Legal aid firm a scam, suit alleges

Bay Area lawyers file a civil action against what they say is a phony center that preys on people seeking help warding off evictions.

By Henry Weinstein
Los Angeles Times Staff Writer

October 24, 2007

One of California's largest law firms has filed a civil case seeking to put an allegedly fake legal-aid operation out of business in Northern California.

Legal experts said the lawsuit tries to address a growing problem statewide.

The suit, filed in Contra Costa County Superior Court last week, alleges that the Legal Center for Legal Aid has swindled Northern California residents who were seeking assistance with evictions.

San Francisco-based Morrison & Foerster asserts the center employed false advertising in a "brazen . . . scam" to deceive four people, including an elderly blind man, a double amputee and a plaintiff with a severe head injury, according to court documents.

The center provided either no or faulty assistance to the plaintiffs and continues to use false advertising and other illegal tactics, according to the suit, filed in Martinez.

Morrison & Foerster attorneys, led by Angela Padilla of the firm's San Francisco office, are seeking an injunction barring the center, and its principal, Richard Gugg, from engaging in fraudulent activities.

The center advertises in a number of California Yellow Page directories and its Yellow Page entry "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," Padilla said in a written statement.

The suit was filed on behalf of the four individuals and two legal aid organizations in Northern California -- Bay Area Legal Aid, which serves low-income people in six counties, and Legal Services of Northern California, which assists poor people in 23 counties.

Padilla and her colleagues are asking a judge to order that the center "immediately cease" referring to itself as "Legal Center for Legal Aid" or using any combination of words "that may reasonably mislead the public into believing" the defendants "provide the services of a legitimate nonprofit 'Legal Aid' organization that provides free service to low-income persons."

In addition, the suit accuses the center of unlawful practice of law, false advertising, conversion of the assets of another person, professional negligence, fraud and financial abuse of the elderly.

The situation described in the lawsuit "is a very common problem," which is increasing, Toby Rothschild, the chief lawyer at the Legal Aid Foundation of Los Angeles, said Tuesday.

"If you look in the phone book under legal aid, you will see a whole bunch of listings, and only one of them is us," Rothschild said.

Nearly four years ago, Rothschild said his organization, represented by the Los Angeles office of Jones Day, sued the California Law Clinic, a Los Angeles-based business, for misrepresenting itself as a public interest organization working on behalf of low-income people.

The clinic operated under several other names, including Legal Aid Crenshaw and Legal Aid Compton, in areas where the Legal Aid Foundation has offices.

In 2005, Los Angeles County Superior Court Judge James R. Dunn issued an injunction against the clinic and its principal, Jerry Bloom.

Dunn ruled that Bloom, who used several aliases, had engaged in false advertising and unfair competition and willfully infringed the trademark that the Legal Aid Foundation had on its name. The judge awarded $1.5 million in damages, but Rothschild said Bloom "skipped town" before the damages could be collected.

One of the plaintiffs in the new case is Albert Leonard, 72, of Richmond, Calif., who is blind. After being served with eviction papers, the suit states, Leonard called directory assistance seeking a phone number for legal aid. He was given (800) 607-2902, which had a recorded message offering help.

According to the suit,20 minutes after Leonard left his number, he got a return call instructing him to deposit a $425 check payable to Richard Gugg into a Bank of America account. The man on the phone faxed Leonard a form that he said wasn't any help with the eviction. Leonard eventually found a legal-aid lawyer, David Levin, in Richmond, who helped resolve his problem.

"I was being evicted and didn't have much time to respond," Leonard said in a statement released by Morrison & Foerster.

"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 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."

Leonard said he never got his $425 back. The canceled check was submitted as an exhibit with the suit.

The toll-free number remained in operation Tuesday. It also provided another 800 number for other legal problems, such as auto accidents, divorces or criminal cases.

Messages left for Gugg at both numbers were not returned.

The California Bar Assn.'s directory of attorneys has no listing for Gugg.