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Rogues’ Gallery

Behind every Judicial Hellhole judge is a supporting cast of personal injury and mass tort lawyers who are constantly pushing courts to expand liability.  This “Rogues’ Gallery” section reminds policymakers of the need for aggressive oversight of influential plaintiffs’ lawyers who have stretched ethics rules and criminal laws beyond their intended bounds – manufacturing lawsuits, lying to the courts, disregarding court orders and stealing client recoveries.

This year’s top Junk Advocacy In Lawyering award goes to personal injury lawyers, William Guy and Thomas Brock, who were found civilly liable by a federal jury for their pursuit of fraudulent asbestos claims.  Guy and Brock pursued those claims against the Illinois Central Railroad even though their clients had already received compensation for asbestos-related injuries in a previous lawsuit against other businesses years earlier and were barred from making additional claims.  The lawyers were ordered to repay the $210,000 damages they initially won for the clients and kick in another $210,000 in punitive damages. ATRA urges the Mississippi Bar to impose severe sanctions to send a strong message to citizens and employers that the state’s legal culture will not backslide toward corruption.

Also taking a strong stand was the U.S. Court of Appeals for the Ninth Circuit. The federal appellate court gave Walter Lack a six-month suspension for submitting allegedly fraudulent materials in an effort to collect a default judgment entered by a Nicaraguan court.  After Lack secured the $489 million judgment against a nonexistent corporate entity, he allegedly relied on documents and representations he knew to be false to hide the error so that he could collect against Dole Food Company in the United States. Lack and the other plaintiffs’ lawyers and law firms involved also agreed to pay $390,000 in sanctions to reimburse Dole’s legal defense costs. Lack is known for settling the toxic tort made famous in the movie “Erin Brockovich” and is described as “one of California’s top plaintiffs lawyers.” While the suspension will only briefly preclude Lack from appearing before the Ninth Circuit, the California State Bar could impose additional sanctions, such as a suspension of his license or disbarment.

A federal appeals court has cleared the way for a second
criminal trial against prominent Houston plaintiffs’ attorney Warren Todd Hoeffner for fraud in negotiating $34 million in silica-related settlements. Hoeffner, in representing some 900 individuals in silicosis or silica-related personal injury claims, allegedly paid employees of an insurance company $3 million in cash, luxury goods and services to secure the settlements.

Allentown, Pennsylvania plaintiffs’ lawyer John Karoly
was sentenced to 6 ½ years in prison this year for “evading
$1.5 million in taxes and steering $500,000 in tax-free donations back to himself.” The federal judge who convicted him of fraud and money laundering reportedly said that Karoly “seems to have an honesty problem”: “He lied under oath in this courtroom.  For a skilled trial lawyer, this is behavior that shocks the conscience.” In addition to his prison sentence, which began in July, Karoly was also ordered to pay the $1.5 million in back taxes plus restitution.

Personal-injury lawyer Kenneth Bernas took his clients’ money to pay for construction of his home.  The Buffalo News reported that Bernas pleaded guilty to 33 felony counts after admitting he stole $2.7 million from 23 clients and two loan agencies for the house.  He built the house in the style of a Buffalo mansion owned by a strip club owner.  Prosecutors say Bernas will have to repay the money he stole from his victims.  Bernas also admitted to failing to pay state income tax of more than $85,000 between 2005 and 2007.

New York personal injury lawyer Marc Bernstein, who last year was arrested for allegedly stealing from clients, was charged this year with tax evasion.  Prosecutors allege that Bernstein took $2.2 million in settlement monies from 16 personal injury and medical malpractice clients. The New York Law Journal reports that Bernstein has now been “accused of failing to file tax returns from 2003 through 2007 and understating his gross income in a 2008 return.” In all, prosecutors claim Bernstein has evaded “roughly $220,500 in personal income taxes.”

76-year-old personal injury lawyer Allen Isaac, according to the New York Law Journal, was “caught on tape making unwelcome sexual advances to a client and has been suspended from practicing law for six months.” He also, according to the Journal, allegedly “bragged to her that he could improperly influence Appellate Division judges.” While the Bar’s disciplinary committee voted to disbar Isaac, the Appellate Division reduced the sanction to a six-month suspension.

Personal-injury lawyer Jeffrey Abramowitz was indicted in August for embezzling more than $1 million from his clients.  The Legal Intelligencer reported that Abramowitz’s indictment alleges that he lied to clients about the settlements of their cases, that he was “investing” their funds and that they would receive their money in accordance with a “bogus distribution schedule.” So what does the indictment say he did with the money? He allegedly spent some on himself and the rest on a “‘favored client’ and her family.” Lest people lose all faith in personal injury lawyers, Abramowitz’s partner is the one who alerted the authorities.

In October, the Florida Supreme Court suspended the law license of Hank Adorno in connection with a violation of rules governing attorney conduct. The high court action followed the finding of Broward Circuit Judge Jack Tuter that Adorno had violated ethics rules when he orchestrated a $7 million class-action settlement that benefited only seven people, rather than all the Miami taxpayers he claimed to represent. In the case, which challenged a city fire fee, seven plaintiffs split $5 million and the lawyers took $2 million instead of providing a refund to thousands of property owners. Adorno’s law firm, which dropped the co-founding partner’s name from its letterhead, returned $1.6 million in fees collected, but kept about $400,000. As of the time of publication, the Florida Supreme Court continues to consider whether Adorno’s suspension should last three years and whether he should be permanently disbarred.

Finally, no Rogues’ Gallery would be complete without an update on Bill Lerach, who was officially released from federal prison last March.  Lerach and three of the other firm’s top partners pleaded guilty to paying kickbacks.  In addition to the recently concluded two-year prison sentence, Lerach is serving two years of probation and must do 1,000 hours of community service.  The San Diego Business Journal reported that he “sounded defiant,” saying that he doesn’t “have any regrets about the career” he pursued.