The Washington Post has a fascinating, in-depth look at one Chicago-based company, Aeon Financial, which has purchased thousands of liens in D.C., Maryland, Kentucky, Iowa, and Ohio.
We say “Chicago-based,” but that’s really just where the company’s mailboxes are, reports the Post.
In recent years, Aeon has purchased thousands of liens in various states and in D.C., making a profit by tacking on substantial legal and other fees to the usually small lien amount.
Like one D.C. resident who found out he owed $500 on a condo parking space — not even the condo — after lien notices had mistakenly been sent to the previous owner.
He went to pay the $500 but then found the debt had been sold to Aeon, and the company now wanted $4,200 — more than eight times the original debt — to cover its legal fees.
And thus a 2-year legal battle began, with a judge ultimately deeming the $4,200 bill “excessive” and unnecessary” before knocking it down to $952.
The City Attorney General for D.C. filed suit against Aeon in 2009, claiming it was charging abusively high legal fees to consumers. That case is still pending. Lawyers for the city have been trying to suss out for years who exactly owns the company, but Aeon has repeatedly fought back, asking the court for a protective order to prevent it from being compelled to turn over financial documents that would reveal the ownership.
The best the Post could figure was that a Chicago-based lawyer, Mark Schwartz, is a key figure in the business.
Records from 2004 and 2005 list his sister as the manager of a company named Aeon Properties in Nevada and Maryland. Documents filed in 2011 in Kentucky list Schwartz as a director of Aeon and give his $1.7 million home in Vail, CO, as an address.
Another “owner” of the business is a company called Axis Investment Holdings Trust, which lists the same Chicago office as Aeon, and for which Schwartz is CEO. The office for both of these companies is held in the name of Records Direct, which is a subsidiary of Axis.
The true ownership of a company like Aeon isn’t just a matter of curiosity. On a consumer-facing level, the company’s lack of a place of business, reliable method of contact, and accountability to ownership can result in confusion for those receiving bills and notices from Aeon.
But there are also other legal concerns. For example, the Post points out that Aeon, under fire from officials in Cleveland for allowing foreclosed-upon properties to fall into disarray, managed to unload 83 of those properties in a single day to newly formed LLC. Did Aeon just shuffle these properties to another hand in order to get the city off its back? It’s hard to say without knowing exactly who owns the company.
“This is debt collecting that leads to the destruction of the lower economic level of the community,” said former D.C. Attorney General Peter Nickles. “Anyone who would be behind that kind of scheme — and it was a well-thought-out scheme — I don’t think they would be very happy about their names being disclosed on the public record.”