Saturday, June 15, 2013

State Bar Judge To Attorney Attempting To Shift Blame To Scheming Client In Investor-Screwing, $1M Trust Account Ripoff: "When Your Sole Job Is To Protect The Henhouse, You Are Not Allowed To Trust The Fox With The Chickens!"

From the California Bar Journal:
  • A Woodland Hills attorney has been stripped of his law license for misappropriating nearly $1 million intended for movie projects. Robert M. Victor [#156232], 47, was disbarred April 7, 2013 and ordered to make restitution and comply with rule 9.20 of the California Rules of Court.

    Two different film companies had entered into agreements with Victor's client, Rosemax Media LLC, in 2011 under the auspices that they would be working together to produce films. The film companies, Triton Films Inc. and SBDL Productions LLC, wired their investment money to Victor's client trust account with the understanding that Rosemax would also invest in the film project. The consolidated funds were to remain untouched in the trust account until all agreements involving the films were finalized and executed.

    Instead, Rosemax never followed through with its agreed-upon investments, and Victor immediately began to disburse money at the request of Rosemax CEO Joseph Q. Bretz. Less than two days after Triton deposited the first $375,000 of its $500,000 investment in a movie to be called “The Zone,” Victor had removed all of Triton’s funds through transfers to his firm and various parties. Similarly, SBDL’s $475,000 investment in a film titled “Light Years” shrank to $33,336.10 within three days of deposit.

    Both Triton and SBDL asked for confirmation that Rosemax had deposited the money it had agreed to, $1.5 million in the case of Triton and $925,000 per its agreement with SBDL. After the companies continued pressing the issue, Victor provided them with account statements which turned out to be bogus, bearing no reference to Victor or his firm and a different account number than Victor’s client trust account. Even after SBDL filed a civil action in court accusing Victor of conversion, fraud, negligence and racketeering, Victor continued to draw on the company’s funds in his trust account.

    The State Bar Court found Victor culpable of two counts of misappropriation and two counts of failure to cooperate in a State Bar investigation. At the time of the court’s Sept. 21, 2012 disbarment recommendation, Victor had not repaid any of the money to Triton or SBDL.(1)

    At trial, Victor argued that Rosemax’s CEO Bretz had swindled both him and the two companies and “spent considerable time and energy seeking to explain how impressive and charismatic Bretz was in the entertainment world,” State Bar Court Judge Donald F. Miles wrote in his recommendation.

    Miles dispelled that notion, saying Triton and SBDL had taken steps to protect themselves from Bretz and were only put at risk because Victor disregarded his fiduciary duties.

    When your sole job is to protect the henhouse, you are not allowed to trust the fox with the chickens, no matter how reassuring that carnivore may purport to be,” Miles wrote.
Source: Disbarred attorney scammed film partners in movie making deal.

(1) The State Bar of California Client Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a California-licensed attorney.

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:

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