Stanley Chesley, Disciplinary Update

The Cincinnati Enquirer reports that legendary Cincinnati Class Action attorney, Stanley M. Chesley faces a disbarment hearing in Kentucky next Tuesday over his role in the Fen-Phen scandal that resulted in several disbarments and lengthy incarcerations of Chesley's co-counsel.



Chesley and Wife, Hon. Susan Dlott

I told you about Chesley at length and Chesley's historical significance and the lead lawyer in the famous mass tort arising out of the Beverly Hills Supper Club fire which occurred in a Kentucky night club on the night of May 28, 1977 killing 197 people.  Chesley also represented victims of the Lockerbie bombing as well as Jewish holocaust survivors in claims against Swiss and German banks. You can read about all about Chesley at this link.
As I pointed out in regards to a far less impressive attorney, Eric Deters--disbarment in Kentucky will result in reciprocal discipline in Ohio.  As the Enquirer article says, disbarment in Kentucky is the professional death sentence for Chesley.  Chesley and co-counsel are accused of stealing millions in an elaborate scheme relating to the funneling of class action funds into a foundation operated by the attorneys for as it turns out, the benefit of the lawyers.

Stanley Chesley is married to federal judge, Susan Dlott. 

"Yeah, Just Send Over a Check!"

The invaluable Law Profession blawg has the Commonwealth of Pennsylvania's disbarment of Paul Wayne Shoup, an attorney who was working for a tax organization.  According to the opinion, attorney Shoup made a remarkable discovery:  "that the Montgomery County [Maryland] Treasury Office website could be easily searched for companies due tax refunds [...  Attorney Shoup] began stealing the unauthorized real property tax refund checks simply by contacting the Montgomery County Treasury Office and requesting that a refund check be mailed out."

Mr. Shoup stole half a million dollars using this technique.  Nice.

Shoup who paid restitution was subsequently sentenced to 18 months for felony theft.

2-Years for Attorney who Gambled Away $2.5 million Client Dollars

Bruce Vielmetti at the Milwuakee-Wisconsin Jounal Sentinel reports on the sentencing of the Greenfield, Wisconsin lawyer who gambled away client funds of $2.5 million dollars.  His report:

"A Greenfield lawyer who gambled away nearly $2.5 million of a client's money said at his sentencing Friday that playing the slots 'was like the greatest drug there ever was,' but that he hasn't gambled since his scheme was uncovered 22 months ago.

Thomas H. Koch, 46, has been in treatment for a gambling addiction and attends Gamblers Anonymous meetings twice a week while working as a dishwasher.  'Gambling isn't about the money,'  he told Circuit Judge David Hansher. 'That's just the means to the end.'  Koch said he had tried to stop many times, but couldn't until he was caught. He said he's happy to be away from the casino, and he apologized to his client, family, friends, the court and the state bar.

Prosecutors recommended four years, and Koch's attorney suggested a year in jail with release for work and therapy, and a stayed prison sentence to be served if Koch failed to meet conditions.  [Judge] Hansher credited Koch for quickly taking full responsibility for his crime once it was uncovered, for surrendering his law license and committing to treatment for his addiction. He agreed Koch probably didn't need prison to deter him from going back to the behaviors that have essentially ruined his life.

But because of a need for general deterrence - a message to others that stealing so much money can't go unpunished - [Judge] Hansher sentenced Koch to two years in prison, followed by four years of extended supervision. He must continue with Gamblers Anonymous and psychiatric treatment, and not enter any kind of gambling establishment anywhere, or gamble online.  He also ordered Koch to pay $2,421,768.57 in restitution, even though Assistant District Attorney Kurt Benkley said Koch has no assets and likely will never pay the money back.

Nearly two dozen people were in court to support Koch, and more than 30 submitted letters to the court. His wife said that even when he was gambling, he always was an outstanding, involved, caring father to their three sons, ages 7, 10 and 12. His sister said that in their family of eight children, they were expected to be self-sufficient and she was sad he felt he could never confide his problem to her. Since his arrest, the whole family's communication has improved, she said.  'For the first time in his life, he seems calm,' Kristin Koch said.

Koch, a 1990 graduate of Marquette University Law School, operated his own law office at 3466 S. 13th St. Affiliated Computer Services, a Dallas-based company, works for medical insurers, checking to see whether their clients are suing to recover costs for their injuries when possible. ACS hired Koch in 2001 to pursue such cases in the Milwaukee area for ACS's insurance company clients. In 2007, a new litigation manager at ACS noticed Koch had about 360 open claims. When he failed to reply to her request for status updates, she found that about 270 had been settled, but that no proceeds had been forwarded to ACS. Company officials came to Milwaukee in October 2008, and Koch admitted his embezzling.

Koch had told [Judge] Hansher that in 2006 he signed up for Potawatomi's self-restriction list. He said he stayed away for two weeks, but when he returned no one turned him away, and that he collected on hundreds of jackpots after he was supposed to be banned. 
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I've known some compulsive gamblers in my life.  A compulsive gambler with access to a fiduciary account is a combustible situation for the client(s).

The 2003 film with Phillip Seymour Hoffman, Owning Mahowny, probably comes closest to capturing the essence of what Thomas Koch experienced at the height of his addiction. Watching this movie was physically sickening for me, no doubt I was seeing a manifestation of my separate issues played out through the gambling addiction of the protagonist. I imagine based on things said in 12-step meetings that people struggling with this addiction suffer the same sort of "high" described by crack addicts.

Lawyer Disbarred for Sex Behind Bars

West Virginia attorney G. Patrick Stanton lost his license for working a fraudulent scheme to maintain a sexual relationship with an inmate, according to a report at the Charleston Gazette. Here's an excerpt from the Associated Press story:

T[he] unanimous ruling [of the Supreme Court] said G. Patrick Stanton Jr. pretended to be the woman's attorney to obtain a one-on-one visit with her at the Pruntytown Correctional Center.  Stanton had previously represented inmate Rose Auvil. Following the October 2005 incident, he resigned as head of the state insurance commissioner's consumer advocacy office. He had held the post for less than three months. The state Lawyer Disciplinary Board had recommended admonishing Stanton. The court disagreed, calling his act of deceit shocking and unprecedented.
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I'm actually fairly amazed at this outcome, if this story is trustworthy a lawyer has been disbarred for sexually misconduct shy of rape--in light of the wrist slaps that we've seen around the country for pretty outrageous conduct by lawyers in the realm of lawyer-client sex. 

The crux, of the disciplinary sanction appears to be directed at the fraudulent behavior of the lawyer combined with the position of trust as a public official.  It is the right result.

Double or Nothing

The Cape Cod Times has a report of the disbarred lawyer who has twice bilked clients of massive amounts of money to feed an online poker obsession.  According to the Times report:

"A disbarred Dennis lawyer admitted Friday that he stole $650,000 from a client to feed his gambling habit.

John 'Jack' Roberts Jr., 59, pleaded guilty in Barnstable Superior Court to one count of larceny over $250 by a single scheme.  Once a respected real estate attorney, baseball coach and town volunteer, he used his client's money to fuel an obsession with online poker, according to court records. Prosecutors alleged that Roberts stole $650,000 from Middleboro.  This is the second time Roberts has been convicted of bilking a client out of cash so he could gamble it away. In 2007, he was sentenced to house arrest after pleading guilty to stealing $137,000 from a Sandwich woman's estate. At that time, he had control of the late Alice May's $600,000 estate. resident Norman Sasville – wiring the bulk of it to gambling Web sites."
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When I was at Fort Knox learning how to shoot a tank, before going overseas I got into a poker game and I lost $12 in mmmmmm 5 minutes.  This $12 represented approximately 9 % of my monthly income in 1972 dollars.  I did not enjoy the sensation.  This turns out to have been one of the luckiest and cheapest of my bad learning experiences since aside from the occasional lottery ticket--I do not find gambling attractive or enjoyable. 

Is there a more concentrated example of insanity than this story?

Disbarred Attorney, Just Keeps On Stealin'

Aisling Swift's article in the Naples News website gives us another example of why the Disciplinary authorites do all that they can do to shut down the disbarred attorney-class.  In Gary Gramer, we have a disbarred New York lawyer who pled guilty to stealing a little client money.  So what does Gramer do?

Why he takes his show on the road to the sunshine state, where he continues to practice law despite fugitive warrants and the NY disciplinary proceedings.  Oh, and he wasn't hiding, he actually had an office and multiple pending civil actions. 

When I got out of law school years ago, a lot of guys took the OurState bar, and promptly took the Florida bar, so they could "write off their Florida vacations," somone out there, please explain that one to me?  For those of us east of the Mississippi, Florida bar registration as your second state of admission was not an uncommon phenomena.  My guess is Gramer was one of those guys.