Federal Appeals Court Upholds Ruling Ordering California Attorney To Return Million$ Ripped Off From Homeowners Seeking Foreclosure Rescue Help

In Sacramento, California, The Recorder reports:

• A California attorney will have to cough up millions of dollars he collected in a mortgage relief scheme despite his argument that the federal agency that fined him had no authority to do so, a federal appellate panel said [].
  
  The federal Consumer Financial Protection Bureau in July 2012 filed a civil enforcement action against Chance Gordon, seeking to disgorge $11.4 million he received between January 2010 and July 2012 from underwater homeowners seeking help saving their homes from foreclosure. The CFPB found that Gordon had engaged in a misleading ad campaign that, among other things, erroneously suggested he could help his clients and that he had a government affiliation.
  
  ***
  Writing for a 2-1 majority, Circuit Judge John Owens said that both sides agreed Cordray's initial appointment was faulty. President Obama renominated him in January 2013, and he was confirmed by the U.S. Senate six months later.
  
  Neither Gordon nor the Judicial Education Project cited a valid case showing that Cordray's first appointment problem stripped the court of its Article III jurisdiction, Owens wrote. Moreover, the executive branch retained an interest in seeing federal laws enforced, he continued.
  
  And "because the CFPB had the authority to bring the action at the time Gordon was charged, Cordray's August 2013 ratification [of the charging decision], done after he was properly appointed as director, resolves any Appointments Clause deficiencies," Owens wrote.
  
  Owens was joined in his opinion by U.S. District Judge William Sessions of the District of Vermont, who was sitting by assignment.
  
  The majority did remand part of the case to the district court, asking Anderson to consider whether Gordon should have to repay money he collected before relevant portions of the Consumer Financial Protection Act and related rules were enacted.
  
  The California State Bar placed Gordon on involuntary inactive status in November 2012. His attorney, Gary Kurtz, did not return a message left [].(1)

For more, see Split Panel OKs Lawyer's $11 Million Fine (may require paid subscription; if no subscription, GO HERE, then click the appropriate link for the story).

For the court ruling, see Consumer Financial Protection Bureau v. Gordon, No. 13-56484 (9th Cir. April 14, 2016).

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression. [...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.

----------------------------

(1)The California State Bar's Client Security Fund is a public service of the California legal profession. The State Bar sponsored the creation of this fund to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.