Attorney suspended for accepting illegal fees

By Olivia Olsen | Feb 3, 2017

LOS ANGELES — The State Bar Court of California recently ruled to suspend attorney Barry Steven Jorgensen of Diamond Bar from practicing law for of six months, according to court documents.

The ruling was made Nov. 11, according to the State Bar's website.

Steven was found culpable of misconduct for illegally collecting advanced fees for loan-modification services. He will be required to make restitution in the amount of $61,635 plus interest to end his suspension.

Jorgensen entered into an agreement with a company targeting clients who either were currently in foreclosure or close to it. The company, Legally Yours, would offer loan-modification legal services to clients and match them with an attorney. Jorgensen was hired to assist with about 300 cases for the company.

During Jorgensen’s first year with Legally Yours, fees were paid directly to the company who would in turn pay him a monthly salary. In October 2012, clients were instructed to pay Jorgensen directly for his services.

Jorgensen allegedly violated Civil Code section 2944.7, which prevents attorneys from collecting fees for loan-modification services prior to their completion. The State Bar Court reviewed the five separate counts and found Jorgensen culpable in one. The remaining four were dismissed because Jorgensen provided litigation services in addition to the loan modifications and, therefore, the fees collected were not in violation.

However, the hearing judge found that Jorgensen had accepted retainer fees in one matter after all litigation services had been completed.

Jorgensen was found culpable in events that took place between March 2011 and April 2012. A client retained the services of Legally Yours for the foreclosure of two properties. The client paid the retainer as well as a $750 monthly service fee before paying another retainer fee of $4,000 and adding an additional $750 monthly fee in August 2011. Jorgensen took over the case in October 2011, after which he unsuccessfully negotiated a modification for one property. However, Jorgensen successfully negotiated the second property, though the client rejected the modification because of the high payments.

The State Bar Court found that the attorney and Legally Yours had illegally accepted $5,250 from the client. Jorgensen was also found culpable in aiding and abetting legal services provided by an unlicensed attorney as well as fee sharing.

The hearing judge took into account several factors when deciding Jorgensen’s discipline. Since his admission to the State Bar in 1978, Jorgensen has had no prior history of misconduct and provides volunteer services, according to the State Bar website.

Initially, according to court documents, the hearing judge recommended a 30-day suspension for Jorgensen based on being culpable in one of five counts. However, the Office of Chief Trial Counsel sought a longer sentence on appeal, stating that Jorgensen was culpable on the other four counts as well. According to the State Bar website, a review panel of three judges sided with the OCTC.

In accordance with the suspension, Jorgensen must comply with the California Rules of Court Rule 9.20 subsections (a) and (c). He must tell his clients about the ruling, provide any papers to them regarding their cases, return any fees that are still unearned, and notify opposing counsel in any pending litigation of his disbarment.

Jorgensen must then file with the clerk of the State Bar Court that he has complied with the provisions of his disbarment.

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