TALLAHASSEE, FLA---Sometimes, hopefully rarely, people are taken advantage of by someone they turned to when they were vulnerable and needed help. Deceived by someone they had every reason to believe they could trust. Violated by someone they should have been able to trust.
Discovery of such betrayal shakes our faith. Even more so when it occurs within the sanctity of an attorney-client relationship. And still more when the duplicity becomes so commonplace at a law firm that it's simply dismissed as a routine business practice.
The public relies upon The Florida Bar to fulfill its responsibilities to process and investigate inquiries and complaints of lawyer misconduct as mandated by the Florida Supreme Court. Recent events demonstrate The Florida Bar's role in regulating lawyer misconduct is not meeting the public's needs.
Hill resigned from The Law Offices of Eddie Farah on Oct. 13, 2004 because its overcharging practices presented him with an irreconcilable conflict of interest as an attorney representing its clients. His resignation letter speaks for itself. Hill maintains, "The firm's clients must be informed of its practice of misappropriating funds from similarly situated clients. Without that information, clients cannot make informed decisions concerning the law firm they choose to entrust with their legal representation. On the other hand, disclosure of such information would expose my employer and its principals to risk of financial, professional and criminal sanctions."
Hill considered the conflict of interest sufficiently urgent to forego giving advance notice of his resignation to The Law Offices of Eddie Farah. He explains, "I couldn’t very well say, ‘Here’s two weeks notice of my resignation because you have been defrauding your clients and I’ve reported you to the State Bar.’ I didn’t think that would be a workable situation. What would I do for the two weeks, inform clients that the firm was defrauding other clients, or keep my mouth shut and violate my ethical responsibilities?"
City of Jacksonville and State of Florida officials refused to investigate reports of the law firm's overcharging practices, ostensibly because The Florida Bar has exclusive jurisdiction. By letter dated Jan. 10, 2005, the firm's repeated acts of consumer theft/fraud were reported to the Office of Florida Attorney General Charlie Crist, who is now also a 2006 gubernatorial candidate who says, "I am running for Governor to fight for the people of Florida...." Hill's letter to Crist's office included supporting documentation from ten cases in which the firm grossly overcharged clients, and emphasized, “Given the frequency and duration of [the firm’s] overcharging practice, many clients and considerable sums of money are involved in these matters."
Crist's Office responded by letter dated Jan. 24, 2005 simply identifying The Florida Bar as the agency responsible for reviewing grievances against Florida lawyers. That letter gave no reason for failing to investigate offenses committed by the law firm itself, a professional association. Says Hill, "I've been a lawyer for over eighteen years and know of no legal authority exempting law firms operating as professional associations from being investigated and, if appropriate, prosecuted under Florida's Deceptive and Unfair Trade Practices Act".
To Hill's surprise, a full year went by with no contact from anyone on behalf of The Florida Bar to investigate his report of widescale fraud and misappropriation of clients' funds by The Law Offices of Eddie Farah. Not a single inquiry from The Florida Bar by letter, email or telephone.
"...[T]he Office of the Attorney General for the State of Florida is the enforcing authority for Florida Statutes 501, Part II. This is the unfair and deceptive trade practices act and violations of that act carries penalties of $10,000.00 per violation."
Agreeing with Jefferson's assessment, Hill sent a copy of this Aug. 29, 2005 email to Attorney General Charlie Crist again requesting that he initiate an investigation into the firm's overcharging practices if he considered it appropriate to do so. Unsurprisingly, Hill heard nothing further from Crist's office.
By email dated Oct. 27, 2005 Spangler succinctly responded, "The file to which you refer was closed. The grievance committee considered the matter after investigation and an audit by the Bar Staff Auditor, and found there was no probable cause to pursue disciplinary proceedings. They did elect to send a letter of advice to the firm."
According to The Florida Bar's web site, "The Florida Bar has an important role in the regulation of lawyer misconduct. A complaint of unprofessional conduct against a Florida Bar member is a serious matter. The processing and investigation of inquiries and complaints are a basic responsibility of the Bar as mandated by the Florida Supreme Court. The Bar seeks to protect the public from unethical lawyers."
It's difficult to fathom how The Florida Bar's grievance committee could reach an informed decision concerning probable cause to pursue disciplinary proceedings without ever even contacting the person reporting the misconduct. According to Hill, "The firm overcharged hundreds of unsuspecting clients over a period spanning several years and the combined misappropriated funds are estimated at several hundred thousand dollars."
Hill reiterated his concerns to Spangler by letter dated Oct. 31, 2005. Questioning the thoroughness of the grievance committee's investigation and audit by the staff auditor, he sent a public records request to The Florida Bar for its complete file. It was only after repeated follow up requests that the Bar finally complied and produced what it claims to be the complete records. Notably, the records offer no clues as to the basis for the grievance committee's finding of no probable cause for disciplinary proceedings. There are no indications any Bar investigators even contacted any of the witnesses Hill identified by name. Even the grievance committee's Nov. 8, 2005 Notice of No Probable Cause and Letter of Advice fails to explain the basis for its finding.
Why is Hill speaking out about his discovery of The Law Offices of Eddie Farah's widespread overcharging practices? He explains, "It’s been well over a year since the firm’s misappropriation of clients' funds was reported to The Florida Bar and Florida Attorney General Crist's office. Crist's office deferred to The Florida Bar to investigate the reported fraud. The Florida Bar in turn closed its file without even contacting the person reporting the misconduct or, apparently, any of the witnesses who had been identified. It's hard to have faith in a system that allows such attorney misconduct to go unacknowledged and uncorrected even after it's been identified, documented and reported. Plainly stated, justice hasn’t been served and nobody seems too concerned about it. Who protects the clients who were overcharged by The Law Offices of Eddie Farah? This experience makes me wonder if I’m naive in believing the misuse of clients' funds to be among the worst offenses a lawyer can commit."
It is undisputed The Law Offices of Eddie Farah overcharged many clients by substantial sums. Attorney John A. Weiss, Esq. of Tallahassee represented the firm's principals, attorneys and brothers Eddie and Chuck Farah, before the Bar. Weiss admitted the firm's overcharges in a Sept. 22, 2005 letter to The Bar stating,
"As an aside, I would advise you that the firm has refunded in excess of $120,000.00 ... to those clients who were inadvertently overcharged for costs. Approximately $10,000.00 remains undisbursed because the firm, and the private investigator it subsequently hired, could not find the individuals."
That certainly sounds like a lot of money to be 'inadvertently' overcharged. The firm would have to overcharge 400 clients by $300 each to reach $120,000. Even The Florida Bar's own audit of the firm's trust account confirmed $130,000 in overcharges and a lack of substantial compliance with Bar rules governing trust acounts in the years 2002 through 2004. The report was prepared by Certified Public Accountant and Certified Fraud Examiner James F. Wells following his audit of Farah's trust account records and procedures. Wells' Audit Report notes,
"Administrative costs that were not substantiated by documentary evidence were charged on some settlement statements in personal injury cases. These administrative costs were in excess of the documented costs such as copies, faxes and postage. Rule 5-1.2(b)(4) requires documentary support for all disbursements from the trust account. These costs were not authorized by the clients."
In discussing corrective action taken, Wells states,
"The firm reviewed client files and settlement statements to determine the specific clients that had been charged unsubstantiated administrative costs. Refunds totaling approximately $130,000, including interest, were issued to those clients."
Wells concludes,
"In my opinion, Mr. Farah's trust accounting records and procedures in connection with the documentation of costs paid from trust funds during the period from January 1, 2002 through December 31, 2004 were not in substantial compiance with The Florida Bar's rules governing trust accounts." (Emphasis supplied).
Hill is often asked whether cronyism is at the heart of The Florida Bar's failure to properly investigate and pursue disciplinary proceedings. He responds, "While I hope cronyism didn't come into play, The Florida Bar's role in investigating and regulating lawyer misconduct certainly seems badly in need of a major overhaul."
According to a Dec. 1, 2005 article in The Florida Bar News a first look at an "extensive review of the Florida Bar’s disciplinary process" was on the agenda for the Bar's Board of Governors' recent Dec. 16, 2005 meeting at Amelia Island. Bar President-elect and Board of Governors member Henry Matson Coxe III chairs the Special Commission on Lawyer Regulation. Coincidentally, Coxe's law office is within easy walking distance just down the street from The Law Offices of Eddie Farah in Jacksonville.
By email to Coxe on Dec. 5, 2005, Hill requested the manner in which his complaint of misconduct was handled be included in the Board of Governor's "extensive review" of the Bar’s disciplinary process at the upcoming meeting. Hill says, "I've heard nothing from Coxe concerning the matter and don't expect to since it's been almost three months since I contacted him. I copied the majority of the Florida Bar's Board of Governors on my email to Coxe and I haven't heard from any of them either."<
Our system of government demands that the legal profession command the public's full trust and confidence. A recent survey by The Florida Bar's Research, Planning and Evaluation Department revealed 68% of those surveyed say the public does not have confidence in the legal system. Given Hill's recent experiences, it's surprising that percentage isn't even higher.
Under the current system, Florida’s attorneys are licensed, supervised and regulated by the Florida Supreme Court through The Florida Bar, which is the delegated administrative arm of the Court. While self-regulation of the profession by The Florida Bar may have been a worthwhile experiment, it is becoming increasingly apparent that the Bar simply cannot even-handedly regulate lawyer misconduct. The Florida Bar's failure inthis regard is a disservice to both the public and the professionally responsible attorneys who suffer by association.
Among the greatest flaws in The Florida Bar's grievance and disciplinary process are inadequate investigation and documentation to support grievance committee decisions. Written records are not ordinarily kept of grievance committee proceedings. The discussions are typically oral and not, routinely, recorded. This fosters cronyism characterized by a lack of meaningful investigations and nod-nod, wink-wink decisions when well-connected lawyers are involved. Many law firms are political juggernauts that enjoy a unique sheld against consequences for violating The Rules Regulating The Florida Bar.
Is there a solution to The Florida Bar's inability to appropriately regulate lawyer misconduct? It clearly doesn't seem capable of investigating itself. Maybe the current system cannot be fixed and must instead be changed.
Legislators, public officials and special interest groups have in the past called for the regulation of the legal profession by an entity other than the Supreme Court of Florida. The Florida Bar has fought those efforts at every turn.
Florida's Department of Business and Professional Regulation (DBPR) is the logical entity to take over since it already oversees licensing and regulation of most other professionals including accountants, veterinarians, contractors and about 200 other occupations in the State. The DBPR would likely be a far better watchdog over the legal profession than the current system of the Bar and the Supreme Court of Florida. Just take a look at the Bar's 'investigation' of The Law Offices of Eddie Farah's overcharging practices.
