RICO Class Action Filed Against Auto Smart, MD Attorney

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Car dealership Auto Smart, LLC, attorney/debt collector Ralph M. Murdy, and sub-prime credit lender Samuel Spicer are the defendants in a complicated proposed class action that claims the parties violated federal Racketeer Influenced and Corrupt Organizations Act (RICO) laws, as well as Maryland consumer and debt collection statutes.

According to the 27-page complaint, Hartford County-based Auto Smart provides financing to customers in the form of a lump sum or a service of lump sum investments, which the case says are provided by defendant Spicer. The financing provided by Spicer—which isn’t always for the purpose of auto loans, the case notes— is extended at a stated 24 percent interest rate and has been picked up by “more than 100 borrowers from 2004 to the present,” the suit says.

The problem with all this, the lawsuit alleges, is that defendant Spicer does not have a lender license, a violation of Maryland’s Consumer Loan Law (MCLL). The alleged lack of credentials, the case continues, has apparently not stopped Spicer from engaging in some other practices reviled by many consumers—namely property repossession— for which he allegedly recruits Auto Smart to handle the dirty work and then some:

“As part of his general business practices, Spicer charges and collects from every borrower substantial and illegal interest and charges with respect to the MCLL loans from each loan account,” the case reads. “MCLL, however, specifically restricts any person from charging or collecting interest or fees unless specifically provided for under the statute. Spicer hires Auto Smart to repossess the personal property.”

Auto Smart allegedly repossesses personal property on behalf of Spicer—even though the car dealer has no security interest in the property—and then sells the repossessed cars to new purchasers. From here, Spicer allegedly wipes his hands clean of the situation:

“Spicer does not credit his borrowers’ accounts for the money received for the repossessed vehicles’ subsequent sale or waive the deficiency balance for the loan after the resale,” the lawsuit argues. “Moreover, Spicer fails to tell his borrowers that the repossessed vehicles were resold to a new consumer or the amount heh received for the repossessed motor vehicle.”

And where does defendant Murdy come in? According to the case, he is in charge of collecting debts owed to Auto Smart and Spicer. When consumers cannot pay, the case continues, Murdy allegedly files lawsuits in Maryland state court to collect.