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Kabateck, Geragos Lambaste State Bar Over Investigation
By a MetNews Staff Writer
Former Los Angeles County Bar Association President Brian S. Kabateck and criminal defense lawyer Paul J. Geragos yesterday ridiculed a State Bar investigation of them in connection with the $37.5 million settlement of class actions on behalf of descendants of the Armenian genocide victims against two insurers that had failed to pay life insurance policies.
After questions were raised as to the distribution of the funds—with some beneficiaries denying receipt of any of the proceeds—the lawyers were investigated by the State Bar twice, then by independent investigators, and no wrongdoing was found.
Kabateck, of Kabateck LLP, told the METNEWS:
“This is a political stunt by the State Bar.”
He took a slap at the Los Angeles Times for dredging the matter up and, he alleged, failing to report salient facts.
Geragos, of Geragos & Geragos, commented that he’s “infuriated” over the announced probe and said that when the investigation ends, he’ll go on the offensive.
“We plan on taking action” in court, he said.
State Bar Chair
The investigation was announced in a State Bar press release yesterday. It quotes State Bar Chair Ruben Duran of the Ontario office of Best Best & Krieger LLP as saying:
“The State Bar is charged with protecting the public. Confidence in our ability to do so has unfortunately been shaken in recent times by the Girardi matter and what it represents. Restoring and maintaining the public’s trust in the disciplinary apparatus of this agency is imperative.”
He continued:
“To that end, it is important to emphasize that the State Bar investigates possible misconduct wherever it might occur. The status of attorneys, or the size of their practice, cannot and will not impact our decisions to investigate misconduct.”
‘Girardi Matter’
Duran’s allusion to the “Girardi matter” refers to the State Bar’s investigation into misconduct on a massive scale by Thomas V. Girardi, a once prominent personal injury attorney, now disbarred, and the agency’s public admission that it was derelict having spurned complaints about the influential lawyer over a period of decades.
Geragos remarked that Duran’s mention of Girardi is telling. He maintained that “all they’re trying to do is deflect” attention from their mishandling of Girardi’s disciplinary matter.
Kabateck said in a statement:
“The undisputed facts are and will always be that an independent third-party appointed, approved, and overseen by the Court (like in any class action) distributed the settlement funds to the class members. Neither Mr. Kabateck nor Mr. Geragos were involved in any decision relating to individual payments to victims, nor were they able to decide, review, or influence claims made by class members.”
He added:
“We have fully cooperated with multiple prior investigations and inquiries conducted by the State Bar and others (all of whom found no wrongdoing). We will continue to provide evidence to prove, once again, that there was no wrongdoing of any kind by our firm.”
Letter to Reporters
In an April 5 letter to two Times reporters, Kabateck explained:
“It has been well known that I had nothing to do with the claims process, and never made any decision on a single claim. As with all class action settlements, the lawyers in this case had no authority to make decisions on claims. More importantly, I had absolutely no ability to decide, review, or influence any claims.”
All claims were acted upon by an administrator, he noted.
In 2011, Kabateck and Geragos sued attorney Vartkes Yeghiayan, now deceased, and his wife and law partner, Rita Mahdessian, for allegedly misappropriating settlement funds. Kabateck said in his April 5 letter:
“As far as the charitable distributions are concerned, all of the money has been accounted for and was distributed to legitimate charities with the exception of money taken by Vartkes Yeghiayan and siphoned to his phony charities that were exposed by Mark Geragos and me.
“I am proud that the money we recovered went towards establishing the Center for the Study of Law and Genocide which does great work in teaching students about genocide and preparing future generations to fight for justice on behalf of those impacted by crimes against humanity.”
Exception to Confidentiality
State Bar investigations are normally confidential. The press release said that Duran was waiving confidentiality pursuant to Business and Professions Code section 6086.1(b)(2) which provides, in part:
“The Chief Trial Counsel or Chair of the State Bar may waive confidentiality, but only when warranted for protection of the public. Under those circumstances, after private notice to the licensee, the Chief Trial Counsel or Chair of the State Bar may issue, if appropriate, one or more public announcements or make information public confirming the fact of an investigation or proceeding, clarifying the procedural aspects and current status, and defending the right of the licensee to a fair hearing.”
(In defending that right, Duran said in the statement quoted in the press release: “I want to stress that in and of itself this announcement is not an indication of any misconduct by the attorneys being investigated.”
Geragos and Ellen A. Pansky of Pansky Markle, who specializes in State Bar disciplinary defenses, protested to Duran and to State Bar Chief Trial Counsel George Cardona the intended public disclosure of the investigation. In a Sept. 23 letter, marked “confidential” but released to the METNEWS yesterday, they pointed out that under §6086(b)(2), “the Chair may only waive confidentiality if the licensee whose conduct is being investigated waives confidentiality or, when warranted for public protection, after notice to the licensee.”
The letter notes that the class action was filed years ago and fully resolved eight years ago, and that “no legitimate ‘public protection’ concern exists.” It says that the judge presiding over the case “praised counsel’s work as to the specific issue you seek investigation,” setting forth, with emphasis added by Geragos and Pansky:
“The Court finds that the amount sought by counsel is reasonable, that the work performed was efficient, effective and valuable to a proper accounting and recoupment of misdirected settlement funds.”
Newspaper Lauded
Duran was quoted in the press release as saying:
“[T]he State Bar expresses gratitude to the LA Times for its excellent reporting on the distribution of Armenian Genocide settlement funds.”
The reporting was by two respected Times reporters, Harriet Ryan and Matt Hamilton, who have written in-depth articles on Girardi.
However, Kabateck declared: “Contrary to the statement in the LA Times article, multiple written responses have been provided to their untrue allegations…, but the LA Times continues to deliberately withhold the fact that they ignored repeated invitations to have an independent forensic analysis of the distribution of the settlement funds be conducted by a CPA and lawyer of their choosing.”
A spokesperson for the Times said: “The Times stands behind our reporting. Our published investigation is the result of reviewing decades of court filings in various jurisdictions and going to court to obtain access to hundreds of pages of sealed court records.”
Two Insurers
There was a $20 million settlement in 2004 with a New York insurer in an action filed in 1999 and a $17.5 million settlement with a French company in 2005. The Times’s reports have centered on the latter settlement.
A report by Ryan and Hamilton that appeared online yesterday says:
“The $17.5-million settlement with the Paris-based insurer was supposed to go to descendants of the genocide and to Armenian charities selected by a newly created French nonprofit. But The Times detailed troubling irregularities. The French nonprofit was never established; Christian churches said they never received the hundreds of thousands of dollars they were supposed to get; some of the money was sent to the pet charities of Geragos, Kabateck and others involved in the case, including their alma mater, Loyola Law School; and hundreds of thousands of dollars were directed to sham claimants.”
Kabateck protested yesterday:
“[T]he LA Times’ reference to a world-class university that established a highly-regarded center to study genocides (like the Armenian Genocide, the Holocaust, the Cambodian Genocide, and other crimes against humanity) as a ‘pet’ charity is offensive and insensitive.”
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