NCJ Number
121190
Journal
ABA Journal Volume: 75 Dated: (December 1989) Pages: 58-65
Date Published
1989
Length
8 pages
Annotation
A network of Southern California law firms, controlled by Lynn Boyd Stites, were recently discovered to be conspiring to defraud insurance companies. This fraud may cost the insurance companies $200 million or more in phony and unnecessary bills for defense of lawsuits against policyholders.
Abstract
According to affidavits filed by Assistant U.S. Attorney George Hardy in San Diego, for six years, the lawyers in the network have systematically, and with great deliberation, inserted themselves as defense and/or plaintiff's counsel in Federal and State court civil actions for the purpose of expanding and prolonging the litigation and generating billable time and services. Other victims of the scandal to defraud were the judicial systems of the United States and the State of California. Reports confirm that Stites is the scheme's organizing attorney, although attorneys for Stites and others have denied the accusations. Lawyers believed to be part of the network were involved in at least five major sets of litigation in Los Angeles, San Diego, and Orange County and in a number of smaller cases throughout Southern California. Some insurance companies paid $25 million in fees and had no idea what was going on. A Federal grand jury in San Diego was expected to indict a half-dozen or more lawyers.