X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
SACRAMENTO — A federal grand jury is investigating a group of lawyers who are under fire for allegedly abusing the state’s unfair competition law — raising for the first time the specter of criminal indictments against the attorneys. The grand jury investigation appears focused on the Beverly Hills-based Trevor Law Group and other attorneys who have been accused by the State Bar and the attorney general’s office of unethically using the law — Business & Professions Code � 17200 — to leverage unethical settlements from small businesses. Although the U.S. attorney’s office in Sacramento would not confirm it was conducting an investigation, the State Bar said it has shared information about the Trevor firm with federal investigators. Also, a former business partner of the Trevor firm said he received a federal grand jury subpoena several weeks ago. He said he came to Sacramento with his attorney, but did not address grand jurors. Instead, he spoke to a federal prosecutor and an FBI agent. “They apparently were happy with [the information] because I never heard from them,” said the witness, Morton Reed. Reed said he believes federal investigators might be pursuing a mail fraud or conspiracy case. The feds asked him a lot of questions about letters written by Trevor lawyers, Reed said. The feds also asked Reed whether he knew a Sacramento solo attorney named Brian Kindsvater, whom Attorney General Bill Lockyer said was one of the accused attorneys. Of the attorneys under investigation, Reed said he only knows those from the Trevor firm. None of the allegations against Kindsvater has resulted in action by the Bar or other prosecutors. Kindsvater’s attorney, Stephen Horan of Sacramento’s Porter, Scott, Weiberg & Delehant, said Kindsvater had been contacted by federal prosecutors to be a witness. Kindsvater once represented one of the Trevor partners in a Sacramento case. Reed is the CEO of LitFunding Corp., a Los Angeles-based company that gives money to lawyers to fund litigation and then gets a cut of a firm’s profits. LitFunding gave about $600,000 to the Trevor firm. State Bar investigators allege in court documents that Trevor lawyers misled LitFunding in order to get the money. LitFunding had talked about giving $1 million to Trevor, but Reed said he turned off the tap last fall when he began to hear allegations that Trevor lawyers were acting unethically. “We knew we did the right thing the minute the U.S. attorney contacted us,” Reed added. LitFunding is now battling with the Trevor firm in court over $400,000 Trevor says it is owed by LitFunding. But that money could be the least of Trevor’s worries. Besides the federal investigation, Lockyer has filed a civil suit against the firm. On top of that, the Bar has opened disbarment proceedings against the three attorneys there — Damian Trevor, Shane Han and Allan Hendrickson. An AG spokesman said he was surprised to hear about a federal investigation. The lawyer for the Trevor firm, Beverly Hills solo Kevin Gerry, said he hadn’t heard about a federal investigation into his clients’ activities. But, he said, since the Trevor attorneys deny Bar allegations of mail fraud and conspiracy, any federal charges would be “completely unfounded.” The Bar and AG’s office accuse the Trevor lawyers of acting unethically in suits they filed against thousands of Southern California auto repair shops and restaurants. In the cases, the lawyers used the state unfair competition statute to sue over minor regulatory infractions. The firm’s activities have been at the center of a movement to reform the law in Sacramento. Legislators have proposed several bills, but the influential plaintiffs bar has vowed to block any effort to gut the statute, which it considers to be a powerful weapon in court. Reformers, led by the business-backed Civil Justice Association of California, are waiting to see what happens when the bills go to the Senate and Assembly Judiciary Committees, although leaders of both have close ties to plaintiffs attorneys. Reed, the head of LitFunding, said his firm was caught up in the controversy over Trevor’s activities. He said his company has been around for three years and has 600 clients in 25 states. Although Bar lawyers accuse Trevor of sharing attorneys fees with LitFunding — which is illegal — Reed said “our hands are clean.” That’s because LitFunding didn’t get involved in actual cases, and left everything up to Trevor attorneys, Reed said. The only reason LitFunding was dinged in the Bar investigation is because the Trevor lawyers said they were completely dependent on LitFunding, Reed said. “It isn’t fee-splitting because we don’t influence or interfere with cases,” Reed added.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.