Posts tagged as:

scandals

The Louisville Courier-Journal profiles Angela Ford, who took the lead in exposing Kentucky’s massive fen-phen settlement fraud.

Stiff sentences for the two lawyers most closely identified with the Kentucky fen-phen settlement scandal. [Louisville Courier-Journal, Lexington Herald-Leader, Bloomberg, ABA Journal]. More: Howard Erichson, Mass Tort Lit Blog.

Who would have dreamed that a protege of Bill Lerach would wind up later copping to a felony rap resulting from ethical infractions? (Wait, don’t answer.)

At a barbershop in 1994, [Cauley] says, he picked up Forbes magazine and saw a profile of Lerach; it was the famous article, where the attorney was quoted as saying, “I have the greatest practice . . . I have no clients.”

Cauley approached Lerach and was soon launched in a thriving class action practice (“His usual way to deal with things was to yell and bang things and threaten,” said a fellow plaintiffs lawyer, Glen DeValerio of Boston.) It came crashing down under revelations that the Little Rock, Ark.-based lawyer took $9 million from clients’ settlements to spend on firm overhead and unrelated investments. [Koppel/WSJ, ABA Journal, interview-based WSJ Law Blog story first, second]

“Prominent Arkansas plaintiffs’ lawyer Gene Cauley has landed in some hot water due to his apparent inability to produce more than $9 million in settlement money he was overseeing for clients, according to federal court records.” His lawyer, John Wesley Hall, told Judge Jed Rakoff at a hearing “that the missing settlement funds ‘are presently unavailable,’ but Hall declined to elaborate, citing Cauley’s privilege against self-incrimination.” He says, however, that Cauley is working to “find the money and pay it in 90 days” and expects to “make everyone 100% whole”. [WSJ Law Blog].

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What with all the money in Edwards’ own name from his legal career, not to mention the late Texas trial lawyer Fred Baron’s generosity in solving the housing needs of Edwards’ girlfriend, it wouldn’t seem necessary to use campaign or charitable funds for her benefit, too, but a U.S. attorney is said to be pursuing allegations along those lines. Hunter was paid $100,000 to do documentary filmmaking about the Edwards campaign, which gave the couple many opportunities to be close to each other. [New York Daily News, CBS News, Raleigh News & Observer] More: Althouse, Kaus.

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From the Times Online:

A former television presenter who became one of Britain’s highest-earning solicitors has been struck off for “disgraceful” misconduct in his handling of sick miners’ compensation claims.

Andrew Nulty, who earned £13 million from the claims in one year, joins a growing list of solicitors punished for their role in the coal health scandal, exposed by The Times.

Earlier: Feb. 3, 2009; Feb. 19 and Dec. 12, 2008; May 8, 2007.

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And attorneys were the brains of the operation, according to Judge Victoria Chaney (transcript, PDF, courtesy American Lawyer). Ben Hallman of American Lawyer calls it “the most egregious plaintiffs lawyer extortion and fraud allegations we’ve seen this side of criminal indictment”:

After several days of testimony on defense allegations of Dominguez’s misconduct [Los Angeles plaintiff's lawyer Juan Dominguez], Chaney tossed the tort cases before her. “I find that there is and was a pervasive conspiracy to defraud American and Nicaraguan courts, to defraud the defendants, to extort money from not just these defendants — but all manufacturers of DBCP and all growers or operators of plantations in Nicaragua between 1970 and 1980,” she said from the bench. Her ruling puts in doubt $2 billion in pending judgments Dominguez won in dozens of similar suits. Chaney also said she would refer the matter to state bar associations and to prosecutorial agencies. …

The court testimony that led to Chaney’s ruling detailed how a group of Nicaraguan lawyers, in apparent collusion with local officials, judges and lab technicians, rounded up 10,000 men whom they coached to claim sterility — and to blame that sterility on Dole’s chemicals.

When Dole attempted to investigate the claims, its representatives were harassed and some plaintiff’s lawyers even put out a bounty seeking the identity of witnesses. Chaney said that she did not suspect a Sacramento law firm that also represented the plaintiffs of being involved with the fraud. I’ve started a new tag to collect our coverage of the scandal.

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March 21 roundup

by Walter Olson on March 21, 2009

  • A triumph for good sense, good policy, and the Constitution: Supreme Court declines to disturb 2005 Protection of Lawful Commerce in Arms Act, thus ending NYC’s wrongful and unfair lawsuit against gun makers [AP/Law.com] Interestingly, the Obama administration joined its predecessor in urging that the law’s constitutionality not be questioned [Alphecca] One of my fond memories is of giving the lead presentation to the House Judiciary Committee at a hearing on the bill during its drive for passage.
  • “Tinkering With DWI Evidence Costs NY Judge and Law Prof Their Jobs” [ABA Journal; Buffalo, N.Y.]
  • Coalition of media organizations urges First Circuit to reverse judge’s “truth-no-defense” defamation ruling, but the Circuit denies en banc rehearing [Bayard/Citizen Media Law and sequel; earlier]
  • Car-crash arbitration-fixing angle heating up in probe of Luzerne County, Pennsylvania judicial scandals [ABA Journal]
  • ACORN helping with the Census? Based on their voter work, we can be sure they’ll give it that 110% effort [Jammie Wearing Fool]
  • To protect the public, why do you ask? Cook County, Ill. sheriff engages in “constant surveillance of Craigslist’s erotic services” [Patrick at Popehat]
  • Imposed-contract provisions mean that Employee Free Choice Act is “not as bad as thought. It’s worse!” [Kaus]
  • West Virginia lawmaker proud of introducing ban-Barbie bill: “If I’ve helped just 10 kids out with this, to me it was worth it” [AP/Charleston Gazette-Mail, earlier]

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The jury convicted the veteran pol on all counts after a five-month trial. The case raised allegations of lawyer misconduct, and we have previously covered the bare-knuckled tactics Fumo used to protect some of his friends in the Pennsylvania courthouse machine.

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A week ago I briefly noted that now-imprisoned securities class action king Mel Weiss appeared on the list of Bernard Madoff victims (163-pp. PDF courtesy WSJ, via Christopher Fountain) and observed how ironic it seemed that someone who made great claims to expertise in sniffing out stock fraud should have been taken in by it.

According to correspondence from New York securities lawyer (and longtime Weiss critic) Howard Sirota, however, there might be to the story than that:

I wouldn’t be so quick to jump to the conclusion that Mel Weiss [fouled] up investing with Madoff.

Weiss’ wife and son Stephen A. Weiss invested with Madoff, as did [Milberg Weiss partners] David Bershad and Pat Hynes.

In addition, convicted serial Milberg plaintiff Howard Vogel invested with Madoff.

Buchbinder Tunick, Milberg’s accountants and ironically Milberg’s principal forensic accounting experts, appear on the list, although the entries may be clients of the Buchbinder firm.

Class action firms Wolf Popper and Wolf Haldenstein also appear.

Sirota believes that other persons and entities on the Madoff victims list have also served as lead plaintiffs in securities litigation or as plaintiffs in other litigation handled by class-action firms. All of which could be mere coincidence, or could suggest that either Madoff himself or others in his circle might have played some role in funneling lead plaintiffs to the class-action bar. (Particularly in the “race to the courthouse” era that preceded the Private Securities Litigation Reform Act, having a stable of cooperative repeat plaintiffs was vital to the success of many plaintiff’s firms.)

One way to check this thesis, Sirota suggests, would be to check the names on the Madoff victims list against those on the list of plaintiffs maintained by the Stanford Law School securities class action clearinghouse to see whether there are any other noteworthy matches and if so whether they follow any particular pattern. He also asks whether some of the law firms that have been organizing task forces to recruit and represent plaintiffs in the Madoff scandals — they include the Milberg firm and Wolf Haldenstein — have adequately disclosed to potential clients in their literature that their firms’ own names figure on the Madoff victims list. More: Gary Weiss, Larry Ribstein.

Further: Yet more views. And in comments, a visitor says Wolf Haldenstein is on the list because clients of the firm invested with Madoff, not because the firm itself did.

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Mississippi:

The 5th U.S. Circuit Court of Appeals on Monday upheld the conviction of Vicksburg lawyer Robert Arledge, convicted of bilking the drug company Wyeth of more than $6.7 million over the diet drug Fen-Phen….

U.S. District Judge David Bramlette sentenced Arledge to six years in prison for knowingly allowing clients to make claims of about $250,000 each for health complications although they had no legitimate reason.

Seems it was a clergy scandal as well as a lawyer scandal:

Regina Reed Green of Fayette, who pleaded guilty to tax evasion involving false Fen-Phen claims, testified Arledge knew about the scheme to defraud the drug company. She said he told her every resident of 9,740-population Jefferson County would get $1 million.

“The evidence showed that when Green became concerned that she might be caught fabricating the prescriptions and expressed a desire to stop her illegal activity, she contacted (the Rev. Gregory) Warren,” the appeals court wrote. “Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged.”

Green testified Arledge persuaded her to continue: “And he said … I wasn’t going to get in any trouble because like (Warren) said, they were going to box all those files up, put them away, and never be seen again.”

Earlier coverage here, here, and here (via).

January 13 roundup

by Walter Olson on January 13, 2009

  • IP turf-staking: charity tries to trademark the phrase “Congenital Diaphragmatic Hernia Awareness” [Likelihood of Confusion]
  • Bad excuses dept.: Ohio 17-year-old killed his mom but lawyers “insisted youth and video game addiction made him less responsible,” a theory judge wasn’t buying [AP/WBBM]
  • Lawsuit over Yelp review (chiropractor vs. disgruntled ex-client) settled [CNet; earlier]
  • “Can U.S. Laws Protect Online Speech from Foreign Libel Suits?” [Neuberger/PBS]
  • Coverage of Philadelphia’s Fumo scandal trial, “law firms [and some big ones] used in an alleged blackmail scheme” [Lowe, AmLaw Daily, earlier]
  • “Another wrongful-paternity case from hell” (wrong guy, but default judgment) [Balko, Reason]
  • Never trust content from “ProPublica” [Kopel @ Volokh on environmental effects of oil hydraulic fracturing, response from ProPublica, Kopel's riposte; their attack on Goldman Sachs in California and New Jersey; Carter Wood at NAM "ShopFloor"]
  • Few places have emulated San Francisco and Santa Cruz ban on discrimination based on appearance, i.e., against less attractive folks [WorkplaceProf]

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Ed Peters, the former Hinds County (Jackson) prosecutor who’s been a central figure in the still up-in-the-air Peters-DeLaughter branch of the Scruggs scandals, has turned in his law license (via) amid much Mississippi speculation that he is cooperating with prosecutors and that other developments are imminent. NMC at Folo tries to sort things out. And, just in time to be helpful, Alan Lange of YallPolitics has an article summarizing the scandal as it’s developed thus far.

The American Tort Reform Association is out with its annual ranking of the jurisdictions where it thinks civil defendants are farthest from being assured a fair trial, and they are:

  1. West Virginia
  2. South Florida
  3. Cook County, Ill.
  4. Atlantic County, NJ
  5. Montgomery and Macon Counties, Ala.
  6. Los Angeles County, CA
  7. Clark County (Las Vegas), Nev.

The list reflects the views of big-company managers and lawyers as to tort lawsuits; a poll of, say, doctors might result in different nominations (Brooklyn, Bronx, Long Island*, Philadelphia) and one of class-action or patent-infringement defendants would likely produce yet other lists.

ATRA has a supplementary “Watch List”, nicknamed by some of us “Heckholes”, of toasty but not quite infernal jurisdictions, on which it places the Rio Grande Valley and Gulf Coast of Texas, Madison County, Ill., Baltimore, Md., and St. Louis city and county and Jackson County, Mo. It also offers side essays on notable scandals among high-rolling lawyers, trial lawyer-AG alliances, and pro-plaintiff’s-bar lobbying efforts.

Some coverage of the report: Pero, ShopFloor (with this and this on AG alliances), Ambrogi, Genova, CalBizLit (“We’re Number 6! We’re Number 6!), TortsProf, Miller (Baltimore), and Turkewitz (cross-posted from Point of Law; also note this recent post).

* Commenter VMS makes a case that Long Island does not belong on such a list.

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Even after being jailed in Toronto, the litigator managed to grift $10 million from an escrow into his personal account. And he let the malpractice insurance on his law practice lapse, as his horrified colleagues are now finding out. (Alison Leigh Cowan, Charles V. Bagli and William K. Rashbaum, “Lawyer Seen as Bold Enough to Cheat the Best of Investors”, New York Times, Dec. 13).

P.S. Eric Turkewitz (Dec. 14) has a sobering analysis of possible liability exposure for the non-equity partners of Dreier LLP.

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Microblog 2008-12-13

by Walter Olson on December 13, 2008

  • Holman Jenkins on auto bailout [WSJ] Bush’s willingness to use TARP helped the unions scuttle a reasonable deal with Corker; and why exactly did CEO Wagoner commit GM to the (dubious and self-injuring) position that buyers’d abandon the company in the event of a Chapter 11? [Hodak Value h/t Ted] So that’s what dragging Detroit down — domestic partner benefits [Brayton] And Ted wonders if it might be cheaper in the long run for the government just to buy a Senate seat from Gov. Blagojevich for every auto worker;
  • Where’d Gov. Blagojevich pick up idea it was OK to sell official acts for $$$? Can’t imagine [Ribstein] Who is Advisor B? [Byron York] Sing, Rod, sing! [Coleman] “Blago’s decision to let SEIU and not AFSCME organize Ill. child-care workers” Hmmm [Freedom-at-Work, NRTW] “How do they think Chi pols talk in private when muscling some guy for cash? Like Helen Mirren playing the queen?” [John Kass, Tribune] A look at AG Lisa Madigan [PoL] Illinois pols have shaken down hospitals before, state’s “certificate of need” (permission-to-build) law is one culprit [StateHouseCall]
  • J.K. Galbraith’s best bon mot: “bezzle” = inventory of unexposed embezzlement, revealed as tide of boom recedes [Cox, Breaking Views] Fascinating memoir of why Madoff had been giving off fishy smell for years [Tokyo Cassandra] So sleazy! “Many” investors put $ with Madoff because they suspected he was crooked — but cheating someone else [Blodget] “Madoff didn’t run one of these much-maligned, unregistered hedge funds. He was registered with the SEC. Here’s his latest 13-F, which looks perfectly normal.” [Weisenthal]
  • Daily downer for media folk [@themediaisdying h/t @amyfeldman] “Remember, America, you can’t wrap a fish in satellite radio” — P.J. O’Rourke wants bailout for print [The Australian]
  • Jurors’ political leanings predict whether they’re pro-plaintiff or defendant? Not as simple as that [Wisconsin Lawyer h/t @juryvox]
  • Asbestos rise in Madison County, Illinois could signal return to “old school” tactics [MC Record h/t @icjl]
  • Sue me harder, don’t stop now: competing Fla. fetish clubs feud in court, which’ll get whipped? [ABA Journal]
  • Russian patent office grants trademark for ;-) emoticon, businessman asking royalties [BBC h/t @bodhi1 @mediadonis]
  • Arnold Kling: loan modification way oversold as remedy for housing ills [EconLog h/t @tedfrank]
  • Best line: “the goose was not our employee or our agent” [CKA Mediation h/t @vpynchon, earlier]

Dreier LLP scandal

by Walter Olson on December 10, 2008

From bad to worse: “According to a declaration by the firm’s Controller John Provenzano, millions of dollars owed to clients appeared to be missing from the firm’s accounts.” (Dan Slater, WSJ law blog; American Lawyer; earlier).

In general clients who suffer by a law firm’s defalcations, and cannot be made whole by suits against the law firm, are at risk of losing all or most of the money they’d entrusted; however, New York, where the Dreier firm is headquartered, at last report afforded broader provisions for clients than did most states. I took note four years ago of the not-especially-generous state of lawyerdom’s collective “client security” funds.

P.S. More on client security funds in comments. Larry Ribstein has thoughts on the Dreier firm’s unusual organizational structure. As for all the “dating Maxim models” stuff about the extravagance of Dreier’s personal life, that is pure tabloid-style sensationalism and will under no account be exploited in this space.

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November 23 roundup

by Walter Olson on November 23, 2008

  • In unpublished opinion, California appeals court upholds dismissal of Unruh Act challenge to baseball Angels’ Mothers Day tote giveaway [Lex Icon, earlier]. More: CalBizLit.
  • Securities class-action firm Bernstein, Liebhard & Lifshitz perhaps a less credible tribune of fiscal rectitude now that name partner Mel Lifshitz has copped felony plea to lying on federal taxes [NY Post, NYLJ, WSJ law blog] And what’s this about Lifshitz funding one of his firm’s clients? [The Street] P.S. He’s now departed the Bernstein firm, but maybe there’s an opening for him as chairman of House Ways and Means.
  • Per one lawyer, “would be a stretch” for website operator to be held liable for teen’s overdose suicide with webcam running [AP]
  • Carter Wood finishes up weeklong series of posts looking back on the great 1998 tobacco settlement [ShopFloor links to PoL]
  • Eric Holder not a reassuring Attorney General choice for gun rights [Kopel @ Volokh]
  • Law bloggers on Twitter: Anne Reed explains what the fuss is about [Deliberations; related, Michelle Golden]
  • Compulsory chapel? UC Irvine Prof. Alexander McPherson, who quit supervising students rather than submit to state-mandated sexual harassment training, explains his stand [L.A. Times] Lefty blogs once again empty a bucket over his head [Feministe, Lemieux]
  • Presumably unrelated: “Law Grad Accused of Faking E-Mail to Implicate Prof in Harassment” [ABA Journal, Florida Coastal]

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