State Bar pays big for bad lawyers

Sam Skolnik

Thursday, April 5, 2007 | 7:11 a.m.

Nevada has seen its share of lawyers gone bad.

Last year, the State Bar of Nevada's Clients' Security Fund paid a record $193,000 to clients defrauded by their attorneys.

In the past three years, there has been an average of two dozen instances a year of attorneys stealing money from clients, state bar records show.

"The American justice system depends on clients being able to trust their attorneys," says Georgia Taylor, the security fund's coordinator .

So the State Bar set up the fund in 1970 to reimburse clients whose lawyers stole settlement checks or other money from them. Although the bar did not have precise numbers, the fund has paid out at least $1 million since its inception.

Taylor, a longtime bar official in Nevada and California, said she has found that gambling, alcohol and drug addictions often are reasons for lawyers embezzling from clients - more so in Nevada than in other states.

But the main motive is age old: avarice.

"In Nevada, greed is a big cause," she said.

There are restrictions on who can contact the fund for relief. The attorney in question has to be no longer practicing law in Nevada; the act has to involve mishandling or embezzlement of funds or property, not malpractice or negligence; and the client cannot make a claim until he or she has made a "reasonable" attempt to recover the funds within a "reasonable" amount of time, according to the bar's Web site.

The fund's rules changed at the beginning of last year. The maximum amount the fund could pay a single client was raised from $15,000 to $50,000.

The main source for the fund is a $25 fee added to the dues of the state's 6,500 active, licensed attorneys. The bar charges $50 annually to out-of-state lawyers licensed in Nevada.

Those changes were made, Taylor says, after the bar ran into trouble in 2005 when the fund was temporarily depleted after paying $103,000 to victims.

Last year's increased payout came just in time for a Pahrump woman who had retained Boulder City attorney Hamilton Moore a few years ago.

Moore was one of nine attorneys whose clients were reimbursed by the fund in 2006, Taylor said. Eighteen clients of those attorneys were reimbursed for 38 instances of theft.

Eighty-two percent of the money distributed by the fund last year were the result of Moore's thievery. He was disbarred in November.

The Pahrump woman was one of eight former clients Moore admitted defrauding. The woman, in her 60s, spoke on the condition that her name not be used.

After suffering from partial blindness in her left eye, she was misdiagnosed . By the time a second doctor correctly diagnosed her detached retina, her condition had worsened.

The woman decided to sue her original doctor. She was referred to Moore, whom she described as initially a "very relaxed, jovial, lighthearted person. And he seemed competent."

After she took steps toward a settlement, Moore became reluctant to update her about the case. In November 2005, she discovered through a worker in Moore's office that her case had been closed. The victim realized a settlement had been reached a few months before even though she had heard nothing about it.

It took several months, the woman said, for Moore to admit that a check for $115,000 had been sent and that he had cashed it.

"The worst part is that he lied, he just lied," she said. "To be truthful, I had been living my life as though I already had that money. He put me in a world of hurt."

Moore declined to comment for this story.

Moore, a former Nye County prosecutor, had been a personal injury and medical malpractice lawyer in Las Vegas and Boulder City for decades.

He was well regarded and respected for his abilities as a litigator, said his Las Vegas attorney, John Lusk .

Moore realizes there is "absolutely no legal excuse for what he did in not using his clients' funds appropriately," Lusk said. "He is extremely sorry and remorseful about causing his clients harm."

Moore intends to repay the clients and the bar security fund, Lusk said.

He said Moore's practice had become economically stressed by taking on too many cases that took too long to reach settlement. As he took on more clients, he spent the settlements from previous cases to keep his business afloat as he waited for checks to come in.