Holland & Knight sued by court-appointed receiver pays $2M to avoid trial.

In 1 on January 12, 2009 at 2:12 am
On May 23, 2002, The National Law Journal ran a story (click here to read it) about the $500 million fraud by a Portland, Oregon, pension advisory firm, Capital Consultants LLC, upon mostly Oregon and Washington pension and health care benefit trusts.  The court-appointed receiver sued five law firms that did legal work for Capital and its co-conspirators, saying, "They aided and abetted the perpetration of a fraud on the pensioners." The law firms paid $50 million to avoid trial and possibly much greater liability. Here are several links to more information about that case: Link#1Link#2Link#3Link#4Link#5.   Weiss Jensen Ellis & Howard law firm (merged into Holland & Knight), of Portland, paying $2 million to avoid trial.  Full story By Doug Schafer here:


Lawyers can make staggering sums by keeping clients' dirty secrets. In the 1983 $200 million fraud case of O.P.M. Leasing Services (O.P.M. stands for Other People's Money), when the criminals' lawyers discovered that their largest client was forging and selling bogus mainframe computer system leases, the lawyers kept quiet while collecting their $700,000 bill, which the client paid by continuing the fraud for eight more months, bilking victims of $85 million more and even hiring an unsuspecting law firm after the first one quietly resigned!  To learn about the O.P.M Leasing case, read the journal articles by New York University Law Professor Harry Subin and by the late former Oregon State Bar president Dick Nahstoll — click here for those articles.
Most nationally prominent legal ethics professors recognize that major frauds nearly always are actively furthered by, or enabled by the silent acquiescence of, the wrongdoers' lawyers.  Boston University Law Professor Susan B. Koniak recently condemned lawyers who enable Enron and similar scandals in Forbes Magazine (Aug. 12, 2002, page 58, click here to see it), saying:
"The dirty secret of the mess is that without lawyers few scandals would exist, and fewer still would last long enough to cause any real harm.  Lawyers need to be regulated.  No other legal reform enacted will do any good as long as there are no consequences to lawyers who bless anything a manager wants to do. … Because lawyers are necessary to commit almost any fraud of more than a moment's duration, their firms' survival should be on the line. … The lawyer problem is systemic: no "few bad apples" here. … This is a disgrace."
Interesting how Holland & Knight recently announced they had formed a Madoff Advisory Group to help clients with strategies related to any losses resulting from involvement with entities controlled by Bernard Madoff.  They fail to disclose a court-appointed receiver previously sued them for aiding and abetting the perpetration of a $500 million fraud by a Portland, Oregon, pension advisory firm, Capital Consultants LLC,.  

Posted via email from HKLaw Investigation


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