TWO MORE LOAN FORECLOSURE LAWYERS PLACED ON INVOLUNTARY INACTIVE ENROLLMENT

MEDIA CONTACT:  Diane Curtis   415-538-2028    diane.curtis@calbar.ca.gov

San Francisco, June 02, 2010 — Continuing its effort to protect the public from lawyers who take advantage of distressed homeowners, the State Bar prosecutor’s office has secured orders of involuntary inactive enrollment for Southern California attorneys Eric Douglas Johnson and Mark Alan Shoemaker.

Besides the two involuntary inactive enrollments, the State Bar’s Office of Chief Trial Counsel has obtained the resignations of 13 attorneys involved in loan modification misconduct since creation of the Loan Modification Task Force in April 2009.  Five loan modification trials are pending. Another 2,000 active investigations related to loan modification are being conducted.

In separate May actions, State Bar Court Judge Richard Honn ruled that the conduct of  Johnson (State Bar #224065), 55, of Los Angeles, and Shoemaker (State Bar #134828), 49, of Long Beach, pose a “substantial threat of harm” to their clients or the public, and both were ordered involuntarily enrolled as inactive members of the State Bar under Business and Professions Code 6007.

Johnson associated with several non-attorney legal organizations, lending his name and status as an attorney to a firm offering bankruptcy filing and assistance, a business handling forensic audits and loan modifications and two other loan modification companies. Honn cited cases in which homeowners were promised that their homes would not be foreclosed but the homeowners lost them anyway after having made significant payments to the non-attorney companies.

Johnson “lacked control and failed to supervise” any of the organizations with which he was associated, Honn wrote in his May 18 order. “This lack of control and failure to supervise consequently led to, among other things, the unauthorized practice of law, misrepresentations and client harm.”

Shoemaker, whose case was investigated and prosecuted with the invaluable help of the California Department of Real Estate, has owned and operated a loan modification business called Advocate for Fair Lending since 2008. Shoemaker “used Advocate and his status as an attorney to convince cash-strapped homeowners to pay him thousands of dollars in hopes of saving their homes from foreclosure,” Honn wrote in his May 28 order. Shoemaker, however, “often did little to nothing to help these clients. In fact, many of these homeowners were worse off after retaining [Shoemaker’s] services.”

The order referred to 18 examples in which Advocate clients, who signed power of attorney when they contracted with Advocate, were not helped and asked for refunds. A few did get refunds; many others did not. Some clients reported that their lenders said they had never been contacted by Advocate on their behalf. Shoemaker argued that he was merely the president of Advocate and did not represent any Advocate clients in a legal capacity.

“Advocate’s clients were also [Shoemaker’s] clients,” Honn wrote. “An attorney cannot use a power of attorney form to absolve themselves of the ethical mandates they have sworn to uphold.”

Founded in 1927 by the legislature, the State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By June 2010, membership reached 227,000.