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NY Firm Sees Fees Bid Slashed in Fight Over Rejected Will By Mark Fass Imprisoned Pol Surrenders His Law License for Five Years By Julie Kay Jenne's attorney, David Bogenschutz of Fort Lauderdale, Fla.'s Bogenschutz & Dutko, said that Jenne agreed to the suspension as a compromise. The Florida Bar had sought permanent disbarment. Palm Beach, Fla., acting Circuit Judge Paul Moyle — the referee in the case — signed off on the agreement on Friday. Now the Florida Supreme Court must approve it. Jenne, 61, was sheriff for nearly a decade and a former Democratic state senator. A lawyer by training, he was one of the most powerful figures in the state when he was indicted by a federal grand jury for allegedly accepting more than $150,000 in improper payments from Sheriff's Office contractors. Jenne pleaded guilty last
September to one count of mail-fraud conspiracy and three counts of
income tax evasion. He is serving a one-year sentence at a Virginia
penitentiary and is scheduled for release in September. By Brenda Sapino Jeffreys A former paralegal at Houston lawyer Richard Laminack's current and former firms alleges the prominent plaintiffs lawyer is a "sexual predator" who once offered her $15,000 to stay with him in a hotel room in Las Vegas over a weekend and once suggested she perform a sexual act on an expert witness to improve his mood and testimony. Defendants in the suit Angela Robinson filed in state district court in Houston on July 25 are Laminack; his current firm, Laminack, Pirtle & Martines; and the O'Quinn Law Firm, formerly known as O'Quinn, Laminack & Pirtle in which Laminack was partner.Robinson, a Magnolia, Texas, woman who worked on fen-phen litigation while employed at the firms, alleges the defendants engaged in mail fraud under 18 U.S.C. §1962 for mailing settlement statements to fen-phen clients that contained overcharges for medical records. Robinson alleges "firm employees would order fictitious medical records" for clients from health care providers that had never treated those clients, and then the firms added $100 to $150 to the expenses deducted from the clients' portion of their fen-phen settlements for those "fictitious medical records." Robinson alleges she told Laminack of the "unlawful scheme to defraud thousands of fen-phen litigation clients" but he "told her to be quiet and not inform anyone of this" and he directed the firms to mail the settlement statements containing the charges. She alleges she was wrongfully terminated under the Texas Supreme Court's 1985 opinion in Sabine Pilot Services v. Hauck for failing to commit an illegal act. Robinson also brings battery and intentional infliction of emotional distress causes of action alleging she was subject to a hostile work environment. She seeks unspecified actual and punitive damages. "No cause of action under or alleging Title VI of the Civil Rights Act of 1964, 42 U.S.C. §2000e, or Chapter 21 of the Texas Labor Code is being asserted at this time against any defendant," she writes. Robinson, who alleges she worked under Laminack's supervision at O'Quinn Laminack and at Laminack Pirtle from May 2002 until her "wrongful termination" on April 14, 2008, seeks unpaid overtime wages under the Fair Labor Standards Act totaling $27,500, plus an equal amount in penalties, plus attorney fees and costs. Laminack, managing partner of Laminack Pirtle, could not immediately be reached for comment. But Houston lawyer Dale Jefferson, a partner with Martin, Disiere, Jefferson & Wisdom, who represents the O'Quinn Law Firm, says the mail fraud allegation is "completely false." As to the allegations of a hostile work environment at O'Quinn Laminack when Laminack was working there, Jefferson says Robinson never made a complaint under the firm's sexual harassment policy. In 2006, Laminack and Thomas Pirtle left O'Quinn Laminack to form Laminack Pirtle. "When all the facts come to light, I sure hope the actual facts are reported with the same intensity as the alleged facts contained in the petition," Jefferson says. Robinson's attorneys, of counsel Spencer Markle and partner Andrew McKinney IV of Houston's McKinney & Cooper, could not immediately be reached for comment. NY Firm Ruled Liable for Florida Firm's Foulup By Joel Stashenko
Flip-Flopping Disbarred Lawyer Pleads Guilty By Vesselin Mitev Joseph C. Levine had a plea deal revoked in February after one of his victims implored County Court Judge John Kase to "not allow Mr. Levine to con you the way he conned me" and give him a longer sentence than one-to-three years behind bars. Judge Kase offered Mr. Levine the option of either taking a new deal of three to nine years or withdrawing his guilty plea and going to trial. In March, Mr. Levine opted to withdraw his guilty plea and go to trial. He changed course yet again yesterday by accepting the three-to-nine year deal. Sentencing is set for August 29 GC
Apologizes for Saying Judges By Alana Roberts Grimsley pleaded guilty to two Florida Bar grievances April 25, and the Florida Supreme Court has approved the unconditional plea and consent judgment for discipline. Under the judgment, Grimsley wrote a letter of apology to the Daily Business Review for his inappropriate comments about judges and admitted a 2006 drunken-driving arrest. The date of Grimsley's reprimand by the Bar's board of governors has not been set. He must undergo a medical evaluation by a doctor who specializes in substance and alcohol abuse and comply with any treatment recommendations. He also must pay $1,371 in costs. Grimsley, who remains with the company, declined to comment beyond his letter to the Daily Business Review. United Automobile Chief Executive Officer Richard Parillo Sr. issued a statement saying the company "regrets the entire incident resulting in the Florida Bar reprimand issued against Mr. Grimsley." Parillo distanced the company from the comments but also criticized Florida law for allowing abuse in insurance claims. "His frustration with a legislative system widely known to condone abuse unfortunately caused him to express thoughts and ideas that were misdirected," Parillo's statement said. The firm's outside attorney Carlos Lidsky declined to comment. In the June 17 apology letter, Grimsley acknowledged making an inappropriate comment about judges but claims he immediately asked to retract it. The Daily Business Review disputes that contention and stands by its story. "Irrespective of how it happened, the fact remains that I should never have made such a statement that was clearly derogatory toward the judiciary in direct violation of several rules of professional conduct," Grimsley's letter stated. He was quoted in the article about United's efforts to fight fraudulent and excessive claims for personal injury protection coverage in car accidents. Company leaders and others alleged PIP encourages fraud by lawyers, medical providers, policyholders and others, increasing pressure for higher rates. Grimsley didn't single out any judges, but the company had aggressively been targeting Miami-Dade County Court Judge Jacqueline Schwartz to get her removed from all of its cases for alleged bias. The article also noted United had contentious lawyer fee hearings before both Schwartz and County Judge Lawrence King. Miami-Dade Circuit Court spokeswoman Eunice Sigler said Judges King and Schwartz declined to comment on the disciplinary action. Grimsley complained in the article about the rates of summary judgments granted by judges compared with the company's success before juries and concluded, "I think the judges are being paid off, but I can't prove that." In a follow-up article, he groused about judicial hostility and the role of campaign contributions, but he added, "I don't think there's any money changing hands." Former Dade County Bar Association President Merrick Gross wrote a letter to the editor criticizing Grimsley and the Daily Business Review for publishing his "scandalous and unsupported quotation." United distanced itself from Grimsley's comments. Lidsky, a partner in the Hialeah, Fla.-based law firm of Lidsky Vaccaro & Montes, said at the time that his firm hand-delivered an apology letter to King. Grimsley's letter to the Daily Business Review was on the letterhead of Charles J. Grimsley & Associates of Miami Gardens and listed a phone number that reaches United's claims switchboard. Disbarred
NY Lawyer Admits By Daniel Wise A disbarred Westchester County lawyer has admitted in court that he stole $310,000 from his grandparents. Chase Caro of White Plains pleaded guilty yesterday to grand larceny and has been sentenced to 2 1/2 to 7 1/2 years in prison by County Court Judge Susan Cacace. A spokesman for Westchester District Attorney Janet DiFiore said Mr. Caro, 49, admitted stealing money meant for his grandparents' trust fund. He already had pleaded guilty to another theft of more than $470,000 from another elderly client. He was sentenced to 2 to 6 years on that count. Mr. Caro agreed to pay restitution of $1.1 million, which also includes funds from a third theft. His sentences will run at the same time. Mr. Caro, who was disbarred in November, is the son of Robert Caro, the Pulitzer Prize-winning biographer of Robert Moses and Lyndon Johnson. The Associated Press contributed to this report. BigLaw
Partner Should Face Criminal Charges New York Lawyer Criminal Charges Against
Pillsbury Partner Called for in SonicBlue Bankruptcy By Niraj
Chokshi The motion for referral accuses William Freeman, a partner in Pillsbury Winthrop Shaw Pittman's Los Angeles office, of failing to disclose payments the firm received that allegedly affected its status as a disinterested party in representing electronics maker SonicBlue in its bankruptcy. "[T]he conclusion Mr. Freeman willfully perjured himself ... has now become utterly inescapable," wrote William McGrane, an attorney with Bay Area firm McGrane Greenfield. He filed the motion last Friday on behalf of his client, SonicBlue Claims -- created to buy creditors' claims against SonicBlue. "These actions are very rare," said Jesse Fried, co-director of the Berkeley Center for Law, Business and the Economy. Freeman and Craig Barbarosh, a partner in the firm's Orange County office, were kicked off the case one year ago when San Jose Bankruptcy Judge Marilyn Morgan found they failed to disclose a letter promising investors payment even if SonicBlue filed for bankruptcy. The firm was accused of a second major disclosure failure in November and then again recently. McGrane accuses Freeman of knowingly failing to disclose receipt of preference payments made on account of antecedent debt -- payments in the 90 days leading up to SonicBlue's Chapter 11 bankruptcy filing. All parties hired in a bankruptcy are legally required to disclose any existing connections with debtors, including preference payments. Before the company filed for bankruptcy, a retainer account was set up which SonicBlue replenished periodically, according to the filings. The firm withdrew payment from the retainer under the impression that it did not technically constitute payments on account of antecedent debt. However, McGrane said, in a February 2005 e-mail to Barbarosh, Freeman wrote, "[t]he firm has major exposure here." One week later, Freeman e-mailed Barbarosh the proposed text of an e-mail to the head of the official creditor's committee explaining the retainer account. "We're going to get fucked ... I'm very uncomfortable," Barbarosh responded. "We have no chance of success," Freeman replied. "Embarasses [sic] to put my name on this letter." A firm associate was asked to look into the payments. In an April memo, the associate wrote, unless the court could be convinced otherwise, "it is clear that we did receive payments on account of antecedent debt." McGrane accuses Freeman of deliberately withholding that information from the court in declarations related to his application to be employed as counsel for SonicBlue in the bankruptcy. "How sad, and how absolutely criminal, all this misconduct ultimately was," McGrane wrote in the recent filing. Freeman did not return calls seeking comment on Thursday. "We have received and reviewed the pleading in question," said John Grenfell, a San Francisco partner with Pillsbury who is representing the firm along with its outside counsel. "We think it has no merit. And we expect to file a response to it by April 7." According to a response the firm filed in February, the creditors committee investigated the payments and "concluded 'that no such payments constitute avoidable preference payments.'"
New Kind
of Jailhouse Lawyer: By Ryam J. Foley MADISON, Wis. - A former state senator convicted of accepting kickbacks could practice law again soon after the state Supreme Court declined Wednesday to revoke his license. Gary George, a Milwaukee Democrat who served in the Senate for 23 years, was convicted in 2004 on a charge of accepting monthly cash payments that flowed from a nonprofit group that received state funds. He was sentenced to 48 months in prison. In a 5-0 decision on Wednesday, the Supreme Court rejected a recommendation from state regulators that George's license be revoked for misconduct. The court said a suspension of four years and three months is enough punishment and perhaps the longest ever imposed in Wisconsin. The court applied the punishment retroactive to March 2004, when his license was suspended. That means George could be eligible to practice again as early as June. The court said George's misconduct was extremely serious but disbarring him would be too harsh. The court noted his long public service, previously clean disciplinary record and prospects for rehabilitation. The court ordered George, who has completed his prison term and is living in Milwaukee, to pay the cost of more than $14,000 for the disciplinary proceedings. George's attorney, Mark Hazelbaker, called the decision "a significant victory" for his client. George wants to return to work as a lawyer so he can pay a $568,000 restitution order, he said. "Gary acknowledged that he made some very serious mistakes and knew he was going to face the severest of discipline," Hazelbaker said. "But throughout the whole process he was hoping to have a chance to practice law again and ultimately be able to redeem himself." George pleaded no contest to his role in a kickback scheme involving Opportunities Industrialization Center of Greater Milwaukee, which had contracts worth $40 million per year to administer the state's welfare-to-work program. The nonprofit group paid a monthly retainer to attorney Mark Sostarich, typically about $5,800. Sostarich would then send up to $4,670 to George, who performed no legal work in exchange for the payments. The group also "invested" $200,000 of an affiliate's money in a corporation controlled by George's family. In all, George received $400,000 from the group. He also admitted that he used legislative staffers to perform personal work for himself and his campaign. Regulators asked for George's license to be revoked because his "conduct involved criminal behavior and dishonesty and a violation of public trust," said William Weigel, a lawyer for the Office of Lawyer Regulation. But he said he respected the court's suspension and the effect was little different. Lawyers whose licenses are revoked can petition for reinstatement after five years. The court's order allows George to start that process April 1 instead of later this year or early next year, Weigel said. George will still have to prove that he is fit to practice law before he is reinstated, during a "rigorous process" that can take up to one year, he said. Justices David Prosser and Louis Butler recused themselves from the case. Prosser served with George in the Legislature. Butler, who is facing a tough challenge for a 10-year seat on the court in the April 1 election, did not give a reason. Witness's
"Amnesia:" $500,000; New York Lawyer Defense attorneys say investigators misunderstood taped phone conversations. Lawyers for executive Lance Poulsen were beginning their case Monday after the government spent a week playing taped phone calls and meetings for a federal jury. Poulsen goes on trial in August on multiple charges of conspiracy, securities and wire fraud and money laundering. The government alleges he misled investors about unsecured loans his company was providing health care companies such as hospitals and nursing homes. Before that trial, he is defending himself against charges that he and longtime acquaintance Karl Demmler, a Columbus bar and restaurant owner, teamed up to persuade the witness to help Poulsen beat the fraud case against him. Poulsen is founder and former chief executive officer of National Century Financial Enterprises, once described as the country's biggest health care financing company. Poulsen said on a tape played Friday that the government's star witness should explain that her previous statements to prosecutors were based on old facts. Poulsen said the witness should say, "But now, there is a new set of charges and it's a new indictment and I'm not familiar with it," Poulsen said on the recording. Prosecutors say the witness, Sherry Gibson, a former National Century executive vice president was promised $500,000 if she could "have amnesia" when it came time to testify. On Friday, Poulsen attorney Peter Anderson suggested telephone conversations between Demmler and Poulsen were harmless because they corresponded with trips that Poulsen, living in Florida, was about to make back to Columbus. Jeffrey Williams, an FBI agent who led the investigation, disagreed, saying records indicated dozens of phone calls back and forth between the two at several different times last year. Gibson pleaded guilty in 2003 to a lesser charge of securities fraud in exchange for helping prosecutors.
He Was Just Trying to Settle Case New York Lawyer MANCHESTER, N.H. (AP) - A lawyer who says he was just trying to settle a case has been convicted of extortion. Daniel Hynes of Manchester told a Concord hair salon to pay him $1,000 15 months ago or face a lawsuit because its different prices for men and women were discriminatory. In one court document, he said the unequal prices at Claudia Lambert's salon caused him mental anguish. That's even though the salon charged women more than men. This week, a Manchester District Court jury convicted him of theft by extortion, a misdemeanor. Hynes, 27, said he plans to appeal. "The conviction goes against the First Amendment," he said. "People have a right to petition the courts." Asked why he contacted the salon directly, he said he was seeking "as amicable a resolution as possible." Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state. The one to Claudia's said haircut prices should be based on the time required or the length of the customer's hair, not gender. "I demand payment in the amount of $1,000 in order to avoid litigation," he wrote. Lambert's husband, Ben Nardi, contacted authorities, who arrested Hynes when he came collect $500. A jury deliberated for about 90 minutes Wednesday before convicting Hynes, who was represented by a public defender. He faces up to a year in jail and a $2,000 fine. He started practicing law in New Hampshire a month before sending the letter to Claudia's. The state Supreme Court committee the handles misconduct by lawyers probably will review the case, said Richard Uchida, a former member of the committee. NY
Government Lawyer Fired for Running By The Associated Press State Inspector General Kristine Hamann says Christine Timber, 58, of Albany, had also been reprimanded in 1994 for conducting business for her private practice while at her state job. She resigns effective June 8, 2008. Ms. Timber earned about $100,000 a year in her state job. Department of Labor policy prohibits employees from engaging in any outside business or activity while they are working. Ms. Timber did not immediately return a message left at her home in Albany. Judge Faults NY Firm's "Frivolous" Pursuit Of Case By Vesselin Mitev Chase Bank Sues Law Firms Claiming Debt-Relief Scam By Bud Newman MIAMI - Chase Bank USA is suing two Coral Springs, Fla., attorneys specializing in reducing consumer debt and South Florida affiliates, claiming they are engaging in blatantly illegal and fraudulent practices. The federal suit filed Friday in Wilmington, Del., accuses Hess Kennedy Chartered, lawyer Laura Hess, Edward Kennedy, affiliated companies and others of using "an unlawful debt elimination scheme" relying on lawsuits challenging valid credit card charges. Attorney Jeffrey Campos of Coral Springs and the Legal Debt Center, which has the same Coral Springs address and suite number as Hess' law firm, also are named as defendants. In addition, attorneys general in Florida, North Carolina and West Virginia are looking into Hess Kennedy's operations, and the Florida Bar has moved to suspend Hess' license. The bank suit claims its credit card customers were urged to falsely claim nonexistent billing errors on monthly statements to avoid payment or have the debt erased. Nationwide, Chase said more than 3,800 credit card holders have used such tactics to avoid paying more than $25 million in legitimate debts. The Chase attorney who filed the suit, Beth Moskow-Schnoll in Wilmington, declined to comment. A spokeswoman for the bank declined to comment. The six-count complaint seeks injunctive relief and punitive damages to prevent the defendants from operating a debt reduction "scheme." The complaint claims "tortuous interference with contractual relations" between Chase and its customers, abuse of process, conspiracy and violations of Delaware trade practices and fraud laws. Chase is asking the court to declare that "billing error disputes asserted by Chase's card members who are represented or assisted by defendants are sham" claims. Chase also wants the defendants to notify "each card member whom defendants have previously advised, assisted or represented" that the disputes do not eliminate the obligation to pay outstanding debts. Calls to Hess, Kennedy and Campos were not returned. The first item that pops up in a Google search for Hess Kennedy refers to Hess Kennedy Co., an international law firm. Clicking on that reaches Laura Hess & Associates P.A. Hess and Campos are Florida Bar members, but Kennedy is not listed as a member of the Florida Bar. The Florida Bar filed a contempt petition Feb. 11 against Hess with the Florida Supreme Court, seeking a three-month license suspension. The petition noted the high court in 2005 "publicly reprimanded Hess and placed her on probation for three years," but eight new complaints were filed about her work during the probation period. In a statement dated Oct. 4 on the Hess Kennedy Web site, the company described itself as a law firm that "believes that integrity, honesty and values play a major role in the culture of a company." It said customers can "rest easy" when working with the firm. Florida Attorney General Bill McCollum hasn't been resting. His office filed a civil suit Feb. 21, claiming Hess Kennedy and its affiliates have bilked thousands of consumers by promising to reduce or eliminate out-of-control credit card or other debts for a fee. Fees appear to vary, according to several online complaints that customers posted about problems they had with the company. A Rhode Island man said Hess Kennedy charged him $700 but paid none of his credit card bills and his "credit rating has been destroyed by these people." A Minnesota woman claimed she was charged $500 for credit counseling and was referred to Hess Kennedy about getting a refund but concluded it was "a bunch of ripoffs." The North Carolina attorney general's office has filed a suit with allegations similar to the Chase action. The Better Business Bureau of Southeast Florida has received 140 complaints about the firm and given it a failing grade. The West Virginia attorney general's office obtained an injunction Dec. 14 barring Florida attorneys employed by Hess Kennedy from settling West Virginia consumer debts until they comply with a state investigation. The monthly service fee for debt settlement firms is capped at 2 percent of consumer payments in West Virginia, where state investigators say it appears Hess Kennedy has been charging more. The Chase and state suits make essentially the same claims. They say Hess Kennedy and the affiliated Consumer Law Centers in Boca Raton and Delray Beach, Fla., falsely told customers that their credit card companies had violated the federal Fair Credit Billing Act. The law firm or the customers then wrote letters to credit card companies disputing all charges. In a Feb. 21 news release, McCollum said Hess and related companies falsely told clients that they "did not have to pay creditors and creditors could not sue or otherwise take action against them" once the letters were sent to credit card companies claiming FCBA violations. Chase's federal court suit said defendants misled card members into believing they can stop payments on debts dating back years "until Chase investigates and resolves the purported 'billing error disputes' to their satisfaction." "Defendants' conduct is entirely in bad faith and serves no legitimate purpose," the Chase suit said. "Defendants' ulterior goals are to extract fees from card members who should be paying the money to Chase to satisfy their debts and to maliciously harass Chase in an improper (albeit unsuccessful) attempt to coerce the elimination of their clients' legitimate debts." Jailed Lawyer Faces More Heat From SEC in $1 Billion Scam By John Pacenti Federal authorities are not done with him yet, though. The Securities and Exchange Commission filed a complaint Feb. 15 against Ziegler and two other convicted Mutual Benefits officials: Raquel Kohler, the company’s chief financial officer, and Ameer Khan, former president and nominee shareholder of related company, Viatical Services. The complaints aim to bar the individuals from participating in any type of securities fraud in the future or face the possibility of criminal contempt of federal court. "We only have so many tools in our quiver and we felt this was an important complement to the criminal convictions," said Teresa Verges, assistant regional director in the SEC office in Miami. The way viatical settlements work is that life insurance policies for the dying and elderly are sold at a discount. Investors collect on the difference between the insurance payout at death and the purchase price. Mutual Benefits started failing when people started living longer than the company projected. In the end, the company became nothing but a shell for a Ponzi scheme, according to SEC investigators, with top company officials living in luxury while paying off early investors with money that arrived from later customers who were lured with promises of big returns. From 1994 to 2004, the company bilked more than 30,000 investors worldwide of $956 million. Last year, President Peter J. Lombardi was sentenced to 20 years in prison. Ziegler, Kohler and Khan each are serving five-year prison sentences. Lombardi agreed to pay $1.5 million to the receiver and a $6 million penalty to the SEC. "Ziegler was a substantial participant in the MBC offering fraud," the complaint reads. "He served as a primary securities regulator counsel for MBC." Ziegler falsified documentation in connection with the purchase and assignment of group insurance polices, according to the complaint. He then filed false reports with the state regulators. Kohler, according to the complaint, helped conceal the fraud and wired investor funds to accounts controlled by MBC's principals. "Kohler also participated in the preparation and filing of false and misleading information with state of Florida regulators to conceal the fact that a convicted felon with a disciplinary history was a controlling principal of MBC," the complaint reads. Khan tracked policies and performed post-investment services for MBC and "was well aware of MBC's misuse of investor funds and helped conceal the fraud," according to his complaint. The SEC has said the company really was run by Leslie and Joel Steinger, whom the SEC permanently barred from violating securities laws in 1998. According to the SEC, the Steingers and their relatives were paid $26 million in consulting fees from MBC. Now that is what is happening to Ziegler, Kohler and Khan. Both Kohler and Khan have agreed to terms with the SEC but Ziegler has yet to consent to judgment. The SEC is not seeking monetary relief because the defendants have been ordered to pay millions in restitution by the U.S. District Court. "It’s an important message to send given the roles," said the SEC's Verges. "If they ever violated securities law again, we can immediately apply to court for contempt and additional penalties. A judge can refer the matter to criminal contempt. "The complaint isn't good news for Ziegler if he ever wants to practice law again." Ziegler may reapply to practice law after his prison sentence is up, said Francine Walker, spokeswoman for the Florida Bar. "The process is fairly lengthy where the applicant has to prove rehabilitation under suspension," she said. "It's a process and not automatic." Walker said the new SEC
complaint will find its way into Ziegler's disciplinary file. She
said investigators will determine if additional action is required
against the attorney.
By Vesselin Mitev Anthony Galasso, the Long Island bookkeeper who stole more than $4 million from his brother's law firm, pleaded guilty last week to 22 charges, including two counts of grand larceny. In return, Mr. Galasso, was promised a term of 2 1/2 to 7 1/2 years in prison when he is sentenced on April 28. Mr. Galasso was arrested in January 2007 after the 22-count indictment was brought by the Nassau County District Attorney's Office. His brother, Peter J. Galasso, a partner in Galasso, Langione & Botter of Garden City, notified authorities after finding a client's escrow account depleted. In court last week before County Judge George R. Peck, Mr. Galasso admitted using client money to fund personal expenses, including private jet trips, a luxury car and tickets to shows and sporting events . Peter Galasso called the guilty plea a sign that his brother had "[run] out of options." The firm has filed a civil suit against Anthony Galasso and two of the firm's former banks, claiming the banks enabled the theft. Former In-House Lawyer Avoids Prison in FBI Fraud Case By Lynne Marek CHICAGO — A federal court in Chicago sentenced a former Siemens AG subsidiary attorney to four years of probation with electronic monitoring for her role in facilitating a joint venture fraud by the company in 2000 and lying to the FBI about the matter. The in-house lawyer, Ellen Roth, pleaded guilty last year to drafting documents that falsely represented a Siemens Medical Solutions USA joint venture as being a minority-owned business eligible to bid for a $49 million Cook County Hospital contract in Chicago when it was in fact not a qualified bidder. She ultimately admitted lying to the FBI on the eve of a trial in the U.S. District Court for the Northern District of Illinois. Federal prosecutor Barry Miller asked U.S. District Judge John W. Darrah at a hearing yesterday to impose the 60-month prison sentence suggested by federal sentencing guidelines, telling the judge that the public attention to the case would be a deterrent to other such conduct. While Darrah said he agreed that the case could serve as a deterrent, he rejected the recommendation for prison time. Roth's attorney Michael Monico told the judge that Roth simply hadn't had the strength to walk away from the fraud because she was the main breadwinner for her husband and children and the provider of healthcare benefits for the family. She had led an "unblemished life" up until the incident and was unlikely to ever appear again as a criminal defendant, he said. Roth, 62, told the judge that her conduct was "an aberration a terrible thing" for which she was embarrassed and remorseful. Monico, a lawyer with Chicago-based Monico, Pavich & Spevack, was pleased with the outcome, saying Darrah came to a "fair sentence." Roth must also pay a $12,500 fine, perform 200 hours of community service and continue counseling she has been receiving. "It was in keeping with the nature of the offense and the defendant's background," Monico said. Miller declined to comment. Daniel Desmond, another Siemens executive involved in the fraud who pleaded guilty to perjury, was also sentenced to four years probation and a smaller fine of $10,000. I llegal Bills: Lawyer Busted for CounterfeitingBy Amanda Bronstad New York Lawyer The National Law Journal February 27, 2008 LOS ANGELES — Federal immigration authorities have arrested a Los Angeles attorney, charging him with illegally selling hundreds of counterfeit Federal Reserve notes, some of which, if real, would have been worth $500 million. U.S. Immigration and Customs Enforcement (ICE) agents arrested Darrell Lee Johnson, 78, of the Law Offices of Darrell Lee Johnson, who is charged with possessing and attempting to sell fictitious financial obligations. Johnson has had his license suspended five times by the State Bar of California for failing to pay his membership fees and MCLE noncompliance. He also has received two disciplinary actions, most recently in 2006. ICE agents allege that Johnson, along with two other people previously arrested, marketed the fraudulent notes to investors nationwide. The agents seized 500 fraudulent notes from Johnson's law office, and from his residence, that had a 1934 issue date and depicted President William McKinley. The Bureau of Engraving and Printing's largest denomination printed for the public was a $100,000 Series 1934 Gold Certificate with a picture of President Woodrow Wilson. These notes, printed in 1934 and 1935, were used as transactions between Federal Reserve Banks. The investigation, which is ongoing, is being prosecuted by the U.S. Attorney's Office for the Central District of California, with assistance from the U.S. Secret Service. ICE is the investigative arm of the Department of Homeland Security. For prior articles click here
NY Lawyer Sees Plea Deal Unravel
After By Vesselin Mitev NY Lawyer Admits Stealing $2.1 Million By Anthony Lin A Manhattan lawyer has pleaded guilty to stealing $2.1 million in client funds from an escrow account. Real estate lawyer Ira L. Berman took money placed in his care as down payments on property sales and used it for his personal and office expenses. According to the Manhattan District Attorney's Office, which announced the guilty plea yesterday, at least eight people lost money that was placed in escrow with Mr. Berman for the purposes of consummating property sales primarily in Manhattan but also in Southampton, N.Y. Prosecutors said about $3.2 million is missing, though $1.1 million remains in the escrow account and will be distributed to Mr. Berman's victims. Mr. Berman, 66, has already been promised a sentence of three-to-nine years in prison on a charge of first-degree grand larceny. NY Lawyer Accused of Stealing $266,000 From Client By Daniel Wise The lawyer, Roger Cohen, 69, pleaded not guilty to one count of third-degree grand larceny and was released on $250,000 bail, according to the Westchester County District Attorney's Office. Mr. Cohen was accused of taking more than $294,000 from the proceeds of a real estate sale for his client, who owned a real estate investment company. The proceeds were supposed to have been placed in an Internal Revenue Services account to be established for the client, whose name was not released. When the client demanded the money's return, Mr. Cohen refunded only $28,671, according to prosecutors. NY Lawyer
Loses License for 30 Months By Daniel Wise The panel also found that the lawyer, Leah Larsen, 68, violated ethical rules by demanding an "exorbitant" fee not backed by time records and by pressuring her client to withdraw a complaint about the fee he had made to the Dutchess County judge handling the divorce. One judge on the panel, Justice James M. McGuire (See Profile), would have disbarred Ms. Larsen. But the majority, consisting of Justices Richard T. Andrias (See Profile), David B. Saxe (See Profile), Eugene Nardelli (See Profile) and John W. Sweeny Jr. (See Profile), found the suspension severe enough in view of Ms. Larsen's previously unblemished 28-year career. According to the opinion in Matter of Larsen, M-5004, Ms. Larsen had told her client, Conrad Tebbetts, that he could pay her with $40,750 from the proceeds of the sale of the divorcing couple's home. Justice James V. Brands had ordered the money be paid into Mr. Tebbetts' 401(k). Mr. Tebbetts suggested Ms. Larsen take only about $30,000 for the fee. Ms. Larsen then sent her client a one-page bill for $168,400, claiming 852 hours of work at $200 an hour without detailing her work, the decision reported. When Mr. Tebbetts wrote to Justice Brands to complain about the bill, Ms. Larsen threatened to collect the entire $138,000 balance due at an arbitration unless he withdrew his letter to the judge. Lawyer's
Bullying Secretary Over Weight Demands By Thomas B. Scheffey Russell is currently on leave from his firm, serving a home confinement sentence for his admitted destruction of a hard drive containing child pornography while working for a Greenwich church. The church's music director was implicated. Russell, a former Bronx, N.Y., assistant district attorney, pled guilty to a single count of obstruction of justice, and was spared prison time. Lamothe says Russell warned her at her first job interview that his law firm was in disarray and that he was a "yeller." Within a few months "he fulfilled his prophecy," with Lamothe resigning after the final outburst. During her course of employment, Russell said she had been a good employee, but harangued the 300-pound woman about her weight gain. She was diagnosed with uterine cancer in February 2006. She had diabetes and testified she was concerned about her ability to have a child. Russell told the court "it's none of my business," about her health problems, but allegedly ordered Lamothe to exercise daily, to walk from the train station, and, she says, "constantly belittled, berated and screamed at her in front of her fellow employees," wrote Gilardi in his Jan. 18 ruling. Russell allegedly told her to "move her fat ass," called her "fat" and threw objects at or near her. The alleged incidents of physical contact convinced Gilardi to issue the pre-judgment remedy. At one time a workman broke a light fixture in a stairwell and Lamothe called the building's management to clean up the debris. Upset, Russell allegedly grabbed her arm and brought her to the basement to get a vacuum cleaner. "When he couldn't open the basement door because the vacuum was in the way he pushed the door open, grabbed the vacuum, and threw it down the stairs, breaking it," Gilardi noted. He then allegedly took Lamothe nearby to the lobby of the Patriot National Bank and "in front of the bank tellers and customers yelled to ask if there was a dust pan or a broom" Lamothe could use, then made her go get them. On another occasion, Lamothe says she was outside smoking a cigarette, and Russell "came up and grabbed the cigarette out of her mouth and stomped it on the ground. He announced to everyone that she is '(expletive) sick' and told her that if he ever saw her smoking again she would be fired," Gilardi recounted. Russell conceded he might have told Lamothe she was sick because she was "fat," Gilardi noted, adding, "He said it was not beyond the realm of possibility that he told plaintiff she was 'retarded.'" Russell, a former member of the Connecticut Law Tribune's editorial board, is defended in this case by Lewis H. Chimes of New Haven, Conn.'s Garrison, Levin-Epstein, Chimes & Richardson. "I think, given the very low standard for a PJR in Connecticut, this wasn't a surprise, although I was surprised at the amount," Chimes said. "I think once the facts are known, it will be clear this is a garden variety workplace stress situation. [The tort of] Intentional infliction of emotional distress has a very high standard, and 90 percent of claims are not allowed." He added, "I don't think this case meets this threshold." Lamothe is represented by the five-lawyer New Milford, Conn., firm of Guendelsberger, Collins, Henry & Guendelsberger. Her lawyer, Rebecca E. Guendelsberger, said her client is currently employed in a Bridgeport law office. She said the judge, "obviously recognized that my client was hurt. This is something that no employee should have to experience, especially someone who works for an attorney." Disbarred
Lawyer Gets 41-Month By The Associated Press A federal judge has sentenced former Lafayette, La. attorney Mel Credeur to 41 months in a federal prison and ordered him to pay more than $769,000 in restitution. Credeur accepted a plea agreement last year and pleaded to one count of making false statements to a bank and one count of forging securities of private entities. He had been indicted in 2006 on charges that he lied to banks by asking for extensions on attorney-client lines of credit, even though he had already settled their cases. Prior to the plea agreement, Credeur also faced 23 counts of forging securities of private entities, stemming from allegations that he settled his clients' cases without their knowledge and then kept their settlements by forging their signatures. According to the plea agreement, Credeur faced possible fines of more than $1 million and up to 40 years in prison. U.S. District Judge Richard Haik on Tuesday sentenced Credeur to 41 months on each count to run concurrently and five years of supervised release afterward. Credeur was disbarred in
April 2007, according to a release from the Louisiana Supreme Court.
By The Associated Press A Memphis attorney who testified last year against a partner who stole from clients now faces accusations that he stole as well. Phoebe Copeland claims in a lawsuit that J. Richard Rossie stole more than $346,000 from her after she granted him power of attorney to handle her estate. Copeland hopes to block any settlement between Rossie and Darrelle Miller, another client who is suing the attorney, claiming Rossie stole more than $1 million from her. Rossie's attorney, James Wilson, could not be reached for comment on Thursday. Copeland's attorneys argue that a settlement with Miller would make Rossie insolvent and unable to pay Copeland. Chancellor Arnold Goldin has issued a restraining order temporarily preventing Rossie from distributing any money. According to a financial statement, Rossie is worth $3.85 million, but Copeland's attorneys say much of that is immune from judgment. Copeland is accusing Rossie of taking her money by writing at least 42 checks to himself between August 2000 and June 2007, using funds from the law firm's escrow account. He then deposited the money in personal accounts at various banks, the suit alleges. Rossie is a former partner of John Houser Parker who pleaded guilty last year to stealing nearly $2 million from clients and was sentenced to 22 years in prison. Rossie testified against Parker at a sentencing hearing. State prosecutor Steve Crossnoe would not say whether he is considering criminal charges against Rossie. Lawyer
Who Sexually Assaulted Five or More Minors By Amaris Elliott-Engel A former Philadelphia criminal defense attorney convicted of several sex crimes with minors, including an estimated five incidents in the Criminal Justice Center, was sentenced last week to serve 25 to 50 years in prison. Larry Charles, 50, was sentenced Thursday by an out-of-county judge, Berks Common Pleas Senior Judge Albert A. Stallone, for sex crimes between 1999 and 2007 related to six girls authorities said Charles raped, molested or groped. Charles pleaded no contest to crimes including rape, indecent assault and corruption of minors. He received consecutive sentences for the crimes related to each of the girls, including seven to 14 years for raping a 5-year-old girl. The girl was raped vaginally and anally in both a motel in New Jersey and a bank deposit room, said Jim Carpenter, the assistant chief of the Philadelphia District Attorney's Office's family violence and sexual assault unit. Authorities said Charles sexually abused the girls in both of his offices in Center City and Southwest Philadelphia, in the deposit rooms of banks, in the Criminal Justice Center (CJC) and in motels. The criminal case against Charles broke open when sheriff's deputies found him with a 14-year-old girl after engaging in sexual contact with her in a third-floor attorneys' lounge at the CJC on Martin Luther King Day 2007. Deputies began searching for Charles because they found it unusual that he was in the building on a public holiday with a young girl; Deputy Andrew Ortiz had to break down the door, and the girl was found cowering inside, Carpenter said. Charles was found naked. "We were very pleased with this sentence," said Carpenter, who prosecuted Charles. "It reflects the terrible damage he's done to these six girls. It also reflects his offense not only against his profession but against the courthouse where you seek justice and truth." In addition to the sexual encounter that the sheriff's deputies disrupted, Charles raped a 16-year-old in the rear room of the lawyers' lounge and also sexually molested a girl in the anteroom outside a courtroom and twice pulled girls onto his lap in the lawyers' lounge, Carpenter said. Charles' defense attorney, Angelo Cameron, had sought for Charles to be sentenced to five to 10 years in prison and supervised counseling. He wanted a "controlled environment and psychiatric treatment" for his client, Cameron said, "because pedophilia is a mental abnormality." Philadelphia Common Pleas President Judge C. Darnell Jones II said that after Charles was initially arrested, the Philadelphia Sheriff's Office, which controls security for the CJC, reviewed if more restricted access should be instituted for the building, but it was ultimately determined that attorneys do need to meet and work inside the CJC at varied hours. It also was decided that Charles' activities were an aberration so the sheriff's CJC protocols were found to be sufficient, Jones said. "It's one-in-a-billion for a lawyer to do something like that," Jones said. Two of the girls, and four of the other girls were from the same family, Carpenter said. "He basically used his influence and his status to gain the trust of families, particularly families in difficult circumstances, and then used that trust to isolate the girls, buy them things, use treats and to groom them for sexual contact," Carpenter said. He used force when the girls resisted, Carpenter said. Once the MLK incident opened up awareness into Charles' activities, some of the other victims came forward and law enforcement conducted an investigation, including verifying motel records and bank surveillance tape footage, the prosecutor said. Charles was ruled to be a sexually violent predator and a pedophile strongly attracted to both pre-pubescent and post-pubescent children during a Megan's Law hearing held before his sentencing, Carpenter said. Cameron has not discussed yet with Charles if he wants to appeal his sentencing. Charles will not be eligible for parole until he's 75, Carpenter said. Charles did have remorse for his actions, Cameron said. Charles agreed to an emergency suspension of his legal license after his arrest in January. Corporate
Attorneys Mull Meaning New York Lawyer Has the
indictment Tuesday of Mayer
Brown partner Joseph P. Collins sent "a chill down the spine" of
transactional lawyers everywhere, as Mr. Collins' defense lawyer
said it should? Solo
Faces 73 Criminal Counts for Leading 25-Year, By Amaris Elliott-Engel Personal injury attorney H. Allen Litt, 58, of Bryn Mawr, Pa., has been charged along with 14 others in a scam involving falsifying personal injuries from made-up or exaggerated slip-and-fall and auto accident cases and submitting fraudulent insurance claims, Philadelphia District Attorney Lynne Abraham said. Litt was charged with 73 criminal counts, including 31 third-degree felonies of insurance fraud and one first-degree felony of corrupt organizations. Litt, who was admitted to practice law in 1975, is accused of working with 100 runners who both located potential imposter claimants or posed as claimants, according to a grand jury presentment charging Litt and his co-defendants. The imposters would obtain medical care from physicians selected by Litt and rack up inflated medical bills via numerous visits to the Litt-selected doctors, the grand jury charged. Some claimants actually took falls or had an injury from another instance but still participated in a fraudulent fall or accident claim at the behest of the runners, the grand jury charged. Litt would file fraudulent insurance claims based on the doctors' bills and bogus photographs taken by the runners, the grand jury charged. Four runners alone brought in 300 claims for which insurance companies paid $2.5 million, according to the grand jury presentment. Runners received commissions for bringing in cases and for taking pictures of fraudulent accident scenes, the presentment charged. Abraham cited the Charles Dickens' story Oliver Twist about an orphan sucked into a crime ring and called Litt the equivalent of the story's Fagin, the Dickensian criminal mastermind. The 25 years of alleged fraud and "hundreds upon hundreds and hundreds of fake accidents" probably involved much more than the $2.5 million, Abraham said. Abraham's office plans to seek a judge's imprimatur on an exception to the statue of limitations in order to be able to prosecute Litt for more fraud-based charges. Litt was scheduled to be arrested at the office of his attorney, Marc Neff, at noon yesterday, Abraham said. A call to Neff's office was not returned. There was no answer at Litt's 1515 Market St. office. Litt also was charged with one first-degree felony count of conspiracy, 21 third-degree felony counts of theft by deception, 13 third-degree felony counts of attempted theft by deception, four counts of second-degree misdemeanor of false swearing, one first-degree felony count of dealing in proceeds of unlawful activities and one third-degree felony, count of criminal use of a communication facility. Litt could face up to 20 years in prison and a $25,000 fine for each first-degree felony, seven years in prison and up to a $15,000 fine for each third-degree felony, and two years in prison and up to a $5,000 fine for each second-degree misdemeanor. The grand jury evidence included testimony from three alleged runners for Litt: Lewis Crump, a North Philadelphia man who said he was in the "accident business," James "Big Frank" Guinn, a taxi driver who based himself at 27th and Tasker streets in South Philadelphia and Nathaniel Shaw, who said he was a real estate investor and landlord in North and West Philadelphia. All three men have already pleaded guilty to insurance fraud as part of plea bargains. They revealed Litt "relied on a stable of runners like themselves to recruit friends and family members who pretended to fall and faked injuries in order to file false insurance claims. He then paid the runners, usually between $100 and $1,000 per case," the grand jury charged. According to the grand jury presentment, the 132 claims brought by Shaw to Litt involved more than $1 million, and Shaw was paid $47,000. The 36 claims brought by Guinn to Litt brought in $100,000, and Guinn was paid $12,000, the presentment said. Crump allegedly brought 10 to 12 cases to Litt. The runners "worked on commission and they were more than happy to recruit," Abraham said. Shaw, who first met Litt when he was involved in a legitimate trolley accident, said Litt was aware the 132 cases he brought him were fraudulent, but Litt would pretend with these clients that he was not involved in the fraud, the grand jury charged. Litt, however, coached Shaw to choose accident sites that involved a cracked sidewalk or a broken step and no surveillance cameras; Litt also told Shaw to instruct the imposter claimants to go to an emergency room and complain of injuries from a fall, the grand jury charged. Shaw's imposter-accident recruits complained that Litt promised them big money if they made frequent appointments with the doctors he referred to them, but that their share of settlements were tiny, according to the grand jury presentment. Litt dismissed the complaints, the grand jury charged, and said: "Don't worry about it. They're not hurt anyway, and I got to pay the medical bills and got to pay the doctors." Iris Kurtz, the receptionist in Litt's office, testified that Litt directed her to improperly notarize releases of settlements without obtaining the signatures of the clients, the grand jury charged. According to the grand jury presentment, Shaw learned that an investigation was being undertaken of his and Litt's activities from two women he had recruited to take part in fraudulent claims. In response, according to the grand jury presentment, Litt got Shaw to obtain retraction statements from both women. Those statements were not submitted to the district attorney, but instead were turned over to an investigator and were introduced as evidence in front of the grand jury. Files were seized from Litt's office in December 2005, and Litt asked Shaw to contact the claimants involved in the cases in those files, but Shaw refused during a phone call with Litt, the grand jury charged. "In response, Litt announced, 'things are going to get ugly,' and hung up," according to the presentment. Guinn said that he drew claimants from 16 of his neighbors that he called the "Tasker Street Crew," according to the presentment. Guinn said he followed Litt's instructions to find holes in front of "well-off, but not too big, businesses" that didn't have a lot of attorneys to fight a case but would have more money to pay out than Chinese or Korean businesses, the grand jury charged. Abraham said that the investigation is continuing into at least 10 doctors that Litt allegedly referred fraudulent clients to. The investigation into Litt and his alleged cohorts began with an October 2004 tip from an insurance fraud investigator with Chubb Insurance Co., Abraham said. A search of Litt's office revealed hundreds of documents, including accounting file cards, canceled checks and accident scene photos, according to the grand jury's presentment. Litt was "really very helpful to us," Abraham said. "He kept great records." Linda Perkins, chief of the District Attorney's Office's Insurance Fraud Unit, said Litt is an exception to the rule and that most attorneys are honest and withdraw a claim for a fraudulent accident. Joshua Pitts, 63, of Philadelphia, was Litt's most active runner, according to the presentment. Over 400 checks totaling more than $190,000 were issued to Pitts from Litt, according to records seized from Litt's office, the grand jury charged. Pitts and three of his adult children were charged each with one count of insurance fraud and related offenses, according to the District Attorney's Office. Ten alleged co-conspirators, including Crump, Guinn and Shaw, have already been arrested. Some have pleaded guilty as part of plea bargains and have agreed to testify against Litt. Samuel Stretton, an attorney who writes an ethics column for Pennsylvania Law Weekly, The Legal's sister publication, and who often represents jurists in legal quandaries, said that Litt will most likely be able to continue practicing law pending the outcome of his court case. But the Disciplinary Board of the Pennsylvania Supreme Court can seek more immediate action on Litt's law license by requesting that a hearing be held on suspending Litt from practicing law on an interim basis, Stretton said. Attorney
Get 15 Years in Prison for New York Lawyer MIAMI -- Saying he would mete out a longer sentence if he could, U.S. District Court Judge Alan Gold handed down the strictest prison sentence possible under federal guidelines -- 15 years -- for one-time high-flying Miami attorney Louis S. Robles for bilking elderly clients out of more than $13 million. Gold had previously rejected a plea deal worked out for Robles by the U.S. Attorney's office that would have resulted in 10 years behind bars for the 59-year-old lawyer, saying it was too lenient. Besides serving 15 years in prison, Gold ordered Robles to pay $13.5 million in restitution and work 900 hours of community service in a nursing home. He must also relinquish his law license for good. The attorney represented more than 7,000 asbestos clients from the late 1980s through February 2003. Federal prosecutors said he operated an elaborate Ponzi scheme. Clients -- many elderly and dying -- would not be paid until he misappropriated money from other clients. Nearly 4,400 clients were defrauded, the government said. Robles pleaded guilty to three counts of mail fraud on Sept. 17 for misappropriating settlements in asbestos lawsuits, defrauding thousands of clients nationwide. He paid little or nothing to clients while living in the lap of luxury with two full-time servants, a private plane and a waterfront mansion on Key Biscayne. The lawyer "abused the special trust that his clients placed in him," U.S. Attorney R. Alexander Acosta said in a statement late Tuesday. "Robles sought out clients who were dying and cheated them out of millions of dollars, so that he could finance his own extravagant lifestyle." Attorney Indicted for Helping Clients Avoid $4.6M in Taxes By Shannon P. Duffy |
