LOS ANGELES (CNS) - The State Bar of California announced today it is investigating well-known Los Angeles attorneys Mark Geragos and Brian Kabateck in connection with the distribution of a multimillion-dollar settlement for Armenian genocide victims from which dispersals were made in the United States and France.
Ruben Duran, chair of the state bar's governing board, emphasized that the announcement is not an indication of any misconduct by the attorneys named.
The disclosure of the probe arrives six months after a Los Angeles Times investigation revealed how the landmark $17.5-million settlement devolved into allegations of corruption, diverted funds and disillusionment for ethnic Armenians around the world hoping for compensation.
According to the Times, the settlement with a Paris-based insurer was supposed to go descendants of the genocide and to Armenian charities selected by a newly created French nonprofit.
However, the Times reported such irregularities as the nonprofit having never been established; Christian churches saying they never received the hundreds of thousands of dollars they were supposed to get; some of the money was sent to the "pet charities" of Geragos, Kabateck and others involved in the case, including their alma mater, Loyola Law School; and hundreds of thousands of dollars were directed to sham claimants.
Contacted by City News Service, both Geragos and Kabateck denied any involvement in decisions involving individual payments to victims and had no influence in the claims process.
"The undisputed facts are and will always be that an independent third-party appointed, approved, and overseen by the Court (like in any class action) distributed the settlement funds to the class members," Kabateck said a statement. "We have fully cooperated with multiple prior investigations and inquiries conducted by the State Bar and others (all of whom found no wrongdoing)."
Kabateck said he and Geragos "will continue to provide evidence to prove, once again, that there was no wrongdoing of any kind" by themselves or their firms.
The litigator also charged that the Times "continues to deliberately withhold the fact that they ignored repeated invitations to have an independent forensic analysis of the distribution of the settlement funds be conducted by a CPA and lawyer of their choosing."
Geragos said the state bar's public disclosure of such a probe was highly unusual, and designed to "divert attention" from the case of disgraced lawyer Tom Girardi, who allegedly misappropriated millions in client funds while practicing law, but avoided scrutiny by the bar.
"I've never seen anything like this," a heated Geragos said Tuesday.
In a statement, Duran conceded that confidence in the bar's mission to protect the public "has unfortunately been shaken in recent times by the Girardi matter and what it represents.
Restoring and maintaining the public's trust in the disciplinary apparatus of this agency is imperative."
He continued, "To that end, it is important to emphasize that the State Bar investigates possible misconduct wherever it might occur. The status of attorneys, or the size of their practice, cannot and will not impact our decisions to investigate misconduct. I want to stress that in and of itself this announcement is not an indication of any misconduct by the attorneys being investigated."
Lastly, he added, "the State Bar expresses gratitude to the LA Times for its excellent reporting on the distribution of Armenian Genocide settlement funds.