California Bar Suspends 1,600 Attorneys for Violating Client Trust Account Rules Following Alleged Embezzlement by Tom Girardi
The California State Bar has taken decisive action against more than 1,600 attorneys who violated rules governing client trust accounts, implementing these measures after the notorious case involving Los Angeles attorney Thomas Girardi, who allegedly embezzled millions from his clients.
Upholding the Client Trust Account Protection Program
Last year, the Client Trust Account Protection Program was introduced, requiring attorneys to annually register their client trust accounts with the state bar. Additionally, they must conduct a yearly self-assessment of their practices in managing these accounts and certify their compliance and understanding of the requirements for safeguarding funds.
Once the reporting component is completed, the state bar conducts compliance reviews and investigative audits as necessary.
Reduction in Violations
Originally, over 1,700 attorneys were found in violation of the rules and placed on "inactive" status, preventing them from practicing law. However, the number has now decreased to 1,641 after some attorneys met the necessary requirements and fulfilled their obligations. This reduction indicates progress in ensuring compliance among legal practitioners.
Emphasis on Administrative Suspension
The suspension of approximately 1,600 attorneys is primarily administrative and not disciplinary. It is crucial to note that none of these attorneys were found guilty of misappropriating funds from their trust accounts. The noncompliance with the reporting rules is currently the main issue at hand.
Addressing Potential Reasons for Noncompliance
One potential explanation for the failure to comply with reporting could be fear of exposure for embezzlement. However, Special Counsel Steven Moawad clarifies that there might be various other reasons for noncompliance, such as the unfortunate possibility that some of the suspended attorneys may have passed away. Currently, the state bar lacks a comprehensive database to track such statuses, relying on family members to come forward with the information.
Deadline and Consequences
Attorneys had from December 1 until April 3 to meet the new rules' requirements. Those who failed to comply with the reporting mandate were fined a noncompliance fee of $75 and urged to meet the requirements by June 30. The attorneys who remained non-compliant by June 30 and failed to submit anything by July were subsequently suspended, moving them to inactive status.
Learning from Past Mistakes
The Client Trust Account Protection Program was partially designed as a response to the allegations against former attorney Thomas Girardi. The 84-year-old Girardi faced indictments in both Los Angeles and Chicago on fraud charges, accused of stealing over $18 million from his clients.
The state Supreme Court revoked Girardi's law license last year, and the State Bar acknowledged mishandling decades of allegations against him. The seriousness of the abuse and malfeasance leading to Girardi's disbarment was further emphasized by these indictments.
Girardi's Notorious Case
Thomas Girardi gained national prominence when his now-defunct firm, Girardi & Keese, secured a victory against Pacific Gas & Electric, resulting in the company agreeing to pay $333 million to Hinkley residents who attributed their cancers and diseases to contaminated water from a gas pumping station. This landmark case inspired the 2000 film "Erin Brockovich," starring Julia Roberts.
Mental Fitness for Trial
Despite being diagnosed with Alzheimer's disease, a government expert concluded last month that Girardi is mentally fit to stand trial. If convicted, he could face a lengthy prison sentence.
In conclusion, the California State Bar's proactive measures in implementing the Client Trust Account Protection Program demonstrate their commitment to safeguarding the interests of clients and upholding the integrity of the legal profession. By addressing past shortcomings and promoting compliance, the bar aims to create a more accountable and responsible legal community.
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