Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Having failed the California Bar exam on his first try fresh out of law school in 1982, Gregory Bodell gladly accepted a law clerk position with Los Angeles attorney Lynn Stites. Young, naive and fiercely eager to please, as Bodell puts it now, he adopted Stites, a successful insurance lawyer, as his mentor and father figure. He dedicated himself to the well-being of the firm, joining it as an associate upon passing the Bar in 1983. His future seemed bright. On Tuesday, though, Bodell goes to trial in the State Bar of California’s Bar Court in Los Angeles to try to claw his way back into the law after 10 years of banishment. In 1990, seven years after winning the law license he had craved since childhood, Bodell voluntarily relinquished it in disgrace, after being targeted as one of about two-dozen Southern California lawyers, and perhaps a dozen non-lawyers, involved in one of the largest insurance scams in United States history. Collectively called “the Alliance,” the three-dozen participants — masterminded by Stites — worked together to bilk major insurers, including Aetna Casualty and Surety Co. and Allstate Insurance Co., out of hundreds of millions of dollars by manufacturing claims and unnecessarily prolonging litigation for seven years in the ’80s. Bodell’s role, according to State Bar prosecutors, was to manage lawyers involved in the scheme by advising them how to allege complaints that could trigger insurance coverage in litigation. Bodell — who blames the man he calls “the now-infamous Lynn Boyd Stites” for leading him astray — pleaded guilty in 1991 to one count of mail fraud, eventually serving five years probation and 150 days in a halfway house. He also paid a $10,000 fine. So much for a promising career. “At 34 years of age, my life was turned upside down,” Bodell, now 44, wrote in State Bar Court papers. “Under the tutelage of my ‘mentor,’ I lost my direction from the ethical and honest path.” State Bar Court Judge Michael Marcus, who will preside over the trial in In the Matter of Gregory Scott Bodell, 99-R-12244, could face a tough decision. How instrumental was Bodell’s role in the Alliance scam, and is he someone who, as prosecutors contend, lacks the moral center to practice law ever again? Or was he a minor Alliance character, as the defense says, who was under the influence of a charismatic, albeit “amoral,” employer? And is he, as they add, so remorseful that he has gone beyond the call of duty to make amends to society in his 10 years without a license? And what will he make of the fact that a handful of the very insurance lawyers Bodell battled in the tainted cases are now standing up for him in court? Bodell is the first Alliance participant to face trial in a reinstatement hearing, and there is some concern by his lawyer, Los Angeles’ Susan Margolis, that he might be subjected to greater scrutiny as a warning to any Alliance conspirators following in his footsteps. At least one key figure, Lewis Koss, disbarred after being sentenced to 46 months in prison and fined $100,000, has a reinstatement case already proceeding through the system. “I think [prosecutors] want to make a point,” Margolis says, “that this was such a horrible thing that anyone who had anything to do with it has got to be held accountable for the whole horrible scheme.” State Bar prosecutors deny any plan to use Bodell as a scapegoat. But State Bar Deputy Trial Counsel Kevin Taylor, one of three prosecutors in the case, says “the extent of a petitioner’s misconduct is always a key issue in a reinstatement.” Furthermore, in pretrial statements, he and fellow prosecutors Barry Thorpe and Maridee Edwards make it clear, quoting a California Supreme Court ruling, that Bodell should not be reinstated absent “the most clear and convincing evidence, nay, we will say upon overwhelming proof, of reform — proof which we could with confidence lay before the world in justification of a judgment again installing him in the profession. “Remorse alone,” they wrote, “does not demonstrate rehabilitation.” MAJOR OR MINOR PLAYER? Bodell, now a highly paid law clerk for Los Angeles’ Gradstein, Luskin & Van Dalsem, is concerned but believes he can prove his worth. In the last decade, he notes, he has tried to make up for his crimes by cooperating in the investigation that secured several indictments, making speeches to law students to warn them of the dangers awaiting them in the real world and, generally, keeping his nose clean. “I now know that a lawyer has ethical duties not only to his clients, but also to his adversaries, the court, the judicial system and the public,” he wrote in a State Bar Court statement. “Lawyers who ignore these duties, like I once did, erode our system of justice and the public trust.” The Alliance was notorious, shocking the legal profession when it was exposed in the late ’80s and becoming the focus of a “60 Minutes” segment in 1989. Twelve lawyers and six non-lawyers eventually were convicted and sent to prison. Stites, who was sentenced in 1994 to 12-and-a-half years in prison and ordered to forfeit $50 million in illegal profit, initiated the scam by taking advantage of the 4th District Court of Appeal’s 1984 ruling in San Diego Navy Federal Credit Union v. Cumis Insurance Society Inc., 162 Cal.App.3d 358. That decision gave people the right to choose their own lawyers — subsequently called Cumis counsel — in disputes with their insurers. Stites manipulated the system so that he controlled not only Cumis counsel in many cases, but, at times, opposing lawyers. “Alliance members knowingly represented adverse interests, financed litigation opponents, shared litigation and office expenses, and paid kickbacks to each other and the clients they represented,” the 9th U.S. Circuit Court of Appeals ruled in 1994, while upholding the convictions of four Alliance lawyers. Bodell, who originally faced several counts of mail fraud and racketeering, avoided the worst by cooperating with investigators and even working with insurance company lawyers he had once helped bilk. “He was very scared and didn’t know who to turn to, but eventually he came forward and began to cooperate,” says defense lawyer Margolis, a partner in Margolis & Margolis in Los Angeles. “From that moment on, every aspect of his life has been dedicated to taking those lessons he learned and turning his life around, making sure he will never, ever be involved in anything like this again.” Bodell has lined up an impressive list of about 30 character witnesses — including a State Bar prosecutor he assisted in the Alliance investigations and some of the very insurance company lawyers he fought during his Alliance years. “My support for Mr. Bodell caused at least one insurance company to refuse to do business with my firm,” says David Prestholt, a partner in Los Angeles’ Prestholt & Fidone who faced Bodell in an insurance dispute in the late ’80s. “Nevertheless, I stand by my support. … Mr. Bodell was one of the finest attorneys I have ever gone up against; he beat me ‘fair and square,’ and his honesty and professionalism was unsurpassed.” State Bar prosecutors, who filed papers that officially “oppose” reinstatement, aren’t persuaded. While prepared to agree that Bodell meets one requirement for reinstatement — present learning and ability in the law, based on his passage of the California Bar exam again in 1998 — they aren’t convinced he has met the two other demands, rehabilitation and proper moral fitness. “Even if [Bodell] were able to establish a reputation among his friends for good moral character, his character witnesses’ favorable testimony would not alone establish the required or present moral qualifications for readmission,” they wrote in pretrial papers. Furthermore, they said, the California Supreme Court has held that a lawyer seeking reinstatement must meet an extremely high burden of proof. “Indeed,” they wrote, quoting a 1980 high court ruling, “‘the person seeking reinstatement … is required to adduce stronger proof of his present honesty and integrity than one seeking admission for the first time, whose character has never been in question.’” HEEDING THE INNER VOICE Bodell has fared well in some ways, supporting a wife and three children, 13 years old and younger, on an estimated income of $169,000 in 1998, a salary his lawyer attributes to his insurance expertise. Yet he says he sorely misses being involved in cases as the actual litigator rather than the background researcher. The Pepperdine University School of Law graduate notes that he’s helped his bosses win many cases — including a $47 million verdict last year in a fraud case against the Public Broadcasting System. He says, however, that’s like being on the bench during a championship game. “I’d like to get a little of the glory too,” he says. Not a day goes by, Bodell states, that he doesn’t get sick to his stomach remembering what he did. “I made some bad mistakes and part of what caused my bad mistakes were plain bad mentoring and bad decisions,” he says. “I didn’t listen to that little voice inside me that said, ‘You need to do something, you need to get away.’ It’s far more important to listen to that little voice … that moral compass.” If Bodell wins reinstatement, he’s got a law job waiting at his current firm. Partner Henry Gradstein calls Bodell one of the most knowledgeable and honest people he’s ever known. “If anyone has recognized that his prior conduct was inappropriate and has acted to better themselves and make sure that there would never again be a possibility of making the wrong decision,” he says, “it’s Greg.”

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.