Thursday, January 19, 2006

Florida Attorney General Charlie Crist Fails to Investigate The Law Offices of Eddie Farah's Documented Overcharging Practices

TALLAHASSEE, FLA---Florida Attorney General Charlie Crist announced Dec. 6, 2005 that his office sued two Palm Beach County men for unfair and deceptive trade practices stemming from allegations that their cabinet and countertop business took customers' deposits but failed to provide the requested items.

Crist's complaint alleges the two men never delivered promised services. Affidavits from consumers reportedly reflect that victims were cheated out of more than $175,000 in deposits. Crist’s office maintains the two Palm Beach County men are being sued under Florida's Deceptive and Unfair Trade Practices Act, which allows a penalty of $10,000 per violation, or $15,000 if the victim is a senior citizen or disabled adult.

In sharp contrast, Crist’s office refused to even investigate reports of a well connected law firm's widescale misappropriation of its clients' funds. I was employed as an attorney with FARAH, FARAH & ABBOTT, P.A. (a/k/a The Law Offices of Eddie Farah) in 2004 when I discovered the firm was frequently 'padding' costs charged to personal injury clients by $300 or more per case and had been doing so for several years. It overcharged hundreds of unsuspecting clients and the combined misappropriated funds are estimated at several hundred thousand dollars.

According to the firm's web site, it is now known as the Law Offices of Farah & Farah, P.A. The principals in the firm are Eddie Farah and his brother, Charlie E. Farah.

The law firm practiced as a professional association ("P.A."), an authorized business entity under The Rules Regulating The Florida Bar. Florida Bar Rule 4-8.6(a) specifically provides, "Authorized Business Entities. Lawyers may practice law in the form of professional service corporations, professional limited liability companies, sole proprietorships, general partnerships, or limited liability partnerships organized or qualified under applicable law. Such forms of practice are authorized business entities under these rules."

There are many reasons attorneys choose to form professional associations for their legal practices. The owners of a professional association are called shareholders and ordinarily do not have personal liability for liabilities that arise in the ordinary course of business or from the malpractice of other attorneys at the law firm. This is one of the major benefits of operating a law practice as a professional association.

My Jan. 10, 2005 letter to Crist’s office reported the law firm’s repeated acts of consumer theft/fraud in the years 2002 through 2004 and emphasized, “Given the frequency and duration of [the firm’s] overcharging practice, many clients and considerable sums of money are involved in these matters." Crist’s office responded by
letter dated Jan. 24, 2005
, simply identifying The Florida Bar as the agency responsible for reviewing grievances against Florida lawyers.

I know of no legal authority exempting law firms operating as professional associations from being prosecuted under Florida's Deceptive and Unfair Trade Practices Act. My concerns over the firm's illicit overcharging practices had already been reported to The Florida Bar in Sept. 2004 by
letter to Donald M. Spangler, Esq., Chief Branch Discipline Counsel.
Surprisingly, a full year went by with no contact from any representatives of The Florida Bar to investigate the reported widescale fraud and misappropriation of clients' funds by The Law Offices of Eddie Farah. Not a single inquiry from The Florida Bar by letter, email or telephone.

When I followed up with The Florida Bar in late 2005 concerning the firm’s overcharging practices, I received a succinct
Oct. 27, 2005 email from Spangler
stating, "The file to which you refer was closed. The grievance committee considered the matter after investigation and an audit by the Bar Staff Auditor, and found there was no probable cause to pursue disciplinary proceedings. They did elect to send a letter of advice to the firm."

The fact The Law Offices of Eddie Farah overcharged clients by substantial sums is not in dispute. Attorney John A. Weiss, Esq. of Tallahassee represented the firm's principals, attorneys and brothers Eddie and Chuck Farah, before the Bar.
Weiss admitted in a Sept. 22, 2005 letter to The Bar that the firm overcharged clients

"As an aside, I would advise you that the firm has refunded in excess of $120,000.00 ... to those clients who were inadvertently overcharged for costs. Approximately $10,000.00 remains undisbursed because the firm, and the private investigator it subsequently hired, could not find the individuals."

Even The Florida Bar's own audit of the firm's trust account confirmed $130,000 in overcharges and a lack of substantial compliance with Bar rules governing trust acounts in the years 2002 through 2004.

According to a Jan. 6, 2006 letter Spangler, "The Florida Bar cannot impose disciplinary action against a law firm, only against individual lawyers."

This is just one case pointing out the dangerous loophole unscrupulous legal practitioners exploit to the public’s detriment. If law firms aren't subject to disciplinary action by The Florida Bar, why won't Attorney General Crist investigate the professional assocation's admitted overcharging practices under Florida's Deceptive and Unfair Trade Practices Act?

Someone must take responsibility for protecting clients defrauded by law firms and the public needs to know who that is.

Copyright © 2006 by Jeffrey R. Hill. All rights reserved.

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