The Monitor, McAllen
June 27, 2010
Divorce unmasks case chasing
June 27, 2010 10:31 PM
By JEREMY ROEBUCK, The Monitor
McALLEN — Before arriving in the Rio Grande Valley in 2006, Houston lawyer Newton Schwartz knew Wilfrido "Willie" Garcia only by reputation.
And in the South Texas legal community, the man was a legend.
A wheeler-dealer of the first rate, the 47-year-old former emergency medical technician had amassed a $30 million fortune in just under two decades. His 8,500-square-foot home in Mission featured a private gym, a movie theater and a fine art collection that included works by Salvador Dali and Pablo Picasso. And he helmed a business that brought in $1.5 million a month from its involvement in the world’s most lucrative personal injury cases.
Despite never having obtained a law degree, Garcia had amassed the type of wealth only dreamed of by most young lawyers.
At the time, he was seeking $4 million to expand his firm — a Mexico-based venture that specialized in locating victims of tragic accidents and referring them to civil attorneys. And Schwartz was looking to invest.
"Willie never pretended to be a lawyer," he recalled. "But he wanted to impress us with all that he had."
The deal the two men discussed over dinner that night never came to fruition. But four years later, Schwartz looks back on that meeting as a last glimpse of a crumbling empire.
In 2005, Garcia’s wife filed for divorce, setting off what started as a bitter battle between feuding spouses and has since morphed into a statewide debate on the failings of the South Texas legal system.
It has attracted unusual attention from dozens of lawyers as far away as California , Florida and New York and from state lawmakers and court reformers who say Garcia and other "case runners" like him have amassed fortunes profiting off the misfortunes of others — all in violation of state law.
Now, what started as a simple familial dispute could inspire one of the most significant reforms to state barratry laws since the act became a felony offense.
"There’s a lot of money changing hands, but this crime is a lot safer than running drugs," said Bill Edwards, a Corpus Christi attorney who has become one of the state’s most vocal advocates for tougher enforcement. "You don’t get shot. You don’t get put in jail. You don’t even get your hand slapped."
Garcia could not be reached for comment for this story. And while his attorney Ricardo Salinas initially agreed to an interview, he did not return multiple phone calls over a period of days afterward.
In that early conversation, however, the lawyer disputed his client’s reputation as one of the state’s top case runners.
"He doesn’t run anything," Salinas said. "It’s a misconception, and this divorce has really run him into the ground."
Garcia may have good reason to distance himself from the profession as it is described in court filings — chief among them, it’s illegal.
Texas law prohibits anyone from soliciting clients for lawyers — a third-degree felony known as barratry, punishable by up to 10 years in prison. State bar regulations also prohibit attorneys from sharing their case fees with those who do not hold law degrees.
But across South Texas, the majority of high-dollar personal injury cases live and die by the network of first responders, funeral home employees, police officers, bail bondsmen and others with easy access to victims of car wrecks, industrial accidents and violent crimes and the attorneys who can take their claims to court, several Valley plaintiff’s lawyers said.
While most claimed not to use them themselves and were hesitant to talk openly about this unseemly side to their profession — all agreed case runners have come to dominate the system
"Case running goes on everywhere, but down here it seems to be more prevalent," said Brownsville attorney Carlos Cisneros, whose 2008 book The Case Runner featured a fictionalized title character that many assumed was based on Garcia — a conclusion Cisneros says isn’t the case.
Garcia’s purported involvement with case running began with one of the biggest personal injury free-for-alls the Valley has ever seen.
When an Alton school bus plunged off Five Mile Line Road into a flooded caliche pit in 1989 and killed 21 students, it didn’t take long for the lawsuits to start flying.
Attorneys and their proxies descended on the small town, attending memorial services, rallies and local gathering spots, all in hopes of drumming up business.
Garcia, an EMT at the time, picked up the bodies of several of the victims and referred their families to law firms in exchange for a fee, said Hidalgo County Sheriff Lupe Treviño, who was then working as an investigator in the district attorney’s office.
But Garcia wasn’t the only one. For Dora Rodriguez, who lost her daughter Anna Delia in the crash, the persistent calls to sign up with an attorney soon became overwhelming. Within days, she had amassed a 3-inch stack of business cards from those looking to help her file a lawsuit.
"They didn’t even know who had lost kids or who were the kids in the crash," she said. "They were just going door-to-door so they wouldn’t miss anyone."
The Hidalgo County District Attorney’s Office opened 15 cases into allegations of barratry and eventually filed criminal charges against five people. Garcia narrowly avoided joining them by agreeing to cooperate with the investigation, Treviño said.
But that narrow brush with the law didn’t deter him, according to court filings. In fact, it did the opposite.
Soon after the crash, Garcia founded a company in Mexico — Servicios Legales de Mesoamerica — that is at the root of much of the current squabbling.
The now-defunct venture specialized in "providing assistance to victims of personal injuries by referring them to personal injury lawyers and law firms from all over the United States," according to filings by Garcia’s attorneys.
Technically, such a business model could be legal if the clients approached SLM looking for legal representation — rather than the other way around.
But the divorce filings suggest that within years Garcia was purportedly linking South Texas attorneys with potential plaintiffs in almost every state and as far away as Australia , Greece , Indonesia and Venezuela for a cut of the eventual settlement money.
A 2006 plane crash in Irkutsk, Russia, that left 124 dead and more than 60 injured netted SLM more than 67 cases.
The idea that victims of that wrecked SiberAir flight between Moscow and Irkutsk contacted either Garcia’s offices continents away in Mexico or in McAllen looking for legal representation strains credulity, said Edwards, the advocate for tougher enforcement of anti-barratry laws.
"It doesn’t make any sense," he said. "(Garcia) was running major cases."
Despite its success, SLM operated for years without drawing much scrutiny outside of legal gossip. That is, until the Garcias’ divorce.
Claiming he had been an unfaithful and abusive husband, Maria de Jesus Garcia in 2005 asked a state district court in Hidalgo County to award her child support and alimony from her husband’s estimated $33 million net worth.
But the divvying up of the couple’s marital property has attracted a slew of creditors claiming Garcia and his company cheated them out of money. Like ambulance-chasing attorneys flocking to an accident scene, nearly a dozen parties have intervened seeking a cut of the estate.
They range from the U.S. Internal Revenue Service, which claims the couple owes them three years of back taxes, to a woman in Mexico who says Garcia fathered her child.
The Law Funder, a New York City-based legal loan company, claims it advanced Garcia, who represented himself as an attorney, nearly $4 million to secure a percentage of damages in a slew of personal injury cases.
A New York law firm has intervened saying it floated SLM $2 million in anticipation of case winnings, and a firm in California maintains it gave Garcia another $4 million. Both say he spent the money on himself.
Schwartz, the Houston attorney who visited with the alleged case runner in 2006, says Garcia stiffed him out of $700,000 he invested in another set of cases stemming from the SiberAir crash.
Garcia maintains that he has never claimed to be a lawyer and that he is not personally liable for any of the debts.
With more and more parties joining the case, its file has grown so large that staff in Judge Jesse Contreras’ 449th state District Court must now wheel the filings around on a cart and now refer to it simply as "the file."
But perhaps more significant than Garcia’s mounting financial problems, the divorce has caught the unusual attention of state lawmakers, who are set to consider legislation to strengthen state barratry laws during the next legislative session.
During a hearing by the Texas House Judiciary and Civil Jurisprudence Committee last month, Edwards cited the case as one of the most flagrant examples of case running he had ever seen.
Lawmakers seemed puzzled as to how a man with a reputation such as Garcia’s could continue to operate almost within plain view of authorities.
"But isn’t that illegal?" state Rep. Will Hartnett, R-Dallas, asked.
"It’s illegal as the devil," Edwards responded. "But try to get a conviction. Try to get a district attorney to take the case, and everyone clams up."
Maria de Jesus Garcia came to Hidalgo County District Attorney Rene Guerra before filing her divorce case in 2005, hoping to start an investigation into her husband’s work, the prosecutor said.
"But they were just allegations," he said. "I told her, ‘When you bring me the proof, then we’ll start an investigation.’ They never came back."
And that’s the problem with most barratry cases. Plaintiffs who were solicited rarely come forward, because if their lawyer is successful, the process ends in a significant payday.
"Other than that, it’s always going to be a problem of corroborating witnesses," said Guerra. "Otherwise it becomes a lot of he said, she said."
Reform advocates like Edwards also maintain the state’s current structure for prosecuting barratry makes it nearly impossible to get a case off the ground.
Too often for overworked prosecutors, such a "victimless" white-collar crime takes a lower priority than more violent offenses like murder, rape or child molestation.
Investigating them also falls to the jurisdiction of local district attorneys, who in many cases have strong political or professional ties to the lawyers they would be targeting.
"It’s very difficult to stand up when it’s one of your peers or political supporters doing it," Edwards said.
The Texas Attorney General’s Office can step in to investigate barratry cases but only upon a request from the local DA.
Recently, two rival lobbying groups — Texans for Lawsuit Reform and the Texas Trial Lawyers Association — have pressured lawmakers to expand penalties for those running cases.
In addition to criminal penalties, violators could be forced to pay back the fees they collected on illegally secured cases, under one proposed suggestion.
Both groups agree cases like Garcia’s demonstrate the need for more effective enforcement options. They just differ on the details.
"I think the one thing that’s clear is that we all want to kill the rats," said Mark Kincaid, legislative director for the trial lawyers group. "We just don’t want to burn the house down to get to them."
Monday, June 28, 2010
Thursday, June 24, 2010
Tuesday, June 15, 2010
Friday, June 11, 2010
Wednesday, June 9, 2010
Local Attorney Fights Barratry
Say "NO" to personal injury attorneys' unethical behavior NOW by making a donation at www.bacala.net.
Here's why:
According to a news release by the Texas Attorney General's Office, a Corpus Christi attorney and case runner from the Garza Law Firm solicited their legal services at 1:00 a.m., uninvited at the home of a family who's relative had been killed in a car accident earlier that night. This is a perfect example of the on-going problem known as barratry.
According to a news release by the Texas Attorney General's Office, a Corpus Christi attorney and case runner from the Garza Law Firm solicited their legal services at 1:00 a.m., uninvited at the home of a family who's relative had been killed in a car accident earlier that night. This is a perfect example of the on-going problem known as barratry.
On Tuesday, May 25, a Jim Wells County grand jury indicted the defendants with one charge of barratry and one charge of solicitation of professional employment.
BACALA has made tremendous progress in lawsuit reform; unfortunately, many cases of barratry continue to go unnoticed.
Based on his testimony at Chairman Todd Hunter's Interim Hearing of the Judiciary and Civil Jurisprudence Committee on Wednesday, May 26, well-known personal injury attorney Bill Edwards of the Edwards Law Firm strongly agrees that this type of activity is corrupting our society.
"I fought to make barratry a felony. Anyone involved in barratry will be held accountable," said Edwards.
Tune in to hear Edwards speak about the damaging effects of barratry on "Lago in the Morning" on 1360 KKTX at 7:30 a.m. this Thursday, June 10.
Barratry and solicitation of professional employment is a third-degree felony punishable by up to a $10,000 fine and two to 10 years in prison.
Tuesday, June 8, 2010
Monday, June 7, 2010
"...the disaster will keep the lawyers busy and make many of them filthy rich from the filthy mess coating portions of the Gulf."
The Southeast Texas Record's story on the Texas plaintiff lawyers seeking damages after the oil spill in the gulf.
http://www.setexasrecord.com/arguments/227336-in-search-of-the-billion-dollar-disaster-bonanza
http://www.setexasrecord.com/arguments/227336-in-search-of-the-billion-dollar-disaster-bonanza
Wednesday, June 2, 2010
Lawyers illegally using "runners" in Corpus Christi
KRIS-TV, Corpus Christi
May 29, 2010
Corpus Chrisit Attorney indicted for barratry
CALACTX at May 29th 2010 8:37 AM
Efforts to bolster laws against illegal lawsuit solicitation were quietly defeated during the 2009 legislative session. Initially, House Bill 148 would have allowed clients to collect triple damages from lawyers who engage in illegal case solicitation. The proposal would have penalized lawyers who use ?runners? to covertly solicit cases or to otherwise exploit the vulnerability of hospitalized accident victims and their families. Unfortunately, these provisions were stripped from the bill.On Wednesday, May 26th, the Judiciary and Civil Jurisprudence Committee held an interim hearing on barratry. Both the trial lawyers and reform groups agree that the laws will be revisited this session in order to impose heavy penalties for those committing this illegal practice. For more information please visit www.calactx.com.
May 29, 2010
Corpus Chrisit Attorney indicted for barratry
CALACTX at May 29th 2010 8:37 AM
Efforts to bolster laws against illegal lawsuit solicitation were quietly defeated during the 2009 legislative session. Initially, House Bill 148 would have allowed clients to collect triple damages from lawyers who engage in illegal case solicitation. The proposal would have penalized lawyers who use ?runners? to covertly solicit cases or to otherwise exploit the vulnerability of hospitalized accident victims and their families. Unfortunately, these provisions were stripped from the bill.On Wednesday, May 26th, the Judiciary and Civil Jurisprudence Committee held an interim hearing on barratry. Both the trial lawyers and reform groups agree that the laws will be revisited this session in order to impose heavy penalties for those committing this illegal practice. For more information please visit www.calactx.com.
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