Two Attorneys Placed On Inactive Status As Cal. State Bar Alleges Lawyer-Renting Racket, Upfront Fee Loan Modification Ripoffs In Seperate Actions

In San Francisco, California, Metropolitan News Enterprise reports:

• The State Bar Court has ordered attorneys Eric D. Johnson of Los Angeles and Mark A. Shoemaker of Long Beach placed on involuntary inactive enrollment over accusations of loan modification misconduct, the State Bar said yesterday. State Bar Court Judge Richard Honn, in separate actions, concluded that the conduct of Johnson and Shoemaker posed a “substantial threat of harm” to their clients or the public, and ordered the enrollments under Business and Professions Code Sec. 6007.

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• According to the State Bar, Johnson associated with several non-attorney legal organizations, lending his name and status as an attorney to a firm offering bankruptcy filing and assistance, a business handling forensic audits and loan modifications, and two other loan modification companies.

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• Shoemaker, whose case was investigated and prosecuted with the help of the California Department of Real Estate, has owned and operated a loan modification business called Advocate for Fair Lending since 2008. Shoemaker “used Advocate and his status as an attorney to convince cash-strapped homeowners to pay him thousands of dollars in hopes of saving their homes from foreclosure,” Honn wrote. Shoemaker, however, “often did little to nothing to help these clients,” Honn said. “In fact, many of these homeowners were worse off after retaining [Shoemaker’s] services.”(2)

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• In addition to the involuntary inactive enrollments of Johnson and Shoemaker, the State Bar said its Office of Chief Trial Counsel has obtained the resignations of 13 attorneys involved in loan modification misconduct since creation of the Loan Modification Task Force in April 2009. Five loan modification trials are pending, the State Bar said, and another 2,000 active investigations related to loan modification are being conducted.

For the story, see State Bar Court Places Local Attorneys on Inactive Status.

For The State Bar of California press release, see Two more loan foreclosure lawyers placed on involuntary inactive enrollment.

(1) Reportedly, Honn cited cases in which homeowners were promised that their homes would not be foreclosed but the homeowners lost them anyway after having made significant payments to the non-attorney companies. According to the story, Johnson “lacked control and failed to supervise” any of the organizations with which he was associated, Honn wrote. “This lack of control and failure to supervise consequently led to, among other things, the unauthorized practice of law, misrepresentations and client harm.”

(2) Shoemaker contended that he was merely the president of Advocate and did not represent any Advocate clients in a legal capacity, but Honn rejected the argument, the story states. “Advocate’s clients were also [Shoemaker’s] clients,” he wrote. “An attorney cannot use a power of attorney form to absolve themselves of the ethical mandates they have sworn to uphold.”