Facts

Attorney Steven J. Segall was employed as an insurance defense lawyer for a Cigna-affiliated law firm. Between 1985 and 1988, Segall and his wife created a sham entity, Legal Research, to submit fraudulent invoices for legal services that Segall performed while already on his firm’s payroll. He referred research work to the fictitious company, billed Cigna Insurance Company through that entity, and deposited payments totaling over $250,000 into his own accounts.

Segall pled guilty to five counts of federal mail fraud (18 U.S.C. §1341). His plea admitted intentional deception: creating false invoices, concealing his control of Legal Research, and causing fraudulent payments to be mailed. Restitution of $254,000 was ordered. The Review Department determined that Segall’s conduct constituted intentional fraud committed in the practice of law, with Cigna’s insured clients as indirect victims of his deceit.

Legal Discussion

The Office of Trial Counsel sought summary disbarment under Business & Professions Code §6102(c), which mandates disbarment for felonies involving intent to defraud committed in the practice of law or against a client. The Review Department found the statutory criteria satisfied, holding that mail fraud inherently involves specific intent to defraud and that Segall’s misconduct directly arose from his professional duties.

However, the Department concluded that only the California Supreme Court possesses constitutional authority to summarily disbar an attorney. It therefore recommended disbarment to the Supreme Court, emphasizing that the State Bar Court may not impose disbarment directly. The opinion examined the separation of powers between the Legislature and judiciary, citing Brotsky v. State Bar and Hustedt v. Workers’ Compensation Appeals Bd. to reaffirm that ultimate disciplinary authority rests with the Court.

Sanctions Table

Holding and Significance

The Review Department held that mail fraud involving client funds constitutes moral turpitude under §6102(c). Because the fraud was executed through Segall’s legal work for clients, the offense was “committed in the practice of law.” Although restitution was ordered, the court found that it did not erase client harm. The decision reaffirmed that only the California Supreme Court has constitutional authority to summarily disbar attorneys, and that the State Bar Court’s role is limited to recommendation.

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