When Paralegals Work for Dishonest Attorneys

Lynne Devenney of Practical Paralegalism has an important post today about a paralegal pleading guilty to fraud for her participation in a mortgage fraud scheme. The paralegal’s participation was small according to the newspaper report, “Norwood received “nominal gifts totaling less than $500” for preparing false closing documents for three mortgage fraud cells, court document [sic] say.” But “[The paralegal] could face two years in prison and a $20,000 fine for two counts of fraudulent real estate settlement services.”

Lynne’s post includes this well-stated admonishment:

I don’t know the circumstances of her involvement, but what I do know is that Norwood is paying a stiff price at a very young age for, at best, extremely poor judgment – including possible jail time and a permanent criminal record. Her participation in this mortgage scheme will impede her chances of becoming re-employed or eventually moving up a professional career ladder, not only as a paralegal, but in almost any job where a background check is necessary.

It’s hard to imagine any gift being worth giving up your future.

In previous posts here we have discussed the quandaries in which paralegals may find themselves when confronted with unethical conduct on the part of an attorney. In those instances there is often a conflict between personal integrity and what the paralegal sees as their (short term) personal interest. However, I suggest that when the attorney is involved in criminal conduct the issues for the paralegal are not just ethical issues. In such circumstances paralegals must take positive steps to protect themselves.

It is truly tragic when a young person gets caught up in a scheme of this sort. Paralegals should be aware that there is a danger in just working in an office where this sort of thing is happening even if you don’t receive any “gifts.” If you are aware of the scheme, it is not difficult to commit an act that will be perceived as being in furtherance of a conspiracy, even if you resolve not to become involved. It is difficult to see in advance how a legitimate year-end bonus will be perceived by law enforcement authorities or a jury once placed in the context of such activities. Even if you can eventually show that you did not participate, the costs of responding to an investigation or defending an indictment are  quite large. In addition, even when you successfully defend against the charge your professional reputation can be tainted by association.

At least one state (South Carolina where this incident took place) is reported as still prosecuting the crime of “misprision” or failure to report a felony. While it is apparently rarely prosecuted by federal law enforcement, this blogger is aware of at least one case where it has been prosecuted in the context of a law office.

If you become aware of this type of conduct in the office in which you work, I recommend getting legal advice from an attorney outside the office immediately. As difficult as it is likely to be, you may need resign sooner rather than later as a matter of self-preservation as well as ethics.

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