This past January, Andre Hawkes got the first of several unpleasant phone calls. “We have your name here,” the caller said, explaining that he was collecting old debts for the Philadelphia courts. “If this debt isn't paid, a warrant could be put on you.”
Hawkes' immediate reaction was a question: Who are you?
The answer was much more complicated than he could have imagined.
Hawkes was caught up in an aggressive collection effort initiated by the Philadelphia courts — the First Judicial District (FJD) of Pennsylvania — in February 2011. Last October, a City Paperinvestigation revealed that the program resulted in the harassment of people, often poor, who did not know they owed decades-old debt — or who, in fact, owed nothing at all.
Since then, CP's continued investigation has found that third-party collection agencies hired by the FJD — including one agency whose owners owe the city millions of dollars — have threatened alleged debtors with arrest, outsourced work to a questionable subcontractor and engaged in alleged legal improprieties.
In November, the FJD temporarily halted third-party debt collections, CP has learned.
“We have recalibrated,” says deputy court administrator Dominic Rossi, who oversees collection efforts. “We looked at some of the things that we implemented right off the bat … and a lot of the issues we've experienced.” Rossi, who declined an interview request, refused to specify what “issues” were encountered or what would be “recalibrated.”
The collection program was initiated in the wake of the Inquirer's high-profile 2009 “Justice: Delayed, Dismissed, Denied” investigation, which found that the courts, then administered by the now-defunct Clerk of Quarter Sessions, had failed to collect an estimated $1.5 billion in forfeited bail, fees, fines and restitution dating back to 1971. The Clerk of Quarter Sessions, an elected row office, was abolished in 2010 precisely because of bureaucratic incompetence — yet the FJD is still relying on its records for collections. The results have been Kafka-esque: People have been accused of owing bail related to long-ago missed court dates — during periods when they were actually incarcerated. Others have been chased down for court fees they paid years ago.
But shoddy records were only one part of the problem. The FJD appears to have engaged collection agencies without meaningful oversight. Ten law firms submitted bids to FJD to participate in the collections work. The FJD hired all of them, plus two collection firms, and promised a fee of 25 percent of the debt and interest in non-bail cases. The FJD, according to its Request for Proposals, planned to assign each firm 500 cases each month; CP is still attempting to acquire data reflecting how much work each firm received and how much they were paid.
Hawkes was told that he owed $3,600 in court fees and fines, dating back to a 2004 conviction for possession of an illegal gun and drugs “with intent to distribute.” The company, according to Community Legal Services' (CLS) Suzanne Young, identified itself as Coleman Associates and claimed to represent Convergent, a law firm contracted by the FJD. Reached by phone in Maryland, a man who would only identify himself as “Mr. Connor” confirmed that he had previously worked for a law firm on FJD debt, but would not say which one.
Subcontracting is allowed only with the court's written approval.
“They never wanted to give me an address,” says Hawkes. But they did want a credit-card number. “That's when I started thinking this was some kind of scam or something. I said, 'I'm not giving you my credit-card number. You're not even giving me an address.'”
Hawkes, now eight years clean and sober, negotiated a $10-per-month payment plan directly with the court after seeking help from CLS. He is not, he says, a difficult man to locate, so it is unclear why the courts needed a private firm to track him down. Indeed, it could have violated the court's own rules, which stipulate that law firms are not to be given accounts until the court and a collection firm have both made unsuccessful attempts.
For a man who has turned his life around, the prison threat was chilling.
“I don't have much,” says Hawkes, who has sole custody of his 8-year-old child. “I have my little apartment, my car and my daughter. If I get locked up, what's going to happen to my daughter? It would be kind of devastating if I got locked up and there was no one to pick her up from school.”
Another former debtor, who asked not to be named, received similar calls in September 2012. The threats were stark: “They'll take my house if I own a house; if I own a car, they'll take it.”
The company said that she owed more than $100,000. But the woman, who has been off probation for 15 years, had been on a $35-per-month payment plan that she set up directly with the courts seven years earlier. The threats only stopped once she contacted a lawyer at CLS.
Attorney Douglas G. Aaron of Dion, Rosenau, Smith, Menszak & Aaron mailed a letter to yet another debtor that threatened to “ask the court to issue a bench warrant directing the Sheriff to physically bring you into Court” if she did not respond. Aaron told CP that the FJD had authorized such threats insofar as they are “permissible under the regulations and rules of civil procedure.” He says that the firm has sought bench warrants, but that none were executed before the November moratorium on third-party collections. This debtor, says CLS, was not first contacted by the court.
CLS is pleased that FJD suspended third-party collections, but wary of what might happen if and when the third-party collections are restarted, says attorney Rebecca Vallas. She cites “the great hardship that aggressive collections has imposed on very low-income Philadelphians, as well as the documented problems in substantiating much of the debt being sought.”
CLS is urging the courts to limit collection efforts to debt not more than five years old, which would exclude the cases mentioned above. The courts say that Mayor Michael Nutter, who declined an interview request, has the power to decide such a policy change. The Inquirer, whose investigation prompted the collection effort, has not dedicated any of its many follow-up articles to the collections controversy.
One law firm FJD hired in February 2011 was St. Hill & Associates, which later changed its name to Convergent Legal Group LLC. The courts, which told applicants that their “qualifications” would be judged based on their “experience on similar projects,” will not say whether they examined St. Hill's history. But a simple Internet search would have raised a number of questions.
St. Hill had received $8.3 million in city-backed loans and loan guarantees from the Philadelphia Industrial Development Corp. (PIDC) during the Ed Rendell and John Street administrations. Most of that money was never paid back.
St. Hill's FJD contract was terminated in February 2013, soon after CP began making inquiries into its record.
Founded by Jennifer and Tommie St. Hill, the firm was by 2000 “one of the largest African-American-owned collection agencies in the nation,” according to a Philadelphia Business Journal article at the time. It collected debts for the Philadelphia Law Department, the Water Revenue Bureau and Philadelphia Gas Works. “Probably a year after we started I knew we had to get large,” Tommie St. Hill told the Journal. “We're in this business to get rich.”
The couple made good political friends, giving hefty donations to Mayor Street and to Mayor Rendell before that. The Street administration, according to a 2001 CP article, awarded St. Hill & Associates one $870,000 no-bid contract to collect back taxes after the couple contributed $24,500 to his re-election campaign. Tommie St. Hill served as press secretary to U.S. Rep. Lucien Blackwell, the late husband of Councilwoman Jannie Blackwell. Jennifer St. Hill's Philadelphia Deed Service also received $225,000 per year for nearly a decade in “verbal” contracts from Sheriff John Green.
But the company came crashing down in 2004 as the city for unknown reasons cancelled its contracts, office rent went unpaid and dozens of employees were laid off. Jennifer St. Hill filed for personal bankruptcy that year: the businesses' debts, including the outstanding city loans, were guaranteed in the couple's name. Her case was stuck in bankruptcy court until 2007, but as creditors moved to sell her suburban Wynnewood home in 2006, she secured a $1.3 million loan against it. Fourteen months later, she sued to rescind that loan, arguing that lender and broker fees had not been properly disclosed. In 2010, the U.S. Third Circuit Court of Appeals ruled against her.
St. Hill, who did not respond to numerous requests for comment, still owns her $567,000 home. More than a decade ago, says PIDC president John Grady, the city gave PIDC $8.3 million to provide $5.9 million in loans and $2.4 million in loan guarantees to support St. Hill's expansion. Only $930,000 of the debt was collected, and the rest was written off as uncollectable. PIDC maintains a $200,000 claim against the house.
“St. Hill & Associates was a successful debt-collection company,” says Tommie St. Hill, who divorced Jennifer St. Hill and left her with the business years before. “We made enough money, closed it down.”
In 2008, the Board of Ethics found that IBEW Local 98 had illegally paid him to create anonymous, racially charged flyers attacking then-mayoral candidate Nutter.
Contacted last week, Rendell called it “surprising” that the company had received a new contract from city courts.
Not long after beginning that contract, St. Hill's debt collection effort drew accusations of improper behavior from the Philadelphia District Attorney.
On May 6, 2011, St. Hill attorney Michael F. Coates wrote a letter to the DA demanding that they fork over revenue from a home on Grays Ferry Avenue that had been seized from convicted drug dealer Larry Francis. Francis owed $53,615.56 in 11-year-old debt to the courts. Coates wanted that, plus interest and attorney fees.
The DA — which is allowed by state law to take a property involved in a drug crime, through a civil process known as asset forfeiture — resisted. And the case brought to light numerous troubling practices on the part of St. Hill.
Most seriously, Coates failed to properly serve Larry Francis, mailing legal documents only to Francis' old address, even though he was then locked up in state prison — “a fact,” the DA noted, that is “easily obtainable through public records.” That is the sort of oversight that could lead collectors to seize property without providing debtors with proper notice.
Coates' demand also offers a window into the large sums of money at stake: $171,755, including $80,085 in debt (raised by more than $26,000 from the original $53,615 without explanation), $57,318 in interest, and a hefty $34,351 in attorneys fees. (The exact value varied across filings because of seeming typos or errors.)
Reached last week by phone, Coates told CP that he was “going to give you a call back. I'm actually in the restroom right now.” He never did.
The DA also pointed out that the company's letterhead kept changing: One May 30, 2011, filing identified Coates' outfit simply as Law Offices, while a May 26 letter was on letterhead of St. Hill Law, LLC, a company that did not legally exist. A June 29 letter was sent on entirely different letterhead: Convergent Legal Group, LLC.
Coates testily responded that the DA's “understanding and analysis of the letterhead” was “wholly impertinent” to the case. But it was not impertinent to their contract with the FJD, which began to evince some concern over the group's documentary irregularities. On June 27, 2011, Jennifer St. Hill had sent a letter to the courts asking that the name on the debt collection contract be changed to Convergent, but the newly christened company did not respond to court inquiries until March 16, 2012 — the same day the company registered their business with the city of Philadelphia.
The letterhead indicated that the firm was now located in the high-profile Widener Building, just across the street from City Hall and in the same building as the District Attorney. Today, Convergent seems to have disappeared yet again: they have no office in the Widener Building, and a security guard says that he never heard of them. For debtors, the respite might be temporary.
This article was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations.