GREENBRAE ATTORNEY IN MORTGAGE FRAUD SCHEME RECOMMENDED FOR DISBARMENT
San Francisco, Nov. 9, 2012 – A State Bar Court hearing judge is recommending disbarment for a Greenbrae attorney involved in a sophisticated scheme to defraud distressed homeowners by promising that a bogus predatory lending lawsuit was the solution to their foreclosure issues.
Sharon L. Lapin [bar #165919], 57, of Greenbrae was found culpable of multiple counts of professional misconduct, including moral turpitude, aiding the unauthorized practice of law, sharing fees with a non-lawyer, participating in a non-legal lawyer referral service, failure to perform legal services with competence, failure to maintain only legal or just actions and failure to avoid representing adverse interests.
Lapin worked as a contract attorney for an organization that operated under various names, including US Loan Auditors LLC, US Loan Auditors Inc., My US Legal Services and US Legal Services. She received $177,000 through the scheme from August 2009 through November 2010 without having to provide any legal services, the decision said.
“She has no remorse and does not accept responsibility for her actions,” Judge Lucy Armendariz wrote in the Nov. 7 decision, which resulted from an 11-day trial this summer. “She continued to make excuses and rationalized her fraud. When asked if there was any value that clients received, respondent testified that they were able to stay in their homes that much longer. She insisted, despite overwhelming evidence to the contrary, that she was entitled to the monies as reimbursement for costs. Yet she could not explain how costs could exceed $34,000 per month. She kept no time records of her alleged hourly services to justify her $350 hourly fee.”
Under the scheme, homeowners would pay thousands of dollars for so-called forensic loan audits, which the companies used to convince them they had a strong legal case against lenders. Many homeowners were persuaded to stop making their loan payments and instead to file lawsuits. As a result, they lost thousands of dollars and, in some cases, their homes.
Another attorney implicated in the scheme, James Donald Sandison [#148812], 57, of Elk Grove, agreed to disbarment last year for unrelated misconduct, including misappropriation totaling more than $124,000.
Senior Trial Counsel Robin Brune argued in her closing brief to the court that Lapin’s defense came straight out of the “Mission Impossible” movies, where the secret agent receives key information from a tape recording that self-destructs to protect the mission.
“The respondent is trying to use the secret agent defense – she is claiming that she knew nothing about the fraud, and she is distancing herself as much as possible from Sandison’s deceptive practices,” Brune wrote. “But a lawyer is not a secret agent. She is bound by ethical duties of absolute transparency and fiduciary duty; her duty of competence and communication. The attorney can’t be oblivious to the mission. Respondent’s need-to-know basis extends to the scope of all matters related to the representation of her clients.”
Lapin was previously disciplined in 2006 for misconduct in three client matters, which included failure to perform services competently, failure to communicate, failure to refund unearned fees, improper withdrawal from employment, failure to return a client file and failure to cooperate with the State Bar.
Armendariz ordered Lapin’s license inactive as of Nov. 10 pending disbarment, which becomes effective upon California Supreme Court approval.
Founded in 1927 by the state 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 November 2012, membership reached 238,000.