SAN FRANCISCO – Thomas Richard D’Arco, who practices in Canoga Park,
admitted to wrongdoing in two client cases and was placed on two years’
probation, facing a one-year suspension if he does not comply with the terms of
his disciplinary probation. He was also ordered to take the multistate professional responsibility examination by the State
D’Arco’s discipline stems from two client cases. The official
Oct. 6, 2015, court document explained that Caridad Perez employed D’Arco to
provide home mortgage loan modification services and other mortgage loan
forbearance involving a California property.
Between Aug. 26, 2010, and Oct. 27, 2010, Perez paid D’Arco
a total of $2,500 in attorney’s fees, the document states. Also, prior to charging and collecting
any of the advanced attorney’s fees from Perez, D’Arco allegedly had not fully performed
each and every service that he had been contracted to perform.
Prior to entering into a fee agreement with Perez, D’Arco also
failed to provide the following separate written statement, in not less than
14-point bold type, as required by Civil Code:
“It is not necessary to pay a third party to arrange for a
loan modification or other form of forbearance from your mortgage lender or
servicer. You may call your lender directly to ask for a
change in your loan terms. Nonprofit housing counseling agencies also offer
these and other forms of borrower assistance free of charge. A list of
nonprofit housing counseling agencies approved by the United States Department
of Housing and Urban Development (HUD) is available from your local HUD office
or by visiting www.hud.gov.”
The State Bar explained the D’Arco willfully violated professional
codes of conduct by accepting fees without completing all tasks agreed upon and
by failing to provide a separate written statement.
There were similar issues brought up with the second client
case involving Howard and Michelle Riscen, who employed D’Arco to provide home
mortgage loan modification services and other mortgage loan forbearance
services with regards to their property located in California.
“On March 31, 2014, the Riscens paid $5,850 in attorney’s
fees,” the court document said. “Prior to charging and collecting any of the
advanced attorney’s fees from the Riscens, (D’Arco) did not fully perform each
and every service he had been contracted to perform. He also did not provide
the written statement to inform his clients of their other options outside of
hiring an attorney.”
The court document explained that D’Arco also failed to
properly supervise his employees, which resulted in his employees informing the
Riscens that his office had submitted a home mortgage loan modification request
and a settlement proposal of a home equity line of credit to the Riscens’
lenders when D’Arco’s office had not.
“Thereafter, on Nov. 20, 2014, (D’Arco’s) employees
submitted a loan modification request and a settlement proposal to the lenders
on behalf of the Riscens, even though the Riscens had previously instructed (his)
employees not to submit a loan modification request or settlement proposal on
The court document said the employees’ actions were done
without D’Arco’s knowledge and consent.
“By failing to properly supervise his employees, which
resulted in improper information being conveyed and work being done contrary to
his clients’ instructions, (D’Arco) intentionally, recklessly, or repeatedly
failed to perform legal services with competence, in willful violation of Rules
of Professional Conduct, rule 3-110(A),” the document said.
Because there was no prior discipline with D’Arco after 37
years in practice and he agreed to refund illegal fees to his clients, the
court found a lighter sentence to be acceptable.
“The seriousness of (D’Arco’s) misconduct is lessened by
refunding the illegal fees to his clients prior to entering into this
stipulation,” the document said. “Since (D’Arco) refunded the illegal fees,
there was little or no harm to the clients, the public, the legal system, or to
By refunding fees and entering into the stipulation with the
State Bar, the court agreed that he demonstrated his willingness to conform to
ethical responsibilities in the future. Thus, D’Arco was still allowed to
practice law as long as he followed the court’s stipulations.