Brian Loncar Finds a New Way to Profit Off His Clients

Categories: Legal Battles

There is little doubt that Brian Loncar is a shrewd businessman. One doesn't dub oneself the "Strong Arm," create a Bat Signal-like image of a flexing appendage, and create a minor personal injury litigation empire without some measure of marketing savvy.

But Loncar is also known to blur ethical lines. For proof of that, look no further the Observer's none-too-flattering 1997 profile.

Loncar seems to have stumbled upon a new money-making strategy, as Nick and Heather Stearns recently discovered. The couple, who filed a lawsuit against Loncar last week, were injured in a car wreck on October 17, 2010 in Lubbock. They took their case to Loncar.

They expected a settlement but, in the meantime, they needed cash. At Loncar's suggestion, they turned to Settlement Advance Funding Enterprises, one of a proliferating number of outfits that extend credit to plaintiffs on the expectation of a legal settlement.

The terms of the loan were terrible. The monthly interest rate was 4.99 percent, or 60 percent per year, and there was a 28.5-percent legal fee taken off the top. They also had to agree that SAFE got first dibs on their settlement money to repay the loan.

All that was spelled out in the loan contract, and the terms are perfectly legal under state laws governing high-risk loans. What wasn't mentioned in the contract or by Loncar is that SAFE is owned, at least in part, by Loncar himself.

Loncar doesn't control the company, at least on paper. The sole manager listed on incorporation documents when the company was formed in 2007 was Kenneth Toudouze, who just so happened to be Loncar's next door neighbor in Highland Park. Later added as a governing member of the company was Fuerte Rios Funding, LLC.

It just so happened that SAFE and Fuerte Rios were incorporated on the same day, May 9, 2007, and that Toudouze was Loncar's next door neighbor in Highland Park. It probably wasn't a coincidence that the sole director of Fuerte Rios is Brian Loncar and that the LLC appears to serve no other function aside from owning SAFE.

It appears, said Ross Sears, who is representing the Stearns in their lawsuit, that Loncar owns and is profiting mightily from the loans he's encouraging his clients to take out. That might be kosher if he told clients he owned the loan company -- plenty of lawyers offer litigants loans to cover day to day expenses, though typically at less outrageous rates -- but Loncar never did. It seems that Loncar actually did the opposite, taking steps to conceal his involvement by establishing an inscrutably named LLC.

Loncar did not return a call seeking comment. Numbers listed for Toudouze and SAFE were disconnected. But Sears thinks Loncar's secretive entry into the loan business could land him in trouble with the state bar. Ethics rules vest attorneys with a fiduciary duty on behalf of his clients. It's clear, Sears said, that Loncar violated that duty.

In the Stearns' lawsuit, Sears also alleges negligence and conspiracy to commit fraud. In the end, Loncar settled the Stearns case for $1,644.77. A third of that was taken by Loncar as legal fees. Another third went to pay off medical bills. Slightly less than a third went to pay off the SAFE loan. The couple walked away with $14.55.

Update on December 5: Loncar's attorney, Larry Friedman, called with a response.

"The Loncar firm did an extraordinary job for the client," Friedman said. "The matter was resolved satisfactorily, the advance was made lawfully, and all the paperwork was properly done."

Loncar does have a one-third ownership stake in SAFE, but Friedman says he discloses this to clients. As for Sears' claim that Loncar's actions somehow violated ethics rules, he points to a pair of opinions from the Texas Commission on Professional Ethics Loncar used when establishing loan businesses. You can find them here.


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27 comments
familyguy
familyguy

Former employee, is code for family posting.

mellyg
mellyg

FRAUD FRAUD FRAUD!!! THIS COMPANY IS NOTHING BUT FRAUD!!

hayezallen84
hayezallen84

Indeed, a lot of people sign and agreement without really knowing the details and later sue the ones whom they had agreement with. We should all be responsible of little things we do especially when it's about serious matters.

FormerEmployee
FormerEmployee

As a former employee of Loncar & Associates I can tell you that this article is very one-sided (biased) and extremely incorrect.  First of all, Brian Loncar himself would never personally "suggest"(as the writer of this story states) or recommend that any client take out an advance on their case, nor would any of his employees.  I know this to be fact.  As a matter of fact, case advances were mostly frowned upon, as any high-risk advance or loan should be, and only explored through insistence and necessity on the client's end.  

It also baffles me how people will agree to and sign something only to complain (and sue) later.  If the terms of the advance are poor then don't do it!  It's simple.  We live in a free country.

This writer also seems to be lacking in mathematical intelligence.  If they received a cash advance on their case, then they walked with more than the $14.55, but I guess that made for a more dramatic ending to their little story. 

This is very poor journalism that involves only one side without any hint of a true investigation on the writers part.

davisjb77
davisjb77

This is a typical example of low lifes trying to take advantage of the system for more money that isn't theirs. How the trial ends up (Loncar will win)--will show you who is right here. Succesful people get sued because assholes want what isn't theres. Stop talking about your mother halldecker.

halldecker
halldecker

tv lawyers deal in volume,  quickly settling cases for a pittance.  Adjusters know they're whores,  they offer way less than the Verdict Reporter says a case like yours is worth.  And the Adlers and Loncars grab it.

Montemalone
Montemalone topcommenter

If these lawyers don't watch it, they're gonna give themselves a bad name.

PseudoNic
PseudoNic

@TaylorLumsden @Dallas_Observer EL MARTILLO DE TAY-HAS!

oakclifftownie
oakclifftownie

In the Stearns' lawsuit, Sears also alleges negligence and conspiracyto commit fraud. In the end, Loncar settled the Stearns case for$1,644.77. A third of that was taken by Loncar as legal fees. Anotherthird went to pay off medical bills. Slightly less than a third went topay off the SAFE loan. The couple walked away with $14.55.

Are you sure the numbers are correct ?  $1,644.77. Hardly seems like a settlement that needed an attorney to collect 

Myrna.Minkoff-Katz
Myrna.Minkoff-Katz topcommenter

TV viewers are simple-minded enough to fall for this guy's tacky shtick.

JSSS
JSSS

Why anyone hires any lawyer or law firm that advertises on TV is beyond me.

FormerEmployee
FormerEmployee

I can see that the Observer is all about Yellow Journalism these days

ScottsMerkin
ScottsMerkin topcommenter

@Myrna.Minkoff-Katz  folks at home during the day see his commercials that show payouts in the hundreds of thousands, thats why people call him

ScottsMerkin
ScottsMerkin topcommenter

@JSSS because insurance companies give you no choice but to hire an attorney, and the ones that are most visible are the ones most likely to get that call.  AS someone who was recently in an accident, I attempted to navigate the injury process without an attorney.  But then the insurance company told me I had to pay all my medical bills out of pocket and submit the bills to them for approval and then they decide if they were medically necessary before approving them.  considering my doctor wanted to send me for an MRI that I couldnt afford to not be reimbursed for, I was forced into obtaining representation.  And no I didnt call the strong arm, or the texas hammer

ScottsMerkin
ScottsMerkin topcommenter

@Myrna.Minkoff-Katz @ScottsMerkin 33% for a settlement, 40% + expenses for trials.  Its very lucrative and nearly all the Personal injury lawyers in Dallas use the same formula.  I dont know of one that doesnt

FormerEmployee
FormerEmployee

@oldschool @ScottsMerkin @JSSS He almost lost his life in that accident, and he has a family and kids just like maybe you all do.  What's funny about that?  And the fire truck was cited for not slowing down at an intersection like they're supposed to.  There were also witneses that stated Mr. Loncar had a green light.  I don't think you all would like it much if that happened to you

MiddleAgedMan
MiddleAgedMan

@ScottsMerkin @oldschool @JSSS Wasn't Adler the one who ran a redlight and was t-boned by a firetruck (while driving his bentley)? (Insert ambulance-chaser joke here)

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