|Attorney resigns for submitting false claims in chemical
Oakland attorney Jerry W. Varnado [#153451] has
resigned as a result of submitting hundreds of false claim forms to the court in a toxic
gas release case. Varnado, 54, also was charged by the State Bar with incompetent
representation of thousands of clients who claimed damages following the July 1993 release
of sulfuric acid from the General Chemical Corp.'s Richmond plant.
He became the second attorney forced out of practice as a result of their conduct
following the gas release, which affected some 80,000 mostly poor residents of Contra
The State Bar filed charges against Varnado in 1995, alleging that he submitted claims
against General Chemical which contained false information and bore false signatures. At
least 800 of the claims were duplicates: the claimant's name was the same, but other
information, such as addresses, Social Security numbers and the types of injury suffered,
Investigators determined that Varnado himself filled out and signed some of the claims.
He submitted claims in 1995 on behalf of 6,600 individuals.
The bar charged him with six counts of misconduct, including failure to perform legal
services competently, misleading the court, and engaging in acts of moral turpitude and
dishonesty through disrespect and dishonesty to the court.
Varnado, who had been an attorney for less than two years when the gas release
occurred, resigned effective Nov. 2.
At the time of the incident, residents of the affected area were warned by the bar and
other consumer protection agencies to beware of cappers and lawyers who were illegally
soliciting clients. Thousands of people filed claims against General Chemical, resulting
in a coordinated mass toxic tort action in Contra Costa Superior Court.
Because of the number of claimants, the court devised a set of rules including
requirements that each individual submit a questionnaire both in hard copy and electronic
When parties to the litigation noticed "a significant number of
irregularities," the court ordered an investigation. As a result, it dismissed 1,915
plaintiffs, identified as Varnado's clients, from the action.
The judges asked Varnado to provide copies of retainer agreements with a random sample
of 236 clients, but he could provide only 87.
A court investigator later documented Varnado's efforts to have claimants sign fee
agreements after the judge made the request. In addition, Varnado removed 888 clients from
the case eight months earlier because he did not have retainer agreements with them.
Following the investigation, the judge ordered about 2,000 claimants to appear to show
cause why their claim should not be dismissed. Approximately 1,200 appeared and reviewed
The court then approved 1,054 claims and dismissed 713.
At his deposition, Varnado blamed the problems with the questionnaires on his staff and
claimed he was unaware of their actions. But a handwriting analyst hired by the bar
established that Varnado actually filled out and signed some of the questionnaires.
Varnado submitted his resignation when presented with the findings.
A Walnut Creek attorney, Samuel N. Anya-Gafu , 38, was
disbarred in April, partly as a result of his misconduct in the General Chemical matter.
He represented more than 200 claimants in the case. The court issued two restraining
orders against him after irregularities were found in signatures on claim questionnaires
and releases submitted by clients. In addition, Anya-Gafu had negotiated settlement checks
without client endorsements.
It was later discovered that one client executed multiple releases submitted for
various claimants and that signatures on some releases did not match the signatures on the
verification of claim questionnaires.