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Tag: Virginia Attorney General

Richard Cullen to become Youngkin’s counselor

Gov.-elect Glenn Youngkin has selected former Virginia Attorney General Richard Cullen as counselor to the governor.

A senior partner and former chairman of McGuireWoods, Cullen will leave Virginia’s largest firm on Jan. 14, the day before Youngkin is sworn in.

Cullen joined McGuireWoods in 1977. From 1991 to 1994, he served as U.S. attorney for the Eastern District of Virginia, and from 1997 to 1998, as Virginia attorney general.

“When I have felt the pull of public service, McGuireWoods encouraged me to answer that call, past and present,” Cullen said in a statement. “That is one of the reasons the firm has been my home for so many years. Although I am leaving, McGuireWoods and everyone here will always be family to me.”

In his tenure specializing in government investigations and white collar defense, Cullen has represented prominent figures, including former Vice President Mike Pence in special counsel Robert Mueller’s probe into Russian interference in the 2016 election. Cullen also led a McGuireWoods team that sued North Korea, winning a $501 million judgment in December 2018 for the parents of Otto Warmbier, a University of Virginia student who died of injuries suffered in a North Korean prison.

Cullen was one of the attorneys advising Virginia Military Institute during a state-ordered investigation into systemic racism at the college, but VMI switched firms in early 2021. Cullen has also represented The Boeing Co. in connection with a federal investigation into crashes of two 737 Max airplanes.  Other high profile clients included former FIFA head Sepp Blatter and former House Majority Leader Tom DeLay, as well as BP America Chairman Lamar McKay, whom Cullen represented in litigation following the 2010 Deepwater Horizon spill.

Cullen also served on President George W. Bush’s legal team during the 2000 Florida recount. During the Senate select committee’s investigation of the Iran-Contra affair, he served as special counsel to U.S. Sen. Paul Trible, R-Virginia, and during the Watergate investigation, Cullen was on the staff of U.S. Rep. M. Caldwell Butler, R-Virginia.

As chairman of McGuireWoods from 2006 to 2017, Cullen helped the firm grow from 750 lawyers in 15 offices to more than 1,000 lawyers in 21 offices, and helped open offices in Texas and California, establish McGuireWoods London and establish a presence in Shanghai. Cullen helped birth McGuireWoods Consulting, the firm’s public affairs arm, in 1998.

“Richard’s impact on this firm, the city of Richmond, the commonwealth of Virginia and the country is nothing short of remarkable. We will miss our friend and colleague, but our loss will be to the great benefit of the governor’s office and the people of Virginia,” McGuireWoods Chairman Jonathan Harmon said in a statement.

A graduate of Furman University and the University of Richmond School of Law, Cullen is admitted to the U.S. Supreme Court bar.

Republicans win down-ticket statewide races, possible House majority

Like the top of the ticket, Virginia’s attorney general and lieutenant governor races were close, but Republicans were ultimately victorious. The party appeared headed to regain control of the Virginia House of Delegates, but The Associated Press said Wednesday morning that several races were too close to call.

However, the state GOP, which swept back into power in Virginia after more than a decade of statewide electoral losses, claimed it had won six seats in the 100-seat house, which would give the party a two-seat margin over Democrats, which held a 55-45 majority for the past two years. The AP had not yet called four of those races as of early Wednesday, though.

Down-ticket statewide races pitted Democratic Attorney General Mark Herring against Republican Del. Jason Miyares, and Republican Winsome Sears vs. Democratic Del. Hala Ayala for the lieutenant governor post, in which either candidate would be the first woman of color to serve in the position.

With 99.7% of Election Day votes and 91% of all early votes counted, Sears held a 51.1% majority over Ayala’s 48.9%. Miyares had 50.87% of the vote, over Herring’s 49.13%, echoing the governor’s race, in which Republican nominee Glenn Youngkin held a 51.07% lead to former Gov. Terry McAuliffe’s 48.23%. Third-party progressive candidate Princess Blanding had 0.69% of the vote after polling at about 1%.

Sears, who was born in Jamaica and became a naturalized U.S. citizen after serving in the Marine Corps, will have significant power as tiebreaker in the Virginia State Senate, where Democrats hold a 21-19 majority. The legislative body, which is elected every four years and faces its next election in 2023, may represent Democrats’ only hope to defeat some GOP initiatives.

Sears declared victory early Wednesday, but Miyares did not take the stage at state Republicans’ celebration, where Youngkin declared he would deliver tax breaks, economic development and jobs, as well as charter schools and more parental involvement in children’s education.

Many incumbent Democratic delegates faced opponents in primaries and in the general election. Some were defeated, including Del. Chris Hurst, D-Blacksburg, who lost by 10 points to Republican Jason Ballard in the 12th District.

Miyares

Democrats regained control of the state legislature in 2020 for the first time in nearly 30 years, an outcome that resulted in part from McAuliffe’s campaigning and fundraising for Democratic delegate candidates after he left office in 2018, as well as demographic shifts in Virginia. With a larger, younger and more liberal Northern Virginia population and shrinking numbers in the more conservative western and Southern regions of the state, the state turned largely blue.

Since 2020, led by Democratic Gov. Ralph Northam, the state has been widely acknowledged as the South’s most progressive state governing body, having enacted sweeping measures, including abolishment of the death penalty to legalizing marijuana and raising the minimum wage. Now, measures that must come up for additional votes — such as commercialization of marijuana — could be in jeopardy.

House leadership would also change if Republicans take control, with House Republican Leader Todd Gilbert of Shenandoah likely to become speaker, replacing Del. Eileen Filler-Corn, D-Fairfax County, the first woman and first Jew to hold the post.

Virginia Democrats’ progressive agenda of the past two years is guaranteed to come to a screeching halt, as control in Richmond will now be dominated by Republicans.

 

Nexus Services CEO calls state AGs’ lawsuit ‘a form of retaliation’

Nexus Services Inc., the bonding company being sued by the states of Virginia, Massachusetts and New York, responded Friday with accusations of its own. In a statement, Nexus CEO and President Mike Donovan said that the state attorney generals’ allegations that the company financially preyed on immigrants held in federal detention are “offensive, 100% false and detrimental.”

Donovan said in the statement that he believes that the three attorneys general and the federal Consumer Financial Protection Bureau, which filed the civil suit in the U.S. District Court for the Western District of Virginia last month, sued the company “as a form of retaliation” after Nexus subsidiary Libre by Nexus filed suits against Virginia, New York and Massachusetts “to ensure the rights of prisoners.” Libre by Nexus also successfully sued CFPB in 2017 to suspend its investigation of Nexus.

Nexus, founded in Augusta County in 2013, is now legally based in Atlanta but its founders are residents of Fishersville and its principal place of business is in Verona, according to the complaint.

Donovan said in a statement released in February that “while the federal government continues to detain scores of immigrants, the AGs have ignored the fact that these detention centers operate within their own borders. From Buffalo, [New York], to Farmville to Suffolk, [Massachusetts], immigrants are tortured while Herring, [New York Attorney General Letitia] James and others conduct a shadowy investigation into the only company helping the immigrants they claim to be protecting.”

The company seeks to have the federal suit dismissed, according to documents filed with the court.

Libre by Nexus also announced Friday it has set up toll-free hotlines in the three states so callers can report “abusive government agents and policies” and have their claims reviewed by legal counsel.

On Feb. 22, Virginia Attorney General Mark Herring joined the attorneys general of New York and Massachusetts and the CFPB in suing Nexus and its Libre subsidiary, along with its co-owners, Chief Financial Officer and Executive Vice President Richard Moore, Nexus Services Director Evan Ajin and Donovan. The suit alleges they violated the federal Consumer Financial Protection Act of 2010 and “engaged in deceptive and abusive acts or practices in connection with Libre’s offer of credit to consumers for their immigration bonds,” and that Nexus and the three individual defendants “knowingly or recklessly provided substantial assistance to Libre in its deceptive and abusive acts or practices.”

Libre by Nexus offers to pay for customers’ immigration bonds to secure their release from government detention centers while they are being held by the U.S. Immigration and Customs Enforcement system. The attorney generals’ lawsuit allegations include that Nexus charged “large upfront fees and hefty monthly payments while concealing or misrepresenting the true costs of its services,” including $420 monthly payments for GPS ankle monitors that didn’t work since February 2018. According to the company, the GPS monitors were phased out in 2020, and instead customers are tracked with the use of an app downloaded to their smartphones.

Also, according to the suit, “from at least 2014 until at least late 2017, Libre used a multipart, written client agreement of over 20 pages, all written in English except for a single page written in Spanish,” although “the vast majority of Libre’s clients and their co-signers are Spanish speakers, most of whom do not read or write English and many of whom cannot read or write in any language.”

The states and CFPB filed 17 counts against the company in the February suit and asked the court to award Virginia up to $2,500 per violation, as well as $1,000 per violation in legal fees, along with other damages and restitution.

Libre, in a response to the suit filed earlier in March, argues that in earlier suits filed by Libre customers, “every time a Libre program participant has testified under oath regarding allegations of consumer fraud, three different, well-respected arbitrators (one a former judge) concluded that zero fraud took place.”

In December, the Virginia State Corporation Commission ordered that Libre by Nexus pay $425,000 to settle the state’s Bureau of Insurance’s investigation into the company, which was accused of acting as an unlicensed insurance agent. Libre is under investigation by at least nine other state or federal agencies, including the U.S. Justice Department.

“Libre by Nexus is hopeful that this baseless lawsuit will bring the real issues of detaining immigrants into the light and pledges to keep helping those who are being unfairly and egregiously detained, tortured and separated from their families,” the statement said. A hearing date has not yet been set.

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State reaches $39.3M settlement with defunct Keysville tobacco company

Twenty-three years after the landmark Tobacco Master Settlement Agreement was reached, defunct Keysville tobacco company S&M Brands Inc. has settled with Virginia for nearly $40 million, the attorney general’s office announced Wednesday.

S&M Brands, the makers of Bailey cigarettes and other products, closed in 2019. It was started in 1995 by father and son Mac and Steven Bailey, part of a longtime family business growing and brokering tobacco in Charlotte County dating back to 1860. In November 1998, the four largest U.S. tobacco product manufacturers — Virginia’s Philip Morris Inc., R.J. Reynolds, Brown & Williamson and Lorillard — entered into the master settlement agreement with 46 states, the District of Columbia, Puerto Rico and four U.S. territories.

Under the agreement, the states settled their Medicaid lawsuits against tobacco manufacturers in exchange for the companies stopping certain marketing practices and paying annual compensation to the states for medical costs stemming from smoking-related illnesses. In subsequent years, other tobacco companies entered the agreement, but S&M Brands did not do so, leading to this year’s settlement.

The defunct company’s recent deal with the state (along with other states, including North Carolina and Kentucky) required it to pay $39.38 million into the Virginia Health Care Fund, according to the attorney general’s office. Under state law, the company had been required to make regular deposits based on statewide sales into an escrow account, funds that usually can be returned to companies after 25 years, except for any money awarded in suits against them. However, the 2021 settlement assigned the rights of S&M’s escrow funds to the state and prevents the company from suing later over the return of the money, the attorney general’s statement says.

Although 40% of Virginia’s $4 billion in original tobacco settlement funding went into the health care fund, part of the money has gone toward economic development efforts in Southern and Southwest Virginia communities that were the heart of the state’s tobacco-growing region. The Tobacco Region Revitalization Commission was founded after the 1998 settlement and has allocated nearly $1.2 billion in grants for businesses in the region, as well as $309 million in indemnification payments for tobacco growers and quota holders. A smaller percentage of Virginia’s MSA funds is earmarked for youth tobacco-use prevention initiatives carried out by the Virginia Foundation for Healthy Youth.

“With this settlement, almost $40 million has been transferred into the Virginia Health Care Fund where it will be used to help the people of the commonwealth who truly need it,” Attorney General Mark Herring said in a statement. “I want to thank my team for all of the hard work that they put into reaching this substantial settlement with S&M Brands.”

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Virginia, other states sue Augusta County company Nexus Services

Updated 3:30 p.m. Feb. 22

Virginia Attorney General Mark Herring joined Massachusetts and New York in suing Virginia-based bonding company Nexus Services Inc., alleging in the suit that its Libre by Nexus subsidiary “preys on consumers held in federal detention centers by offering to pay for consumers’ immigration bonds to secure their release.”

In exchange for those services, the suit alleges, “Libre demands large upfront fees and hefty monthly payments while concealing or misrepresenting the true costs of its services.”

Joined by the Consumer Financial Protection Bureau, the three states filed suit Monday against the company, the Libre subsidiary and its co-owners, CEO Micheal Donovan, Chief Financial Officer and Executive Vice President Richard Moore, and Nexus Services Director Evan Ajin, in the U.S. District Court for the Western District of Virginia. The suit alleges they violated the federal Consumer Financial Protection Act of 2010 and “engaged in deceptive and abusive acts or practices in connection with Libre’s offer of credit to consumers for their immigration bonds,” and that Nexus and the three individual defendants “knowingly or recklessly provided substantial assistance to Libre in its deceptive and abusive acts or practices.”

In a statement issued Monday afternoon, Donovan said, “Libre by Nexus categorically denies all allegations in the complaint filed against the company today and looks forward to our day in court.” The company, he adds, “is committed to fighting for immigrants scarred by the torture of ‘civil’ immigration detention. While we have fought to release tens of thousands of immigrants from detention, especially during the last four years, the AGs have taken time and money to investigate our company. These same AGs have defended their police and prison guards in abuse cases, some of which have been funded by Libre. The result of their years-long investigations is a poorly drafted complaint that rehashes allegations the company has successfully defended in three different legal actions. They are still defending the corrupt prison guards.

“While the federal government continues to detain scores of immigrants, the AGs have ignored the fact that these detention centers operate within their own borders. From Buffalo, [New York], to Farmville to Suffolk, [Massachusetts], immigrants are tortured while Herring, [New York Attorney General Letitia] James and others conduct a shadowy investigation into the only company helping the immigrants they claim to be protecting,” Donovan’s statement says. He adds that the company funded lawsuits against Virginia on behalf of prisoners’ rights. “Libre is proud of its work and believes sunlight is the best disinfectant. We plan to vigorously defend this suit and prevail at trial.”

Nexus has been based in Atlanta since 2019, but its founders are residents of Fishersville and its principal place of business is in Verona, according to the complaint. Since its founding in Augusta County in 2013, the company has drawn considerable scrutiny from multiple states, which accused it of taking advantage of immigrants caught in the U.S. Immigration and Customs Enforcement system and their family members. As of late last year, the U.S. Justice Department and several other federal and state agencies were investigating the company.

The company worked with bail bond agencies to pay bonds on immigrant clients so they could leave federal ICE custody, using GPS ankle monitors to insure their clients would appear in court. Clients of Libre by Nexus paid $420 per month for their monitors, although in June, the company announced it would switch from ankle monitors to a mobile app on clients’ phones, after a client in Florida died of COVID-19 in a hospital while still wearing a monitor.

According to the suit, “from at least 2014 until at least late 2017, Libre used a multi-part, written client agreement of over 20 pages, all written in English except for a single page written in Spanish,” although “the vast majority of Libre’s clients and their co-signers are Spanish speakers, most of whom do not read or write English and many of whom cannot read or write in any language.”

In December, Nexus settled a case with the state’s Bureau of Insurance, which claimed that Libre was acting as an unlicensed insurance agent, by agreeing to pay $425,000 and limiting its ability to collect monthly fees in Virginia. In November, the company reached a $5.5 million settlement with the California Department of Insurance.

The suit filed this week alleges that Nexus Services and Libre by Nexus are not licensed bail-bond agents in any state; according to news reports, founders Donovan and Moore, who are married, were convicted of writing bad checks and are not eligible to become bail bondsmen. They previously worked as lobbyists in Richmond representing the bail bond industry.

The suit also alleges that because immigration cases can languish in court for an average of three years, “Libre’s clients may have to make $420 monthly payments for that long, or longer,” incurring up to $17,000 in fees. Also, the company’s written agreement misleads clients to believe nonpayment will lead to re-arrest or other consequences, the suit says, even though “neither ICE nor any other agency is a party to Libre’s agreement.”

Further, since February 2018, “Libre has not provided any GPS monitoring service to thousands of consumers … because Libre’s GPS vendor cut off Libre’s remote access to the monitoring software at that time,” the suit says. The following month, the vendor decommissioned all of Libre’s monitors, due to delinquent payments, according to the complaint.

CFPB, Massachusetts, New York and Virginia have filed 17 counts against the company and asked the court to award Virginia up to $2,500 per violation, as well as $1,000 per violation in legal fees, along with other damages and restitution. The plaintiffs also seek to “enjoin defendants from making material misrepresentations … and engaging in other deceptive, abusive and unlawful conduct alleged in the complaint.”

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