Overview

In In the Matter of Oheb, the Review Department of the State Bar Court recommended disbarment following the attorney’s conviction of two felony counts under Penal Code § 549 for accepting client referrals with reckless disregard as to whether fraudulent insurance claims would be made.

Although the crime was not deemed to involve moral turpitude per se, the Review Department held that the surrounding facts — including fee-splitting with a resigned attorney, capping, concealment of payments, reckless indifference to staged accidents, and failure to protect clients — elevated the misconduct to moral turpitude warranting disbarment.

Facts

Respondent entered into a business relationship with a former attorney who had resigned from the State Bar with disciplinary charges pending. The resigned attorney referred dozens of personal injury cases to respondent. The arrangement included:

• Referral of automobile accident cases involving multiple claimants
• Fee-splitting agreements providing the non-attorney up to 75% of attorney’s fees
• Negotiation of settlements by the non-attorney
• Minimal supervision over case intake and development

The referred cases were based on staged automobile accidents forming part of an organized insurance fraud scheme. The resigned attorney and associated chiropractors recruited individuals to pose as injured passengers. Insurance claims were then submitted for bodily injury and medical payments coverage.

Respondent pleaded nolo contendere to two felony counts of violating Penal Code § 549, admitting reckless disregard for whether the referred clients intended to commit insurance fraud.

Evidence showed respondent:

• Knew cases were being purchased (“capping”)
• Split fees with a non-attorney in violation of professional rules
• Failed to investigate red flags (multiple claimants per vehicle)
• Allowed the non-attorney to sign clients and negotiate settlements
• Falsely described payments in financial records to conceal improper fee-splitting
• Failed to notify clients after learning accidents were staged

Criminal Conviction

Respondent was convicted of two felony counts under Penal Code § 549 for accepting referrals with reckless disregard as to whether fraudulent insurance claims would be made.

The Review Department held that § 549 does not inherently involve moral turpitude because reckless disregard is a lesser mental state than knowledge or intent. Therefore, summary disbarment was not automatic.

Additional Professional Misconduct

• Rule 1-320 (Fee Splitting) – Sharing fees with a non-attorney
• Rule 1-311 – Employing a resigned attorney without compliance
• Rule 4-100(A) – Improper trust account practices
• Failure to competently represent clients after discovering staged accidents
• False financial record entries to conceal improper payments

Moral Turpitude Analysis

Although the conviction was not moral turpitude per se, the surrounding conduct demonstrated:

• Intentional fee-splitting and capping for personal gain
• Reckless indifference to fraudulent conduct
• Deceitful financial record entries
• Habitual failure to supervise
• Failure to protect clients once fraud was known

The Review Department emphasized that discipline flows from the misconduct underlying the conviction, not merely the statutory elements.

Aggravation

• Multiple acts of misconduct
• Intentional misconduct for personal financial gain
• Harm to insurers and clients
• Failure to complete restitution
• Indifference toward consequences

Mitigation

• No prior discipline (limited weight)
• Character testimony (discounted due to lack of awareness of misconduct)
• Partial cooperation (limited weight)

Claims of naivete were rejected. The court found respondent knowingly entered into and benefited from the improper arrangement.

Sanctions Table

Key Takeaways

• Crimes not involving moral turpitude per se can still lead to disbarment.
• Recklessness tied to fraudulent schemes may constitute moral turpitude.
• Fee-splitting and capping remain among the most serious violations.
• Concealment efforts significantly aggravate discipline.

Facing a Conviction or Referral Matter?

A criminal conviction does not automatically determine your disciplinary outcome. However, how the surrounding facts are framed and proven can mean the difference between suspension and disbarment.

If you are facing a conviction referral or allegations involving moral turpitude, contact East Bay Law P.C. immediately for strategic defense guidance.