Metropolitan News-Enterprise


Tuesday, September 19, 2006


Page 3


Lawyer Convicted in Insurance Plot Resigns From State Bar


By a MetNews Staff Writer


A suspended Beverly Hills lawyer sentenced to 90 months in prison for attempting to sink a yacht to collect insurance money has tendered his resignation from the State Bar.

Bar officials reported that Rex DeGeorge offered to give up his license Sept. 11 rather than face disbarment, which would be mandatory following exhaustion of his appeals following conviction of crimes involving moral turpitude.

DeGeorge has been on interim suspension since being convicted of conspiracy, mail and wire fraud and perjury in 2002 after a month-long jury trial before U.S. District Judge Lourdes G. Baird, who has since retired. Jurors agreed that DeGeorge, who has a history of involvement with sunken yachts, attempted to sink the 76-foot Principe di Pictor, which was custom built for $1.9 million.

The yacht had been shuffled through a series of corporations to hide DeGeorge’s ownership and make it appear to be worth $3.6 million, prosecutors said.

In a published opinion filed in August 2004, a three-judge panel of the Ninth U.S. Circuit Court of Appeals unanimously affirmed the conviction, but remanded for reconsideration of the sentence. Baird imposed the same 7.5 year sentence as previously, but under a different approach.

In its 2004 opinion, the appellate panel found that Baird erred in computing the Sentencing Guidelines range, improperly applying an “obstruction of justice” enhancement based on DeGeorge having committed perjury in a related civil case. In that case, the yacht’s insurer succeeded in rescinding the policy it had issued and defeated DeGeorge’s claims of breach of contract and bad faith.

On remand, Baird rejected the prosecution’s efforts to reinstate the enhancement. But because the Supreme Court ruled in the interim that the guidelines are advisory only and that the court may impose any sentence that is reasonable in light of the applicable statute, the judge concluded that no reduction in the sentence was necessary.

Earlier this year, the appellate panel affirmed in an unpublished memorandum. Judges Michael Daly Hawkins, Richard A. Paez, and Susan Graber said they could find no fault with Baird’s reasons, including her findings that DeGeorge was “consistently unrepentant” and “deceitful and evasive.”

Evidence at DeGeorge’s trial showed that in November 1992, he and two associates set out from Viareggio, Italy for the Principe’s maiden voyage.

After leaving Naples without a captain on Nov. 6, 1992, the three used power tools to cut holes in the bottom of the boat, but were unable to sink it.

Sometime after daybreak, Italian authorities patrolling the coast spotted the craft, and DeGeorge and his companions got into lifeboats.

Prosecutors said the three men used the time before authorities arrived at the yacht to concoct a story about a Russian captain they had supposedly hired who tried to sink the boat before taking off in a black speedboat.

After being briefly incarcerated in Italy, the three were allowed to return to the United States.

They filed a claim with the yacht’s insurer, Cigna, using the story about the Russian captain, but the insurance company refused to pay.

Instead, Cigna successfully sued to rescind the yacht’s $3.5 million policy because of misrepresentations, and because the company had not been told of the role of DeGeorge—who had previously received insurance compensation after claiming two of his boats sank and that another was stolen—in the venture.

DeGeorge’s perjury convictions related to his testimony in the civil case, in which he said that he had not purchased power tools and did not know they were aboard the yacht.


Copyright 2006, Metropolitan News Company