Behind That Sign
A real-estate agent with bad credit offers financial advice and legal services
The sign is like thousands of others posted illegally on lawns, vacant houses, and utility poles across the city. This one was plucked from a pole near the Burger King at 29th and Sisson three weeks ago by Robert Strupp of the nonprofit Community Law Center after it piqued his interest. It reads:
The Precise Group LLC.
Credit Repair $199
Home Save Program
Chapter 7 & 13
"This sign was troubling," says Strupp, who has spent years pushing for stricter laws against so-called "bandit" signs, "because the message was offering credit repair and bankruptcy advice, and our research didn't suggest that there was anybody associated with this group that was qualified to provide that kind of advice or counseling."
The number reaches a voicemail message: "Thank you for calling the Precise Group. Sorry, for all of our trained consultants are unavailable," it says. Leave your name, number, e-mail, and the service about which you are calling and "one of our trained consultants will return your call."
Strupp says an intern at his office did a web search and learned that the phone number belonged to a real-estate agent named Kalid Johnson. The Precise Group, LLC was registered on March 21, 2007. Its resident agent is Veronica Peterson, who gave her address as 4940 Fox Grape Terrace, Columbia.
Peterson became briefly famous in July 2008 after The Baltimore Sun put her picture on its front page, depicting the single mother as a victim of the foreclosure crisis. Peterson had bought a four-bedroom house the year before for $545,000 with no money down, and had defaulted on her two mortgages almost immediately. Conservative commentators claimed Peterson, who said she ran a daycare center from her home, was more of a "predatory borrower" than a victim. The online court records seemed to indicate that she had lived in the house for a year without making any payments. ("Victim Mentality," The News Hole, July 30, 2008.)
Peterson filed for bankruptcy under chapter 13 (reorganization) on Sept. 10, 2007. It was dismissed a few months later when the judge found her repayment plan--she offered to pay less than $900 per month to cover the house, a 2006 Chrysler Town and Country and various other debts--insufficient. She appears to have moved out of the house in October 2008.
She could not be reached for comment, and her lawyer in the foreclosure case, Kirk B. Arthur, did not return a voicemail message.
"She is actually my sister," Johnson says, adding that she has nothing to do with the day-to-day workings of the Precise Group.
In a phone interview, Johnson says his company acts mainly as a consultant to debtors, to help them restore their credit scores. But he offers other services as well.
"We were actually a bankruptcy-petition company a few years back--under another company name," says Johnson, who says he attended Milford Mill high school but did not go to college. "We filed petitions for people--actually, we're leaning back toward that because some past clients have been giving us a call . . . we do it at a discount."
Federal law allows non-lawyers to file bankruptcy petitions on other people's behalf, so long as they do not give any legal advice or handle any money. Under the law, petition preparers are little more than typists, and can charge no more than a typist would.
"Because of our own trials and tribulations that we experienced, we decided to try to help other people," says Johnson, who filed for bankruptcy himself on March 19, 2007. "We have a combined 18 years' experience."
He is not clear about what he means by "we." Johnson says he has two partners and mentions them by last name only. He says there is no lawyer on staff or on call, because that would be illegal. "If someone calls us and they ask for lots of legal advice, we say we can't give you legal advice," he says. "It's against the law for a lawyer to share fees or be in agreement with non-lawyers."
Johnson says he also has a silent partner.
Johnson says he is a former debt collector who worked for Chase Bank and Chesapeake Bank for 18 years. He says his credit-repair services, priced at $199, are helping him gather case studies for a "financial-services book" he has written.
"I'm doing [credit repair] at a ridiculous price, a really low price, to get new folks for my book," Johnson says, adding that the book will be published next spring. He declines to divulge the title, saying, "I have to keep that under wraps right now."
Johnson says he got into the credit-repair business after navigating the system on his own, and then helping family members and friends. As his expertise about the credit-reporting agencies blossomed, he developed a business through word-of-mouth. He claims to have "dozens" of satisfied clients.
After an initial phone interview Johnson agrees to meet in person to talk more. Later, he changes his mind, declining to meet, make any of his satisfied clients available for interviews, or even to take a follow-up call for fact-checking.
It is not legal to accept money up front for credit-repair services, according to state Assistant Attorney General Bill Gruhn. "If someone is offering credit repair, if they're asking for money up front, it's a scam," he says. "Credit repair agencies are not allowed to collect money up front."
Gruhn cites the Maryland Credit Services Businesses Act. Credit-repair companies have to be licensed by the state Commissioner of Financial Regulation, and they have to print their license number on any advertisements, he says. The state law dates to the 1980s, he says, and since 1996, there is also a federal prohibition on the practice. "Now that it's illegal everywhere to collect money up front, it's rarer," Gruhn says.
Whatever the Precise Group's current legal status, the available public records depict difficult financial circumstances for Kalid Johnson. Ford Motor Credit sued him for $4,300 in 1993, in a case that dragged on for nine years. He satisfied the debt in 2002. He has several open judgments against him, including a 1999 child-support case totaling $20,000. The homeowners association in his neighborhood has sued him twice to collect its fees.
In February 2007, Fremont Investment and Loan began foreclosure proceedings on Johnson's Harford County home. He had bought that home in October 2005, using two loans totaling about $390,000. He had previously lived in Reisterstown, where he and his wife sold their home--bought in 2001 from Wells Fargo for about $135,000--for $240,000.
Johnson filed his own bankruptcy case two days before paying the $196 filing fee to charter the Precise Group. The company is currently not in good standing, according to state-tax records, meaning it has not filed its annual report/personal-property return to the state.
Despite his ostensible expertise, bankruptcy records indicate that Johnson's initial filing was missing information, including schedules depicting his income and debt. He also made a glaring math error in his initial repayment plan, and was not able to get the judge to sign off on his plan despite four more revisions. The case ended up in chapter 7 liquidation in March 2008.
His foreclosure is still pending.
"Sounds like it's the team that could not save themselves," says City Councilwoman Mary Pat Clarke (D-14th District), in whose district Johnson's sign was found. Clarke has been an advocate of tougher penalties for illegal signs. "I don't know this guy, but when they post illegal signs--and that is what these are--that tells they're fly-by-nights."
Strupp says the city's sign ordinance, which allows community groups to take down signs and help the Housing Department levy fines on the violators, is still not being enforced, more than three years after its passage ("Times of the Signs," Mobtown Beat, July 29). "We have over 20 signs . . . that we or community associations presented to code enforcement," he says. "I have not been informed that any one of those individuals has been fined or sanctioned in any way."
Johnson says he didn't know about the city's "Bandit Sign" ordinance.
"Actually, I haven't heard much about that," Johnson says "I had someone call me angry. I actually started taking down signs. I don't want to say I'm helping people and then get the city pissed at me."
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812 Park Ave.
Baltimore, MD 21201