$6.4M Fine in Ohio for Illegal Practice of Law

October 14, 2009
$6.4M Fine in Ohio for Illegal Practice of Law
Filed at 6:09 p.m. ET
COLUMBUS, Ohio (AP) — The Ohio Supreme Court on Wednesday ordered two estate planning companies and their co-owners to pay nearly $6.4 million, the state’s largest-ever fine for the fraudulent practice of law.
The owners and employees of American Family Prepaid Legal Corp. and Heritage Marketing and Insurance Services Inc. of Columbus committed more than 3,800 acts of unauthorized law practice by participating in a ”trust mill” operation, the court said.
The ruling comes about six years after a complaint by the Columbus Bar Association against the companies was resolved when American Family, Heritage and its owners signed an agreement in which they promised to stop marketing and preparing trusts and other estate planning services.
From March 2003 to March 2005, the companies targeted Ohioans 65 and older with exaggerated mail and magazine advertising aimed at dissuading them from obtaining a will. Sales representatives who were not licensed as attorneys to advise on estate planning gave ”high-pressure” in-home presentations in which customers were told they would save money by purchasing one of the companies’ living trusts, the court said.
The court permanently barred the California-based companies, and co-owners Jeffrey and Stanley Norman, from marketing, selling or preparing living trusts, estate planning documents and other legal services in Ohio. Other company employees were ordered to pay fines ranging from $2,500 to $10,000.
The court noted that it has found other similar trust mills illegal, and that such trusts may not be needed, may be insufficient or could be harmful for certain people.
”We have repeatedly held that these enterprises … are engaged in the unauthorized practice of law. We have also repeatedly held that by facilitating such sales, licensed lawyers violate professional standards of competence and ethics,” the court wrote. ”Today, we reaffirm these holdings and admonish those tempted to profit by such schemes that these enterprises are unacceptable in any configuration.”
American Family had argued that the sales were legal because it had registered as an operator of a prepaid legal services plan. A message left seeking comment was not immediately returned by the office of Andrew Bucher, a lawyer representing the companies.
The court said a customer buying a living trust from American Family paid a $1,995 fee for several legal services, but received only the preparation of a living trust and related estate-planning services.
The trust documents were prepared by non-attorneys in California, and a lawyer in Columbus was paid a flat fee for each trust he approved, despite rarely speaking with any of the customers, the court said.
Fees collected will go to the state’s Attorney Services Fund, which is used to investigate complaints of alleged misconduct and to support a clients’ security fund and legal education commission.
Those financially harmed through the illegally activities also may be able to successfully sue.

WikiLeaks: a new risk for lawyers who counsel the very rich?

Most law is practiced in private.  But the practice of  law is not immune from whistleblowers who now have a powerful option:  WikiLeaks.   (Use Google to find WikiLeaks site.) From the WikiLeaks site: ” Wikileaks is developing an uncensorable Wikipedia for untraceable mass document leaking and analysis. Our primary interest is in exposing oppressive regimes in Asia, the former Soviet bloc, Sub-Saharan Africa and the Middle East, but we are of assistance to people of nations who wish to reveal unethical behavior in their governments and corporations. We aim for maximum political impact. Our interface is identical to Wikipedia and usable by all types of people. We have received over 1.2 million documents so far from dissident communities and anonymous sources.”  (emphasis added).

See, in particular, the following entries, including links to confidential memoranda:

Barclays Bank gags Guardian over leaked memos detailing offshore tax scam, 16 Mar 2009

Whistleblower exposes insider trading program at JP Morgan

Is LegalZoom engaged in the unauthorized practice of law in Connecticut?

Practice Book Section 2-44a defines the practice of law.  Is LegalZoom practicing law? Comparing what LegalZoom does to the definition of the practice of law produces an unsurprising result: arguments pro and con.  More to come.  

For PB Sec. 2-44a click on the link below and scroll to 2-44a.

Connecticut Practice Book 2009 – Part 1  (PDF)  HTML Links