Thousands Of Distressed Homeowners Left Hanging After Attorney Abruptly Chucks Law License; Calif. State Bar Urges Victims To File Restitution Claims

In San Francisco, California, KGO-TV Channel 7 reports:

• Thousands of distressed homeowners are looking for a way to get their money back after hiring a lawyer to save their homes. The families were left in a lurch when the lawyer suddenly resigned from the State Bar. But even before his resignation, investigators were raising questions about whether the attorney was doing more harm than good.

• James Parsa advertised heavily on both television and radio up and down the state. [...] The California State Bar told 7 On Your Side Parsa was one of 300 lawyers under investigation. "Mr. Parsa was being investigated for his loan modification activities by the State Bar based on complaints we have received from clients. And as part of our investigation we learned that Mr. Parsa had a criminal conviction in 2001," said Suzan Anderson from the California State Bar. Prosecutors convicted him of two counts of unlawful intercourse with a minor in Orange County. "The courts are supposed to report any criminal conviction to the State Bar and the attorney is supposed to report the conviction. Apparently it slipped through the system," said Anderson.

• When the Bar learned of his conviction, it put him on interim suspension and Parsa resigned one week later. Now the State Bar is encouraging Parsa's 4,500 clients to apply for its restitution fund. "We can reimburse for an attorney actually stealing personal injury settlement funds or even taking advance fees for performing no work or any significant amount of work," said Matthew Zawol from the California State Bar. Last year, the Bar received 1,000 requests for restitution. This year that number has already topped 2,000. Many clients claim the lawyers leave them in worse shape than before they came to them.

For the story, see Attorney leaves clients facing foreclosure stranded.

(1) As suggested by the official from the State Bar of California, victims of ripoffs by California attorneys can put in a claim for restitution with the Bar's Client Security Fund which, according to their website (as of 12/16/2009), can reimburse qualified victims up to $50,000 for theft committed by a California lawyer. It covers the loss of money or property resulting from lawyer dishonesty (but not because the lawyer acted incompetently, committed malpractice or failed to take certain actions), according to The State Bar website. (Presumably, should the Client Security Fund begin to run out of cash to pay these restitution claims, The State Bar will keep the Fund replenished by making its remaining members cough up higher fees when their law licenses come up for renewal, thereby sticking them with the bill for the sins of their wayward colleagues - and in some cases, their now-disbarred, ex-colleagues).

For those ripped off by dishonest attorneys in other states and Canada, see:

• United States: Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• United States: Check the USA Client Protection Funds Map;
• Canada: Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc. loan modification upfront fees