Claim Of "Pro Bono" Representation While Failing To Disclose Loan Mod Fees Clipped From Clients Among Bad Acts Landing Lawyer From Hell In Hot Water

In a recent ruling from a Federal bankruptcy court in northern California, Bankruptcy Judge Alan Jaroslovsky writes [my emphasis added, not in the original]:

• Attorney Deborah Pimentel is in the business of filing fraudulent bankruptcy petitions. She has filed at least 27 bankruptcy petitions for clients in this district, most in the last 90 days. Most of these filings, including those above, were made without the minimum documents required to commence a good faith case. These cases all lacked a list of creditors. Several lacked a Statement of Social Security Number and even a filing fee. Several are filed in a court of improper venue.

• When these cases began to show up, the court staff assumed that Pimentel was a new bankruptcy lawyer — there are many these days — and attempted to help her file proper cases. Deputy clerks patiently explained to Pimentel and her staff that without a filing fee the case would have to be dismissed and without a proper list of creditors and a Statement of Social Security Number the court could not notify her client's creditors of the bankruptcy. Only after Pimentel's repeated failure to correct deficiencies and disregard for attempts to help did the deputy clerks come to realize that Pimentel was completely uninterested in filing proper cases. At that point, the court was required to act.

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• Pimentel produced fee disclosures stating that she received no compensation, and originally represented to the court that her services were "pro bono." Upon questioning, however, she admitted that she charged each of her clients several thousand dollars for "loan modification" services.

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• The court has no way of knowing if Pimentel is performing any sort of valuable service for her clients or is merely preying on their desperation. If Pimentel had only paid a little more lip service to the formalities of bankruptcy filings, the court would be content to dutifully dismiss each of her fraudulent cases without making serious inquiry into her schemes. However, by her cavalier disregard of basic filing requirements Pimentel created a great deal of extra work for a hard-pressed clerk's office. The court is now compelled to sanction Pimentel for her conduct.

For more, see In re: Deborah Pimentel, Misc. No. 10-101, No. 10-10481., 10-10480, 10-10494, 10-10509 (USBC N.D. Calif. March 8, 2010).