Recession Blamed for Increase in Lawyer Wrongdoing in California
California bar officials are blaming the recession for an increase in lawyers being investigated for pilfering client funds or collecting fees to modify mortgages without doing anything to help.
The State Bar of California is investigating 1,200 loan modification cases and more than 300 lawyers who were involved, the Fresno Bee reports. More lawyers are also being accused of mishandling client funds, according to Carol Langford, a lawyer who defends lawyers accused of ethical wrongdoing. Most of the lawyers under investigation were retired or relatively new to practice, the story says.
Langford said lawyers are losing clients, losing their jobs, losing value in their homes and losing money in the stock market. Often lawyers who take money from client funds think they are borrowing the cash and plan to repay it. “Probably 65 percent to 75 percent of the time, they’re wrong,” Langford told the Fresno Bee.
State bar president Howard Miller told the newspaper that the loan modification scams are “the most disturbing thing I’ve seen in the legal profession practicing for more than half a century.”
“This is a tough economy for lawyers, as it is a very tough economy for everyone,” he told the newspaper. But “there’s no excuse or explanation” that absolves lawyers for preying on clients.
Prior coverage:
ABAJournal.com: “Calif. State Bar Prez Blasts Lawyers for Taking Advantage of Foreclosure Clients”
