Posts tagged as:

fraud

Horror story in Queens points up flaws of the city’s deed-transfer system, and also of its pro-tenant housing court regime: “After Darrell Beatty failed to appear in August, a judge approved an eviction, but it was stayed last week when Beatty claimed he had health problems.” [New York Post]

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After Wanetta Gibson falsely accused Brian Banks of rape (earlier), her family won a settlement in a civil suit against the Long Beach, Calif. schools; Banks himself, a former prep football star, served more than five years in prison. Now the school district has obtained a $2.6 million default judgment against Gibson, whose whereabouts are unknown. “According to the school district, the judgment recoups a $750,000 settlement paid to Gibson and also includes attorney’s fees, interest and $1 million in punitive damages.” [Long Beach Press-Telegram] Earlier accounts had erroneously reported that Gibson had been paid $1.5 million.

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If collecting workers’ comp payments premised on disability from knee and other injuries, it is best not to post photos on Facebook of your exploits continuing to race your BMX bike [Kent, Wash.; MyNorthwest.com]

P.S. You might face less scrutiny, per this L.A. Times account, if you’re a Los Angeles firefighter or police officer claiming injury on the job under a remarkably generous compensation scheme “that has cost taxpayers $328 million over the last five years.”

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Extraordinary sequence of events: “After winning a verdict of nearly $25 million in a federal trade secrets case earlier this year, Akin Gump Strauss Hauer & Feld has filed a motion to withdraw from its representation of LBDS Holding Company, LLC.” According to the firm’s account, it had been unaware until seeing a sanctions motion from the defendant that not all was as it seemed with the evidence backing up the case. [ABA Journal]

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The large law firm, which is also Washington, D.C.’s biggest lobbying firm, will pay $15 million, express regret and withdraw from representing Ecuadorian environmental complainants to settle the oil company’s charges that it had participated in a litigation scheme that Chevron has called fraudulent and extortionate. “It also agreed to assist Chevron with discovery against the Ecuadoran plaintiffs and their New York-based lawyer, Steven Donziger,” as well as hand over its five percent share of any moneys the plaintiffs happen to win when the whole thing is over. [Washington Post; Paul Barrett, Bloomberg Business Week; our coverage of the case over years]

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In November 2010 Camden Sgt. Jeffrey Frett radioed for help after receiving a superficial gunshot wound in the leg. Police discovered his wife near the scene and the officer later admitted “that he and his wife had concocted the incident. Officers injured in the line of duty receive a pension that pays 66 percent of their salary tax-free for life.” In the mean time, however, Frett had applied for a disability pension on a separate basis, namely the aftereffects of a 2008 car accident while on duty. Now the state pension board has turned down his request, with one of its members publicly questioning why the officer was permitted to plead to a very minor charge to resolve the staged-shooting episode. [Philadelphia Daily News]

Extraordinary allegations by the Manhattan District Attorney, as summarized by Bloomberg:

Three former executives at Dewey & LeBoeuf LLP, once the No. 3 legal adviser to banks handling merger deals, were charged with a “blatant” $200 million fraud that spurred the largest law firm bankruptcy in history.

The three, including the chairman, executive director and chief financial officer, were accused of using accounting gimmicks similar to those that sent top executives at WorldCom Inc. and Tyco International Ltd. to prison a decade ago. Authorities cited e-mails in which the men referred to “fake income,” “cooking the books” and “accounting tricks.”

One has to hope this kind of thing doesn’t happen often [press release, Office of the U.S. Attorney, District of New Jersey]:

A former attorney in the Haddonfield, N.J., office of a firm specializing in toxic tort litigation today admitted that he falsified defendants’ names in more than 100 asbestos suits filed in New York State courts in order to increase business and his standing in the firm, U.S. Attorney Paul J. Fishman announced.

Arobert C. Tonogbanua, 44, of Sicklerville, N.J., pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of wire fraud. During the proceeding, Tonogbanua admitted that he fraudulently inserted the names of his former law firm’s clients into legitimately filed asbestos suits and charged the clients more than $1 million in attorney’s fees, costs and settlements to defend them.

[via Legal NewsLine; South Jersey Times] For a retrospective on the Lynn Boyd Stites/”Alliance” scam of years ago, in which a circle of defense lawyers in Los Angeles used manufactured litigation to harvest fees, see clips here, here, here, and here.

“U.S. District Judge Lewis Kaplan in New York said he found ‘clear and convincing evidence’ that attorney Steven Donziger’s legal team used bribery, fraud and extortion in pursuit of an $18 billion judgment against the oil company issued in 2011.” [Reuters, Bloomberg, 485-pp., 1842-footnote opinion; SFGate, Kevin Williamson, Quin Hillyer, Ira Stoll (New York politicians including Comptroller Thomas DiNapoli roped in as allies of Donziger)] We’ve been covering the story for years.

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“Paul Ceglia, who sued Facebook founder Mark Zuckerberg in 2010, claiming he was promised a 50% share in the social media company, was arrested on Friday. His alleged crime: doctoring, fabricating and destroying evidence to support his claims. The feds described his lawsuit as a multi-billion dollar scheme to defraud Facebook and Mr. Zuckerberg.” [Joe Palazzolo, WSJ Law Blog, Donna Tam, CNet]

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Scam pretend-lawyers pose as real Hollywood lawyers firing off nastygrams to shake cash out of illicit downloaders. [Above the Law]

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According to attorney Jeffrey Newman in the Times of Trenton, New Jersey law allows class actions and consumer fraud suits to be based on paperwork infractions with no showing of actual harm, creating openings for opportunistic litigation:

As an attorney, I have defended numerous business owners against frivolous claims in which the plaintiff could prove absolutely no injury and he or she had received whatever service or product that was promised. Yet there was language in the purchase agreement that was found to be considered “non-compliant” with the Contractors Registration Act and the Consumer Fraud Act’s Home Improvement Contract regulations.

…Contractors who choose to use boilerplate contracts often sold in office supply stores are playing with fire, as such agreements would never withstand the scrutiny of the state’s consumer protection laws. When contractors use these forms and are sued, the courts can rule that they have to hand back to the consumer every penny — even the money they laid out for materials to do the job. … In another case, we represented a contractor whose advertisements were not in compliance. Even though the plaintiff never bought anything, our client was still sued!

Scam investigators are starting to assess the harm done by a pretend “law firm,” including $6,775 in losses to a victimized British man. Fortunate that it was just fake; imagine how much more damage the law firm might have done had it been real! [AmLaw Daily]

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Last week two trolley cars collided in downtown Memphis, and according to Allison Burton, a spokeswoman for the transit authority, some bystanders attempted to board the cars and fake injuries. Burton “said witnesses saw at least eight people run at the trolleys following the wreck” and at least two appear to have gotten in. [Commercial Appeal] Earlier bus-jumping here, etc.

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“Despite claims that she couldn’t work, rarely left home and rarely socialized because of injuries from a 1996 car accident, Dorothy McGurk, 43, was belly-dancing at home and in Manhattan for hours a day — and then spending several more hours a day blogging about [it].” Asked by a Facebook acquaintance why she wasn’t posting pictures of her dance adventures, McGurk said her ex, from whom she was demanding lifetime maintenance, “would love to fry me with that.” Her words sufficed, and Justice Catherine DiDomenico denied most of her maintenance claim as well as awarding the husband “60 percent from the sale of their house and thousands in legal fees for her ‘dilatory tactics.'” [Dareh Gregorian, New York Post]

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A local NBC affiliate covers the extraordinary lawsuit-abuse ring run by a tow-operator-gone-wrong in San Benito, Santa Clara and Monterey counties. Attorney Greg Adler deserves credit for cracking the scheme (via Legal Ethics Forum; earlier here and here).

In an elaborate scheme discussed in this space in May, a northern California towing operator towed cars without authority, then proceeded to sue the owners — and even some non-owners — for exaggerated storage and handling fees. The enterprise was eventually exposed by Greg Adler, a young lawyer who estimates that he spent 1,200 hours documenting the misdeeds. Two of the scammers are now headed to prison, with one receiving a 14-year sentence. [San Jose Mercury News via Legal Ethics Forum]

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June 25 roundup

by Walter Olson on June 25, 2010

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