State AG Seizes $12 million in Assets in Debt Settlement Action

Alabama Attorney General Troy King and the state’s Securities Commission announced Wednesday that they had shutdown one of the largest debt settlement schemes in America.

Autauga County Circuit Judge Ben Fuller granted a request from the agencies to stop the illegal activities of a Prattville attorney, Keith Anderson Nelms, and his companies, Allegro Law LLC and Allegro Financial Services LLC.

Seven months ago, King filed a lawsuit to stop Nelms’ businesses and froze his assets while allegations were reviewed concerning Allegro’s unlicensed business, its ineffectiveness in reducing the debts of its clients, and its false representation of the services provided.

The Court’s ruling now permanently prohibits Allegro and Nelms from engaging in any further trade practices and from operating a debt settlement or debt management business in Alabama.

According to press release from King’s office, the Court concluded that Allegro customers were deceived in the following ways: "(1)consumers were led to believe that Allegro Law, LLC was a law firm providing legal services, when in fact, consumers were not provided legal services; (2) consumers believed that Allegro was located in New York, when it was located in Prattville, Alabama; (3) consumers were not aware that they would be charged a fee of 16 percent of their total debt enrolled in the program and that 100 percent of their monthly bank drafts would go toward payment of that fee until the fee was paid in full; (4) consumers were deceived about the effectiveness of Allegro’s program and the certification of Allegro’s services; and (5) consumers were directed to stop making payments to creditors, which resulted in increased interest rates, late fees, further damage to their credit ratings, and additional and increased collection activities by their creditors."

Following the ruling, $12 million in assets will be held for approximately 15,000 Allegro customers nationwide, of which about 175 are Alabama residents.  Refunds will be determined in the future.

"People who were in desperate circumstances came to Allegro for help, and instead they suffered greater harm. With this ruling, Allegro will not be allowed to cause further damage, and steps are being taken to restore as much money as possible to the victims whose trust was betrayed.  My office will not permit any person or business to operate massive scams within our state," Attorney General King said in a statement.