Posts tagged as:

fraud

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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According to prosecutors in Santa Clara County, a “lawsuit mill” formed part of an extensive “tow-and-sue” criminal scheme in which a towing operator sold towed cars without notifying the owners and then added insult to injury by going after the owners for storage and handling fees. Paul Stephen Greer, also known as Vincent Cardinalli Jr., pleaded no contest to fifty-nine felonies. Prosecutors say Greer, who operated tow trucks in Clovis, Gilroy and Hollister, sued parties that did not own the vehicles, arranged for falsified proof of service so as to obtain quick default judgments against defendants never apprised of his suits, and engaged in perjury. [San Jose Mercury-News, press release]

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Lowering the Bar has details on the latest California case alleging fraud. Food Liability Law Blog wonders whether it and the related Crunchberry suit will make for an “endless loop” of courtroom activity. Earlier here, etc.

P.S. Don’t miss our funny reader comments on this one.

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The law is dangerous because it’s vague (via Damon Root/Reason “Hit and Run”).

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“An 86-year-old Vancouver fraud victim has taken a stand against Canada’s biggest bank, saying her Royal Bank branch shouldn’t have allowed her to withdraw $10,000 on her Visa card to give to a scam artist with no questions asked.” [CBC]

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Russell Jackson records a federal court’s dismissal of a class action lawsuit filed against Perdue.

New at Point of Law

by Walter Olson on January 12, 2010

Things you’re missing if you’re not reading my other site:

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