DISTRICT JUDGE RULES THAT ATTORNEY CHARGED IN SCOTT ROTHSTEIN PONZI SCHEME CAN PRACTICE LAW

Mr. Bates

Back when I was a guest of the Federal Government, on a Racketeering charge, for money laundering, I noticed that a lot of inmates held private, or commercial, pilot licenses entitling them to fly aircraft. The FAA always sought to revoke their licenses, through administrative proceedings, even when they were generally in custody for maritime drug smuggling, and many of them came to me for advice and assistance, with the preparation of their cases.

Having had the good fortune, after my service in Southeast Asia, to have learned to fly from a Coast Guard pilot who had been an Army aviator in Vietnam, I was sympathetic to their plight. The argument that I made, repeatedly, in their briefs, was that their crime was unconnected to aviation. I also offered up a suspension for the remainder of their prison sentence.

 Most of the decisions were favorable, I am pleased to report, giving those individuals something vocational that they could use after their incarceration. I know that the FAA was unhappy with those administrative rulings, for on the day that I was released, I noticed that there were several FAA regional office staff attorneys at the prison; they were obviously going to hold hearings in the remaining cases, and give those pilots due process, so that they could revoke their tickets, within the scope of the administrative regulations. I guess that I was a more effective advocate than I thought. I hope that some of those individuals that I assisted went straight after prison, and used their licenses to find gainful employment.

Now, let me apply the lessons of that experience to a criminal case, set for trial, as part of a billion-dollar Ponzi scheme, where an unethical lawyer sold participations in phantom court settlements to seemingly sharp investors who thought they had hit the mother lode.

If you have been following the Scott Rothstein case on this blog, you know that attorney Douglas Bates  has been charged with four counts of Wire Fraud, in connection with Rothstein's massive Ponzi scheme. Bates told Ponzi victims that he had referred several cases to Rothstein, when, in truth and in fact, he had done no such thing. He also assisted in defrauding a major investor.

As a condition of his bond, the US Magistrate Judge in his case barred Bates from the practice of law. His attorney sought a reversal of that ruling from the District Judge. He argued, correctly I believe, that Bates, who is a workers' compensation and personal injury attorney, allegedly committed crimes unrelated to his legal specialties. The Court, while conceding that point, held that there were instances where such a bar would be appropriate. In the end, he split the difference, ordering that Bates could resume the practice of law, but only under the close supervision of another attorney, and that he could not handle client funds.

A fair result, and was the public protected ? I would like to think so, but if the US Attorney's Office proves up its case, and can show that he facilitated the fraud, attorney Bates will soon be on vacation from the pracice of law for anywhere for 5 to 20 years.