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Fast Track: 'Bad apples' now face fast discipline

By Nancy McCarthy
Staff Writer

Northern California attorney Milton Lathan admitted on the witness stand in State Bar Court that he was unaware of some federal regulations governing the Social Security disability checks he obtained for his clients.

He thought he could cash those checks and keep the money as his fee, he told Judge Patrice McElroy, just as he thought he could submit a change of address form to the post office so he would receive his clients' mail.

"I realize I made a mistake," admitted Lathan, who was charged by the State Bar with committing serious ethical violations against five clients. "I won't repeat that mistake."

A moment later, he said his clients' accusations of forgery were false and he was entitled to the funds he took when he cashed their checks. "I acted in good faith," he insisted. Turning to McElroy, he added, "My momma didn't raise no thief."

The State Bar likely would disagree, having added Lathan to its hit list of bad apples it is trying to remove from practice on an expedited basis. Under a recently inaugurated fast track program, the bar has investigated or filed charges against 11 California lawyers it considers a serious threat to the public and is investigating another half-dozen or so.

The goal is to file charges within 60 days of starting an investigation, quick action by any measure. So far, four of those targeted have resigned; six, including Lathan, were placed on involuntary inactive status; and one was permitted to continue to practice with severe restrictions.

The cases of those who do not resign continue to wind their way through the discipline process toward a final disposition, but unlike the majority of lawyers who face discipline, these attorneys are unable to practice.

"The idea is to identify attorneys who are a significant threat to public safety and take whatever means are necessary to take them out of the practice of law," explained Victoria Molloy, chief assistant trial counsel in the bar's Los Angeles office. "We're trying to find the bad guys earlier in the process."

The Office of Chief Trial Counsel, which prosecutes errant lawyers, created fast track teams in its northern and southern California offices in January. In Los Angeles, two attorneys, each with the help of two investigators, are assigned fulltime to the fast track group; in San Francisco, one attorney, two investigators and a paralegal work primarily on the cases. All the team members have years of experience under their belts.

By analyzing computer data, investigators cull from the thousands of complaints the bar receives the handful of attorneys who might be eligible for the fast track.

Warning signs include a flurry of complaints in a short period of time, thefts of large sums of money, or a significant number of reports of checks written against insufficient funds in a client trust account.

Cases then are investigated far more quickly than is usual. Devoting an attorney and investigator's fulltime efforts to a single case allows quick processing. Normally, bar investigators might handle a caseload of 35, 40 or 50 files and work for several attorneys.

But, "once we've said someone is causing substantial harm, that's all the investigators are working on," Molloy said. "They put all their energies into this. It's obviously a luxury you can't afford on regular cases."

Added Jeff dal Cerro, Molloy's counterpart in San Francisco, the program "symbolizes a real commitment of our resources. We are willing to go after the 2 or 3 percent of the most dangerous practitioners out there."

The other cases pursued by the fast track teams are:

  • Gary David Lampert, 53, resigned after the Los Angeles Superior Court took jurisdiction over his practice. Lampert is a probate and trust attorney who was investigated for allegedly stealing more than $2.6 million from client accounts, including those of friends and an ailing relative.

    In June, bar investigators seized computers, files and bank records from his Woodland Hills office and froze Lampert's bank accounts. Five days later, he resigned before the bar ever filed charges against him.

    Lampert was sued in February by a Lutheran Church foundation, which won a $1.5 million judgment against him for allegedly transferring $2 million in trust money to other accounts. He also was suspected of stealing up to $80,000 from friends for whom he handled the proceeds of the sale of their deceased parents' home.

    According to court documents, he also misappropriated $20,000 that was to have been held in trust for one of his wife's relatives, who suffers from multiple sclerosis.

  • Sam Birenbaum, 53, of Malibu was ordered inactive in June, after the bar charged him with stealing about $500,000 from clients. Birenbaum, who once was a candidate for the Malibu City Council, also faces criminal grant theft charges. In one case, Birenbaum allegedly put a client's $100,000 divorce settlement in his client trust account in spite of the client's instructions to place the money in a brokerage account. He allegedly spent half the money to pay off other clients and took the other half as a money order payable to himself.

  • Charles Sapper, 50, was placed on inactive status in March and resigned with charges pending in August. Sapper, a San Ramon lawyer, is charged in Contra Costa County with five felony counts of grand theft of personal property for misappropriating the settlement proceeds of five clients.

    The State Bar charged Sapper with misappropriating $18,700 from two clients and a medical provider and with writing at least 10 bad checks against his trust account. He took $11,000 from one client who undergoes dialysis treatments three times a week, is unable to work and needs the money to support herself and her young children, according to the bar charges.

  • Lawrence Cohen, 45, of San Francisco resigned with charges pending in April. Terms of the resignation agreement were confidential and the bar would not reveal the nature of the charges.

  • Three southern California attorneys affiliated with a company called American Justice Publications Inc. (AJP), operated by disbarred attorney A. Brent Carruth, have been charged with misconduct. Molloy said the company distributes a publication to inmates in California prisons and local jails which carries advertisements from attorneys offering to handle criminal appeals, new trials and other services, including winning early release, an option available only in very limited circumstances.

"For the most part, it's deceptive advertising," said Molloy, who explained that prisoners signed up with various attorneys, their families "were literally cleaning out their life savings" to pay the fees, and then the attorney abandoned them.

Some of the clients were third strike offenders, Molloy said, and when faced with the possibility of life in prison received incompetent legal representation.

She said the three lawyers involved handled literally hundreds of clients whose relatives "paid whatever the market could bear — thousands in some cases," and most of the time, "absolutely nothing was done" to represent the clients competently. The three are:

  • Sheri Owen, 33, of Los Angeles, an attorney for less than two years, resigned in February just as the bar was about to file charges against her for her involvement with American Justice.

  • San Luis Obispo lawyer Leonard Milstein, 58, was placed on involuntary inactive status in June after being charged with 13 counts of misconduct, including false advertising, aiding and abetting the unauthorized practice of law, incompetence in handling client matters, and failing to communicate with his clients, account for fees or refund unearned fees. The charges stemmed from his advertisements with AJP.

  • Although the bar sought the involuntary inactive enrollment of Los Angeles attorney Thomas Stanley, another AJP advertiser, the court refused, but placed restrictions on his practice in May. The bar charged him with misconduct in 15 different cases, including abandoning clients, and not returning their files or unearned fees.

    One client, who paid him $10,000 in cash, called him 161 times over six months and he did not return a single call. Stanley also was disbarred from practice in the Ninth Circuit Court of Appeal for not prosecuting eight appeals, causing them to be dismissed.

  • The Riverside Superior Court assumed jurisdiction over the practice of Thomas Winters, 55, and he was placed on involuntary inactive status by the bar in June as a result of abdicating control of his Los Angeles office to a non-lawyer.

    The bar charged Winters, who reportedly suffers from diabetes and is partially blind, with capping, failing to disburse settlement funds to clients, and making misrepresentations to clients, insurance companies and medical providers in eight different personal injury matters.

  • Nikolai Tehin and his wife, Pamela Stevens, San Francisco attorneys, are charged with misappropriating $2.7 million from clients — $1.3 million from a settlement for more than 200 apartment tenants in Napa, and the remainder from six clients, most developmentally disabled, including two children suffering from cystic fibrosis and another child with birth defects. Both were placed on involuntary inactive status last month.

  • Lathan, an SSI practitioner from Oakland (who moved his practice to San Jose three days before his appearance in State Bar Court), had his mostly indigent clients sign a raft of papers when they retained him, which included giving him power of attorney and permission to sign a change of address form.

When seven clients did not pay his fee, said prosecutor Esther Rogers, Lathan submitted change of address forms to the post office, received all their mail and cashed their SSI checks. He also charged the clients additional money for the time he spent trying to collect his fee, and in some instances asked for money when he had not been retained.

"There is one overriding theme here, and that is that Lathan will go to any lengths to collect his fee," Rogers said. "He doesn't seem to care that the manner in which he decided to collect his fees was illegal.

His conduct is ongoing and he has no intention of repaying any money." Rogers devoted most of her time over four weeks to Lathan's case with the fulltime assistance of a paralegal and an investigator. In her order placing him on inactive status, Judge McElroy said

Lathan had "engaged in an elaborate subterfuge designed to circumvent" statutes governing supplemental security income (SSI) checks. He "has not acted innocently in his fee collection practices and has not been forthright in his dealings with clients regarding fees," McElroy wrote, adding that she believed Lathan may well continue his unsavory practices, posing a serious risk of harm to his clients and the public.

Lathan's attorney informed the bar last month that Lathan plans to resign.

Rogers, clearly pleased by the outcome of her efforts, said she's convinced the fast track program is valuable. "The results are not necessarily any different, but we expedite the process," she said. "I am able to take someone out of practice without worrying about him harming more people while his case is pending."

The fast track program frees up prosecutorial and judicial resources, new complaints are filed as the case works towards a final disposition, and "sometimes we get a resignation," Rogers said.

"This is long overdue," added dal Cerro, Rogers' boss in San Francisco. "We're doing what we should be doing."

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