Collection law firm Friedman & Wexler LLC, Chicago, is being sued by HSBC Finance Corp. for more than $400,000 in funds that were intended to be held in trust for the bank - but are missing. HSBC hired the firm in 2005 to help it collect outstanding consumer loans. The bank paid the firm 25% of the amount collected.
HSBC fired the law firm in January after discovering it had insufficient funds in its bank account to cover more than $231,000 in remittances to the bank, according to the suit filed yesterday in Cook County Circuit Court. An investigation also revealed four unpaid electronic transfers totaling more than $171,000, according to lawsuit.
HSBC officials reported the company further identified more than $24,000 in phony expenses that the firm billed to the bank. The overcharges include expenses for court-filing fees related to complaints that the law firm never filed, according to HSBC.
The suit also names attorneys Norman Wexler and Mitchell Wexler as defendants. The Wexlers were not available for comment but on the firm's Web site reported that they are special assistant corporation counsels for the City of Chicago. HSBC claims this is not the first time the law firm and the attorneys have failed to account for and remit funds to clients. At least three former clients have sued the firm for failing to make necessary payments, the bank said in the suit.
[Editor's Note: This story was originally published on April 15 and updated two days later with additional information published in the Chicago Tribune.]
