Lead poisoning victims possibly targeted to sign over settlement funds

Decades before there was lead in drinking water in Flint, Michigan that poisoned kids, there was lead paint in homes
Decades before there was lead in drinking wat... 03:31

BALTIMORE --Lead poisoning can damage the brain for life. Courts recognize this in lawsuits by awarding victims settlements that pay out over decades. But a CBS News investigation looks at whether some finance companies target victims of lead poisoning and leave them penniless.

Thirty-one-year-old Crystal Linton was exposed to deteriorating lead paint starting at age three. She now suffers from irreversible brain damage.

Crystal Linton CBS News

"I was in special education for a few years. Trouble reading, writing. I can't remember everything."

A psychologist found she was left functionally illiterate with a fourth grade reading level. Her family sued two landlords, eventually settling for $630,000. Saul Kerpelman was their attorney.

"The reason we are giving them a settlement in the first place is that they have mental disabilities," he said.

In terms of managing money, Kerpelman says they just are not competent to do it.

To protect her future, the $630,000 was put into something called a "structured settlement," where she would get monthly payments over the next 40 years.

But then she started getting fliers in the mail offering quick cash from companies, including Stone Street Capital of Bethesda, Maryland. All she had to do was sign some papers and tell a judge why she wanted the money.

Crystal Linton began receiving flyers in the mail offering her quick cash CBS News

Over the next year-and-a half, she sold her payment stream -- then valued at $408,000 dollars -- for $66,000. Most of it went to Stone Street Capital.

Linton told CBS News she doesn't feel like she understood how it worked, and she essentially doesn't know how she signed her money away.

"It hurts," she said, crying.

"It's impossible that she was able to read and understand the documents that were given to her," Kerpelman said. "Literally impossible."

CBS News spoke to two dozen lead poisoning victims in Baltimore who sold their settlements to similar companies.

Earl Nesbitt CBS News

Attorney Earl Nesbitt is with the National Association of Settlement Purchasers, and represents some of those companies in court.

When asked if he thinks lead poisoning victims really understand what it is they're doing, Nesbitt said "I absolutely do."

He says people often need larger amounts of money quickly. "Maybe they want to send a kid to college or buy a home, put a down payment on a home."

We asked him about Crystal Linton's case. "Here's a woman who in her psychological exam, literally did not know which direction the sun rises. Does that case sound like a potentially problematic case to you?"

"Yes, very problematic. There is no doubt about it," Nesbitt responded. He said if he had met Linton, "I would have advised my client we can't go forward with this transaction."

But we found the company that did that transaction, Stone Street Capital, is one Nesbitt actually represents in Texas.

"All I can tell you is that should not have happened," Nesbitt said when questioned.

Stone Street told us they disclosed all terms, Linton testified that she needed the money to "keep her car and apartment," and the court approved the sale.

Crystal Linton says she now has no money and may soon be homeless.