A Bibb County judge has decided he will not disqualify an Atlanta attorney accused of using his position as a special prosecutor to force businesses to forfeit hundreds of thousands of dollars in assets from which he then allegedly drew his fees.
In a Nov. 15 order, Superior Court Judge David Mincey III of the Macon Judicial Circuit described Atlanta lawyer Michael Lambros’ law firm escrow account—through which multiple civil settlements Lambros has made on behalf of the circuit’s district attorney have been channeled—as so sloppy that it provided Lambros’ challengers with “a reasonable argument” that Lambros had violated state law by taking a contingency fee as a percentage of forfeited assets.
In his order, the judge also acknowledged there was “no dispute” that defendants’ settlement payments to resolve civil forfeiture suits Lambros filed on the DA’s behalf flowed into Lambros’ law firm and that the lawyer then paid himself from those settlement funds. But, the judge held, “There are simply two versions of the story—one describing the payments as contingent and one not.”
Mincey, a Crawford County lawyer whom Gov. Nathan Deal appointed to the bench last February, also compared Lambros’ payments from forfeited assets associated with the civil racketeering claims to real estate closing legal fees. “Fees are paid when the proceeds are available,” he said. “Those fees are not contingent fees but rather fees paid when money is received.”
“The court cannot agree that the moving parties’ interpretation of the facts as a contingent fee agreement is more likely than the non-moving party’s position that the bill is paid as funds are available,” the judge concluded.
Former Georgia Attorney General Mike Bowers and Balch & Bingham partner Christopher Anulewicz had sought to disqualify Lambros in a pending civil racketeering case against Rana Mujudiddi and Faith Business Inc. Mujudiddi is the owner of a DeKalb County convenience store. The case is one of more than 150 related cases Lambros has brought on the Macon DA’s behalf against a statewide convenience store chain involving the operation of coin-operated game machines where winners allegedly received cash prizes, a misdemeanor offense under state gambling laws.
Bowers and Anulewicz have also sued David Cooke and Lambros in an unrelated case over similar charges they filed against an elderly Peach County couple who owned a restaurant that housed several of the coin-operated games.
Cooke has labeled the installation and operation of the game machines—many, if not all of which, are legal under state law as long as there are no cash prizes paid—as “an illegal gambling enterprise.”
Anulewicz and Bowers contend that Lambros uses his special prosecutorial authority and the threat of prosecution to orchestrate the surrender of defendants’ assets and that a court-ordered review of his escrow account records shows that Lambros paid his fees and costs from forfeiture settlements only after they were deposited in his firm escrow account. That, they argued, constituted an illegal contingency fee.
Collecting contingency fees in asset forfeiture cases based on the total assets forfeited is barred by state statute, the State Bar of Georgia’s professional conduct rules and rulings of the state Court of Appeals and state Supreme Court. At least one ruling stemmed from Lambros’ own prior practice of taking contingency fees from forfeiture settlements whenever he hired himself out as a special assistant DA to district attorneys across the state.
In 2012, the state Court of Appeals said that a district attorney may not be compensated via a fee arrangement “which guarantees at least the appearance of a conflict of interest between his public duty to seek justice and his private right to obtain compensation for his services,” calling such arrangements, particularly in civil racketeering forfeiture actions, “repugnant.”
Lambros, who defended himself against disqualification at a Nov. 8 hearing in front of Mincey, insisted repeatedly that as a special ADA for Cooke he earned—and was paid—$350 an hour plus expenses regardless of whether he secured seized funds in settlement agreements. But he acknowledged he had only submitted three invoices to Cooke over 23 months from October 2015 to August 2017.
The DA paid the first $137,688.80 bill—submitted Oct. 28, 2015, for “presuit work”—on Nov. 19, 2015. Lambros submitted a second bill for $160,963.37 in March 2016. On Aug. 7, 2017—after Bowers and Anulewicz filed their motion to disqualify—Lambros submitted a third invoice for $796,987.37 that included the still-unpaid March 2016 bill.
Yet, for more than a year before he submitted his third bill to the district attorney, Lambros withdrew a total of $710,000 from his private escrow account, where the civil settlements for the DA’s cases are sent, according to his escrow records, which he submitted to Mincey and were discussed in depth at the Nov. 8 hearing. Those withdrawals all were made within days of forfeiture deposits to Lambros’ firm escrow accounts.
Questioned by Mincey about the withdrawals, Lambros said that from time to time he would get verbal approval from Cooke to pay himself even though he had not submitted an invoice. But he insisted, “It’s not a contingency. … I’m getting paid on an hourly basis. It’s not contingent on anything.”
Lambros was retained by the district attorney in 2014 but told the court he has worked for three years without a contract and without any written agreement as to how he would be paid.
The day after the disqualification hearing, Cooke submitted an affidavit to the court saying Lambros’ fees are “not presently contingent upon the successful prosecution or the successful outcome of any case.”
“There have been multiple cases where we have paid Mr. Lambros for work when there has been no money recovered,” Cooke added.
But when the Daily Report asked about Lambros’ assertions to Mincey that Cooke had privately and informally agreed to allow him to pay himself for more than a year without submitting an invoice, Cooke responded, through a spokeswoman, “Because this directly relates to a matter pending before the court, it’s not appropriate for me to comment.”
In his affidavit, Cooke said that to eliminate any further confusion, he has instructed Lambros to submit monthly invoices for his fees and services beginning Nov. 8.