Del. Stephen Heretick and Portsmouth judges diverted millions owed to sick and injured people

Category: Structured Settlements

Portsmouth judges rubber-stamped agreements that let out-of-state firms represented by a Virginia delegate buy millions of dollars worth of payments owed to sick or injured people, sometimes for a fraction of their value, according to a federal lawsuit.

Del. Stephen Heretick and his clients say the deals were legal, approved after court hearings held in accordance with state law.

But in the lawsuit, a Southwest Virginia man and his attorneys allege the large number of cases filed in Portsmouth and the scant court review they received show a conspiracy between Heretick and “complicit judges” who sometimes approved dozens of agreements on a single day.

The case revolves around selling structured settlement payments that let people collect lawsuit payouts over many years. Sometimes, however, recipients decide they don’t want to wait for their money.

That is where various companies – including several represented by Heretick – come in. They offer to buy some or all of the future payments in exchange for a smaller, but immediate, payment.

There are laws on the books to protect structured-settlement recipients from being taken advantage of. Before selling their payments, they must be advised in writing to seek independent professional advice, and a judge must determine the sales are in their best interest. But the suit claims Heretick, a Democrat who represents parts of Norfolk and Portsmouth, hatched a scheme to circumvent those safeguards with the help of multiple judges on the Portsmouth Circuit Court bench.

“The scheme evaded the state and federal requirements by creating what was, in name only, a judicial review process but which was, in reality, a rubber stamp for virtually every transaction brought,” the suit said.

No judges are listed as defendants in the lawsuit, which was filed in September in U.S. District Court for the Eastern District of Pennsylvania – where several of Heretick’s clients are based. On several occasions, however, the complaint mentions retired Portsmouth Circuit Judge Dean W. Sword by name.

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