The California State Bar has temporarily suspended over 1,600 attorneys for breaking the rules regarding client trust accounts, established in the aftermath of L.A. attorney Thomas Girardi’s alleged theft of millions from his clientele.
The Client Trust Account Protection Program, enacted last year, mandates lawyers to register their client trust annual accounts with the state bar, undergo a yearly self-assessment of their management of these accounts, and certify compliance and understanding of the regulations for safeguarding funds.
Upon completing this reporting, the state bar commences compliance checks and initiates investigative audits when necessary.
Initially, over 1,700 lawyers were found violating these rules and deemed “inactive” by the bar, thus barring them from legally practicing law. According to Steven Moawad, Special Counsel for the bar’s attorney discipline system, this figure has now been reduced to 1,641 after some attorneys met their requirements.
Moawad stressed that the suspension is administrative, not disciplinary; none of the 1,600 suspended attorneys have been implicated in embezzlement from their trust accounts.
He pointed out that the rules of noncompliance presently only pertain to reporting.
Reasons for non-reporting vary, including the possible death of the attorney, but tracking such status is beyond the bar’s capabilities.
Lawyers had from December 1st to April 3rd to meet the new rules. Those who did not comply were fined $75 and had until June 30th to comply. Suspensions were enforced on those who did not comply by the deadline and were shifted to inactive status in July.
Moawad admitted that these new regulations were partly a reaction to the allegations against former attorney Girardi, who is currently facing fraud charges for allegedly embezzling over $18 million from clients.
The state Supreme Court revoked Girardi’s law license last year, with the State Bar admitting to mishandling decades-long allegations against him.
Girardi earned national attention after his firm won a $333 million case against Pacific Gas & Electric, which inspired the “Erin Brockovich” film.
Girardi was diagnosed with Alzheimer’s disease but was recently deemed fit to stand trial. If found guilty, he may face a decades-long prison sentence.
