Jack Boyajian was never licensed as a lawyer in New Jersey but for years ran a nationwide debt collection practice from Bloomfield and Rutherford, drawing more than 1,000 consumer complaints, 100 suits and at least 10 actions by state attorneys general against him.

He also racked up nearly $40 million in liabilities, which a bankruptcy judge has refused to discharge.

U.S. Bankruptcy Judge Morris Stern in Newark found on Jan. 31 that Boyajian failed to keep records as required by the Bankruptcy Code, which "grossly impaired the ability of the Chapter 7 trustee to perform his duties."

Boyajian, a "sophisticated and experienced businessman," was "driven by the specter of a longstanding federal tax lien, by unrelenting creditor and regulatory actions arising out of his nationwide debt collection activities and constantly reminded of the negative public view of all this jeopardy by bar examiners in a number of states, [to organize] his business and personal financial life in a thoroughly defensive manner."

Stern’s opinion in In re Boyajian, No. 09-32883/Stanziale v. Boyajian, No. 10-1065, granting a motion for summary judgment by the trustee, Charles Stanziale Jr., is a rare, precedential bankruptcy decision.

Boyajian was already engaged in debt collection and other businesses before graduating from Rutgers Law School-Newark in 1996. He had a 1982 bachelor’s degree in business and finance from the University of Pennsylvania’s Wharton School.

He told disciplinary authorities in California, the only state to grant him a law license — but where he is no longer allowed to practice — that the advantage of operating as a law firm was being exempt from certain state laws regulating debt collectors.

Boyajian sought admission to the bar in four states, including New Jersey, where he withdrew his application in 1999, after the Committee on Character and Fitness recommended against it based on complaints over his debt collection business, G&L Financial Services, and unpaid payroll taxes at another business, Far Hills Community Management.

The judiciary does not release such records, but a 2008 California ethics opinion quoted the New Jersey committee’s reasons: Boyajian’s "gross financial mismanagement, his lack of complete candor, and his failure to acknowledge responsibility for his acts and omissions."

New York denied him admission on the same grounds and Florida rejected his application because it was delayed.

California licensed him in 1999 but in April 2008, he was placed on involuntary inactive status, after a state bar court that handles ethics matters found he "poses a substantial threat of harm to the public."

The opinion described how Boyajian "leveraged his California law license" to collect more than 2 million consumer debts around the county through various law firms he operated.

The first was JBC & Associates, a California corporation with a Beverly Hills office.  He ran it out of a Bloomfield office and went to the West Coast once or twice a month for a few days.

The firm became JBC Legal Group and later, Boyajian and Brandon Legal Group, with the latter name change "at the behest of the New Jersey Attorney Ethics Committee," said the California state bar opinion.

In 2004, the firm had 75 employees, including three other lawyers, and derived almost 90 percent of its revenue from debt collection activities in at least 30 states.

Boyajian told the California authorities that as of 2004, the firm was sending 20,000 to 30,000 debt collection notices a month.

That same year, he launched Boyajian Law Offices, which he claimed was a separate operation meant to rely on a network of lawyers working in different jurisdictions.

He told the California bar authorities that he ultimately had about 30 "of counsel" attorneys working out of their own offices around the country while also part of his firm, "connected virtually through the Internet, with paralegal and administrative support available from the centralized operational center" in Rutherford.

The firm did real estate transactions, corporate litigation and entertainment law in addition to creditors’ remedies.

Boyajian and his firms were repeatedly accused of violating the Fair Debt Collection Practices Act (FDCPA), as Stern discussed in his opinion

Between 2001 and 2008, he was hit with more than 1,000 consumer complaints, many of them in New Jersey, and about 130 suits nationwide.

Attorneys general in Connecticut, Minnesota, West Virginia and New York brought enforcement actions, with cease-and-desist orders from six more.

Arkansas won a $194,000 civil penalty for 776 violations of its consumer protections laws and Stern exempted it from discharge, but the Arkansas Supreme Court overturned the verdict because lawyers there, as here, are not subject to such laws.

A 2010 consent decree with Colorado barred Boyajian from collecting debts there for five years and his supervising lawyer, Marvin Brandon, for life. Boyajian also had to pay the state $20,000, with an additional $180,000 amount suspended.

Judgments were obtained against Boyajian elsewhere and Stern mentioned that Boyajian does not dispute that he filed the bankruptcy case, in August 2009 "to interdict a scheduled deposition" in a Montana suit.

Boyajian blamed his bankruptcy on being overextended in real estate and the market crash.

Whatever the cause, Boyajian’s schedules showed more than $39.6 million in debt and no assets, said Stern.

He pointed out that despite the complexity of his affairs, Boyajian did not maintain a personal bank account between 2004 and 2012 or file personal income tax returns for 2006 through 2008 until December 2011.

He operated largely through family trusts, which he controlled as trustee, and lived in a Saddle River home bought by his wife and mother for $4.25 million in 2004 and signed over to a trust, with Boyajian as trustee.

Stern called Boyajian’s books and records "generally very poor" and in some cases, "virtually worthless," adding that Boyajian agreed they were "in shambles."

Stern concluded that Boyajian, "without justification, failed to keep or preserve adequate, recorded information" and would not be allowed to cure that failure with postpetition financial information, such as the more than 90 tax returns he turned over in April 2012, with figures differing from those Stanziale’s accountant was able to reconstruct or estimate.

Section 727(a)(3) of the Bankruptcy Code requires records sufficient to enable the trustee and creditors to understand the debtor’s financial condition.

Boyajian, reached in Allendale at the Hutton Group, which does coop-to-condominium conversions, referred a request for comment to his lawyer, Carlstadt solo William Rush, who provided a statement disagreeing with the opinion.

Rush blamed a chief financial officer for flawed financial records and said that Boyajian "made significant efforts to address the situation by engaging a professional accounting firm to prepare accurate financial statements and tax returns that were provided to the Trustee and the Court" and that the records prove discharge is warranted.

"Moreover, the Trustee has attempted to inject collateral issues into this case that are simply irrelevant" and Boyajian "denies any wrongdoing."

Stanziale, of McCarter & English in Newark, did not return a call.

An 88-count disciplinary complaint is pending against Boyajian in California.

In addition, Boyajian and Brandon received reprimands for breaching New Jersey ethics rules. Brandon’s, in 2008, was for allowing employees to threaten or harass debtors and otherwise violate the FDCPA, while Boyajian’s, in 2010, was for failing to properly supervise employees and allowing the firm to violate the FDCPA. •