Press Release

Morrison & Foerster Brings Suit against Phony "Legal Aid" Operation Preying on California Seniors and the Disabled in Distress

10/19/2007

SAN FRANCISCO (October 19, 2007) – Attacking an alleged confidence scheme that has thus far escaped the attention of prosecutors and state law enforcement, law firm Morrison & Foerster LLP has brought suit in California Superior Court against an entity purporting to offer low-cost legal services but which, in fact, appears to be preying on poor and often elderly Californians facing legal crises.

The complaint, filed in Contra Costa County, seeks to shut down an operation known as “Legal Center for Legal Aid,” operated by Richard Gugg, who is believed to live in the Los Angeles area. The suit seeks to unmask other “John Doe” defendants, based on the fact that plaintiffs who called “Legal Center for Legal Aid” spoke with different people, some of whom are thought to have used aliases.

In addition to four individuals, who accuse Mr. Gugg and unnamed accomplices of defrauding them, plaintiffs include two established San Francisco-area legal clinics, Bay Area Legal Aid and Legal Services of Northern California.

“Legal Center for Legal Aid,” which advertises in a number of California Yellow Pages directories and provides a toll-free number, is accused of unlawful practice of law without a license and accepting payment for legal services that it never delivered. Plaintiffs allege that Mr. Gugg violated a number of state statutes in operating a phony legal business that targeted the elderly and infirm. The “Center for Legal Aid” is believed to have been in operation for a number of months, throughout California.

All of the individual plaintiffs were facing eviction or other landlord-tenant problems, and sought free or low-cost legal assistance, explained Morrison & Foerster litigation partner Angela L. Padilla, one of several attorneys at the firm handling the case on a pro bono basis. Ms. Padilla noted that the Yellow Pages entry for “Legal Center for Legal Aid” was placed alongside and sometimes directly above and below those of legitimate legal aid services, enhancing its apparent credibility and deceiving those who were hurried or confused in their need for legal help.

The four named plaintiffs are all in varying degrees of physical and financial hardship; none could afford the fee that “Legal Center for Legal Aid” extracted from them. Albert Leonard of Contra Costa County, 72 and totally blind, paid $425 for help in fighting an eviction notice. Stuart Blankinship, a seriously ill double-amputee who lives in Corning, Calif., and who was also facing eviction, was instructed to send a $300 check payable to “Richard Gugg.” Neither Messrs. Leonard nor Blankinship, nor any other plaintiff, received any useful legal advice or assistance in return.

“I was being evicted and didn't have much time to respond,” Mr. Leonard recalled. “I called information and asked them for the number for legal aid. I was so desperate because I knew I only had a couple days. I followed the instructions I got to deposit money into a Bank of America account. I was faxed some papers. I am completely blind, and relied on them to send me the proper papers. The clerk at the court told me the forms weren't filled out right. I realized I'd been had and found the real Legal Aid, which was able to help me. I never got my money back.”

“This ‘Legal Center’ outfit, which held itself out as a bona fide provider of legal services, is nothing more than a scam to fleece vulnerable people of limited means with legal problems,” Ms. Padilla said. “The victims handed over what for them represented significant sums of money to a fraudster who absconded with it. Unfortunately, it is our belief that similar confidence schemes are operating elsewhere in California. Our goal is to bring this flim-flam to the attention of law enforcement and help eliminate it.”

The complaint lists 11 causes of action against “Legal Center for Legal Aid,” including false advertising; breach of fiduciary duty; fraud; acts against senior citizens or disabled persons; and financial abuse of elder or dependent adults. One of the plaintiffs has been evicted from his home since seeking help from “Legal Center for Legal Aid” and is now living with another family member.

“While there have been notices in small-town Northern California papers about the ‘Legal Center for Legal Aid’ scam, and warnings posted in senior centers, the swindlers have thus far managed to fly this fraud largely under the radar,” Ms. Padilla added.

In addition to Ms. Padilla, Morrison & Foerster associates Geoffrey Graber and Evi Schueller are also working on the case.

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