Law Firm’s Schemes Cause ‘Unconscionable’ Harm to Consumers
A national consumer bankruptcy law firm and its local partner attorneys were sanctioned and enjoined by the U.S. Bankruptcy Court for the Western District of Virginia for causing ‘unconscionable’ harm to their clients. The court found that the law firm and its attorneys, among other things, systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme.
The court also found that the law firm and its attorneys failed to adequately supervise their salespeople to prevent their unauthorized practice of law, and that the law firm demonstrated a ‘focus on cash flow over professional responsibility.’
Law Solutions Chicago, doing business as ‘UpRight Law,’ its managing partner Kevin Chern, and affiliated partner attorneys Darren Delafield and John C. Morgan Jr. were sanctioned by the court. The court ordered Law Solutions Chicago to disgorge all fees collected from the consumer debtors in both bankruptcy cases, and revoked its bankruptcy filing privileges in the Western District of Virginia for not less than five years.
The court also imposed additional sanctions of $50,000 against UpRight’s managing partner Kevin Chern, and $5,000 each against UpRight’s affiliated partner attorneys Darren Delafield and John C. Morgan Jr.
Director Cliff White of the Executive Office for U.S. Trustees announced the sanctions, stating that ‘lawyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system.’
The case is a result of a four-day trial, and the sanctions are a significant blow to the law firm and its attorneys. The court’s findings and sanctions demonstrate the importance of adequate representation and supervision in the bankruptcy process.
The U.S. Trustee Program will continue to vigorously enforce the law and protect all stakeholders in the bankruptcy process. The sanctions in this case serve as a warning to other law firms and attorneys who engage in similar practices.
Mandatory Facts:
Defendant: Law Solutions Chicago (UpRight Law)
Criminal Charges: Unauthorized practice of law, inadequate representation, bankruptcy scheme
City and State: Roanoke, Virginia
Exact Date: February 12, 2023
Sentence or Outcome: Sanctioned $250,000, additional sanctions of $50,000 and $5,000, revoked bankruptcy filing privileges for not less than five years
Dollar Amounts: $250,000, $50,000, $5,000
Key Facts
- State: Virginia
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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