Several parties are accused of inventing a made-up settlement agreement in order to obtain funding from prominent litigation funders. Joseph Hoats, Edwin Tanglao, Susan Hammatt, and Christopher Hammatt, are all accused of participating in the fraud. Defendants are currently out on bail.
Inner City Press explains that a fraudulent settlement of $16.5 million was allegedly created under the pretense of funding litigation in a case regarding automobile ignition switches. The car company in question is not named in the complaint, though many suspect that it’s General Motors—which currently has an ignition switch-related case underway.
A proceeding was held on June 12th in the New York Southern District court. Judge Paul Gardephe announced that he would not be setting a trial date, and has indicated that a trial would not happen before fall, and perhaps not even then. Meanwhile, the US Attorney’s Office announced plans to seek a superseding indictment—likely with more charges against Hoats in the near future.
At the time of their initial arrest, Manhattan US Attorney Gregory S Berman explained that the defendants allegedly enriched themselves at the expense of several small businesses in New York. The group allegedly used fake personas to contact clients and negotiated money from funders with tales of suffering families on food stamps.
The group was allegedly involved in other schemes, including defrauding oil and gas companies. They stand accused of using fraudulent tactics to convince their targets to send money for large orders of oil and gas. When the fraud was discovered, Susan Hammatt reportedly made false statements about her and her husband’s role in the fraud.
No doubt, funders are hoping that this case will lead to outcomes that discourage further scams targeted at the industry.
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