Legal News

We?re not Criminals, Just Busy, Sloppy Lawyers

By Ashby Jones

When it comes to lawyers convicted of crimes, we’ll be honest: it galls us just a little more than when we hear that a non-lawyer has committed a crime. After all, lawyers in many states are asked to uphold the U.S. Constitution, the state constitution as well as the laws in which that lawyer plans to practice — and perhaps we should hold them to a higher standard. (Then again, there’s an obvious counterpoint to this: Don’t we implicitly ask every citizen to abide by the law?)

We thought to ask the question because we felt our blood-pressure rise ever so slightly upon reading the news of Charlotte, N.C., real-estate lawyer Victoria Sprouse, who was convicted on Wednesday on 18 charges related to a large mortgage-fraud operation. Here’s the story, from the Charlotte Observer. In contrast, when we read recently of a mortgage-fraud scheme out in the Seattle area, the needle on our emotional barometer barely moved.

In any event, Sprouse, 38, and several co-conspirators were accused of reaping millions from schemes involving more than 200 properties and $15 million in fraudulent loans. The government charged that she lied to lenders, falsified settlement statements and stole from her clients. In one of the schemes, according to the Observer, conspirators would buy and flip-sell properties often at inflated prices on or about the same day, stealing tens of thousands of dollars with each flip.

After a jury deliberated for about five hours on Wednesday, the hammer was dropped: Sprouse was guilty on money-laundering, bank fraud and conspiracy charges. According to the Observer, the crimes could put her in prison for more than 25 years.

Sprouse began practicing law in North Carolina in 1997. Her firm grew so busy, she was conducting 3,000 mortgage closings a year. Prosecutors portrayed her as a calculating lawyer who contributed to a wave of foreclosures in the Charlotte area. The crimes began in 2000, prosecutors say, and ended in 2004.

"All I can say is I’m disappointed," Sprouse told the Observer. “I’m disappointed the jury could think that mistakes, errors and sloppiness in a busy law firm equates to fraud. … I have so many supporters. I’m sorry they were let down as well.” (For an alternative take on the Sprouse situation, click here for an essay by an economist and a lawyer called “The Federal Railroading of Victoria Sprouse.”)

Guilty or not guilty, this last quote from Sprouse was particularly intriguing. In other words: we aren’t criminals, just bad lawyers.

Full post as published by Law Blog - WSJ.com on April 03, 2009 (boomark / email).