A federal lawsuit in Camden seeks damages on behalf of a class of consumers who were the targets of efforts to collect so-called zombie debt.

LVNV Funding, Resurgent Capital Services, and 10 shell and holding companies face a putative class action in U.S. District Court for efforts to collect old and expired debts from consumers. The suit was filed in Superior Court in Gloucester County on Sept. 28 and removed to federal court Monday.

The suit says collection agencies are bringing a growing number of suits against consumers over zombie debts, which were once legitimate but have been paid off, settled, discharged in bankruptcy or rendered uncollectible by state statutes of limitations. The defendant debt collectors seek to obfuscate the fact that they are not legally entitled to bring collection actions against such debts, routinely giving false certifications that the collection actions are timely, according to the lawsuit.

The defendant companies are all tied to the Sherman Organization of Charleston, South Carolina, which comprises a complex web of shell and holding companies, according to the lawsuit. The defendants purchase delinquent consumer debt, but they routinely failed in their due diligence to confirm the true identity and contact information of the alleged debtor, the date the debt accrued, the date of last payment, whether the debt is time-barred, and whether the alleged debtor is legally responsible for the debt, according to the suit.

In many cases, the defendants sued to collect debts they are not legally entitled to, according to the lawsuit.

“The goal of this practice is to secure as many default judgments and settlements as possible against alleged debtors, the Class Members in this action,” according to the lawsuit, DeAngelo v. LVNV Funding.

Class representative Joseph DeAngelo is described in the complaint as “a classic zombie debt victim.” He was sued in Gloucester County Superior Court in 2009 by one of the defendants, Resurgent Capital Services, for a $28,382 debt he allegedly owed to CitiFinancial. DeAngelo claims he only owed a debt to CitiFinancial once, for a car loan he co-signed in the 1990s. The car was repossessed in 1999.

Resurgent alleged DeAngelo was served with the complaint at home at a date and time when he was at work, but his 12-year-old son was home, the lawsuit said. The affidavit of service did not provide any description of the person who was served, but a 12-year-old cannot accept, the suit said.

DeAngelo never learned of the suit, and a default judgment was entered for $29,647 in February 2010. DeAngelo first learned of the suit in 2017, when he received a wage execution notice. A motion to vacate was filed in February 2018, but the Sherman Organization presented accounting documents to support its false assertion that the debt originated in 2001 and DeAngelo’s last payment was made in 2008, for $1,000. No such payment was made by DeAngelo, the suit claims.

“The Sherman Organization, with the intent to defraud and deceive, manufactured an accounting printout purporting to show that the action was timely filed within the statute of limitations long after it had lapsed,” the lawsuit claims.

DeAngelo’s motion to vacate the default judgment against him was denied without prejudice.

The complaint cites a study that says inquiries to consumer agencies about efforts to collect zombie debts increased 66 percent in the first nine months of 2017 compared with the same period a year earlier.

Beside the 12 holding company defendants, the suit names six individual defendants, including Benjamin Navarro, the president and chief executive of Sherman Financial Group. ESPN called Navarro “a low-profile billionaire” in April when he was in the running to buy the National Football League’s Carolina Panthers, although the team was later sold to another buyer.

The Sherman Organization is no stranger to litigation. In 2014, the U.S. Court of Appeals for the Eleventh Circuit ruled in Crawford v. LVNV Funding that filing a proof of claim against a bankruptcy estate for a debt the creditor knows is legally unenforceable pursuant to the statute of limitations is unfair, unconscionable, deceptive, or misleading under the Federal Debt Collection Practices Act.

The suit seeks certification of a class of persons whom Resurgent or LVNV brought suit to collect time-barred debts and a subclass of persons who incurred costs in the course of defending against such suits.

The suit brings a claim under the Fair Debt Collections Practices Act, and a malicious use of process claim against defendants Resurgent Capital Services and LVNV Funding. The suit also brings a claim for vicarious liability against several Sherman Organization executives and other Sherman Organization holding companies.

The suit seeks to vacate default judgments against the plaintiff and class members that were entered as a result of the defendants’ unfair and unconscionable conduct and to restore any money class members paid in defense or settlement of time-barred claims that defendants unlawfully brought.

The defendants are represented by Stephen Orlofsky and Laura Vendzules of Blank Rome, who did not return calls for comment. Nick Larry of Benesch, Friedlander, Coplan & Aronoff in Chicago, who represents DeAngelo and the class, declined to comment. His co-counsel, Michael Kassak of White and Williams in Cherry Hill, did not return a call about the case.