishel described as "grotesquely self-serving.”

Jonak was ordered to refund the fees paid by 18 former clients and pay each $2,000 in damages.

McDermott v Jonak

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