Derek Distenfield, Owner of Legal Docs By Me, Violated Court Order to Pay Restitution

Schneiderman: My Office Will Fight for Restitution From Unscrupulous Business Owners, Prevent Additional Victims

Attorney General Eric T. Schneiderman recently announced that, after reviewing evidence submitted by his office, Supreme Court Justice James P. McClusky has issued an order to show cause to the business formerly known as Legal Docs by Me and its owner, Derek Distenfield, as to why they should not be held in contempt of court for violating two court orders which partly required Legal Docs by Me to pay restitution to consumers. In a case brought last summer, Attorney General Schneiderman accused the business—now operating as NextGenJustice—of engaging in the unauthorized practice of law and deceiving consumers by regularly misrepresenting its pricing, its expertise in the preparation of legal documents, and the nature of the services it provided.

"This company's refusal to provide restitution to consumers is just the latest in its pattern of disrespect for the courts and people of New York," Attorney General Schneiderman said. "My office will fight to ensure that those taken advantage of by unscrupulous business owners get the refunds they deserve, and to prevent additional consumers from being victimized.

The evidence submitted in this contempt proceeding alleges that Legal Docs by Me has violated the consent order by failing to pay restitution to consumers and also violated the court's prior temporary restraining order. The Attorney General seeks full restitution to all consumers harmed by the business's contempt, along with other fines and costs.

As part of the consent order entered last October, Legal Docs by Me was required to provide restitution to "every consumer for all money collected." Despite the clear mandate, the company has failed to issue refunds to a number of consumers. They have further violated the consent order by continuing to use deceptive advertising, primarily with regard to their new tax return preparation services. For example, though NextGenJustice advertises that they are "fully credentialed by the IRS" and licensed to prepare tax returns in all fifty states, investigation has demonstrated that the business has no IRS-recognized credentials and is not a licensed tax-preparer in many states.

The Attorney General also contends Legal Docs by Me violated the temporary restraining order which was in place "to protect the public from likely damaging legal consequences" during the pendency of the litigation. The court's order was signed in June 2014 and in effect until the consent order was finalized in October. The restraining order barred the business from providing any legal services other than simply handing out official form legal documents for completion by the consumers themselves. Legal Docs by Me, however, blatantly disregarded the court's directive and continued to provide unlicensed legal services to consumers, including the sale of divorce documents, living trusts, and a deed.

A hearing on the contempt application is scheduled for May 14, 2015 at 9:30 A.M.

The contempt proceedings in this case are being handled by Assistant Attorney General Alicia M. Lendon, Senior Investigator Chad Shelmidine, Assistant Attorney General In Charge Deanna R. Nelson and Executive Deputy Attorney General for Regional Offices Martin J. Mack.