Lawyer held in contempt for spending $390K in frozen funds spends 2 weekends per month in jail
A lawyer in Jackson, Mississippi, continues to spend two weekends per month in jail for contempt of court after he failed to persuade a judge to switch him to home confinement.
Chief U.S. District Judge Daniel P. Jordan III denied the motion by lawyer Eduardo Flechas in February, the Mississippi Clarion Ledger reports. As a result, the lawyer reports to jail at 5 p.m. Friday and stays until 5 p.m. Sunday.
The case stems from a dispute over Flechas’ agreements with several litigation funders in a toxic tort case. Flechas had pledged a portion of his attorney fees to multiple funders in a toxic tort case, leading to a dispute over distribution of the money when the case settled.
Flechas had transferred $390,000 in funds that had been frozen in the dispute to his law firm and then spent the money, according to an agreed-upon contempt judgment placed under seal in October 2015. Flechas promised to repay the money and agreed to jail if he failed.
At the time, Flechas had identified several cases that might produce fees needed to repay the money. A year later, Jordan unsealed the contempt judgment and said Flechas had “yet to fully purge his contempt.”
Flechas was ordered to report to jail every other weekend beginning in July 2016. Jordan refused to lift the contempt order in November 2017 and rejected his motion to switch his jailing to home confinement Feb. 1.
In the November 2017 decision, Jordan said Flechas had received contempt credit for “just over $105,000,” which represented a combination of money that had been repaid and that had been paid into the court overseeing Flechas’ bankruptcy and that of his law firm.
Flechas had maintained that it was impossible to repay the money, despite his economic “lifestyle change.” That change included moving to a less expensive home, transferring his children to a different private school, canceling his health insurance, and driving a car with more than 200,000 miles on it.
“Of course, Flechas can decide where to live and where to send his children to school,” Jordan wrote. “But he is before the court now claiming that it is impossible to make any payments toward the contempt judgment. That’s a stretch.”
The Mississippi Bar is also interested in the case. In October 2018, the bar filed a motion to compel production of documents in its own investigation of Flechas for allegedly violating the asset freeze order. Jordan ruled that Flechas was permitted to produce the records, but production of financial records should happen in the disciplinary proceeding.
