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Fort Wayne attorney suspended for unethical client recruitment

February 28, 2018

A Fort Wayne attorney previously disciplined for deceptive marketing practices has been suspended from the practice of law for nine months after he engaged in another unethical scheme to garner more clients.

As an attorney representing owners of allegedly defective modular or manufactured homes, Robert John Wray was hired to represent Douglas Stephan, owner of Stephan Consulting, Inc. The two men developed a relationship whereby Stephan would solicit other owners to become plaintiffs in his claims against Joseph Callaghan, the manufacturer of his allegedly defective home.

Stephan, through his business, would offer to perform home inspections for the owners, but would ask them to sign investor agreements that falsely stated the owners had already entered into fee agreements with Wray, who drafted and approved the agreements without directly communicating with the owners. The agreements also falsely stated Stephan would advance litigation costs in exchange for 50 percent of the net recovery, though he rarely followed through on the promise to advance payments. Stephan also asked the potential clients to sign attorney agreements giving Wray a contingent fee somewhere between 33 and 55 percent and a $1,000 nonrefundable retainer.

After Wray settled the cases for his recruited clients, he would draft a “Disbursement Authorization and Acknowledgement” form that, in some cases, inaccurately reflected the actual distributions and advancement of costs. Further, when the relationship between Wray and Stephan began to deteriorate, the attorney falsely told his clients he had paid Stephan his share, so they did not have to pay him.   

Wray later testified there was often a significant delay between the clients signing the agreements and Stephan delivering the agreements, while the clients testified to a lack of adequate communication about their cases. Meanwhile, Wray was also accused of failing to keep adequate records of his trust accounts and separate ledgers for each of his clients between 2008 and 2015 and of keeping “more than a nominal amount” of personal money in the trust.

When a disciplinary investigation into Wray’s conduct began, he told the Indiana Supreme Court Disciplinary Commission that Stephan Consulting did not solicit clients for him, but merely provided financing and consulting to the homeowners. Now-Justice Christopher Goff – who served as Wray’s hearing officer and did not participate in the Supreme Court’s disciplinary decision – determined that statement was false and filed a 64-page report against Wray.

Goff and the commission ultimately accused Wray of 16 violations of Indiana Rules of Professional Conduct and Admission and Discipline Rules, including:

  • Rules 1.4(a)(2), (3) and (4)
  • Rule 1.5(a)
  • Rule 1.15(a)
  • Rules 5.3(b) and (c)
  • Rule 5.4(a)
  • Rules 7.3(a), (e) and (f)
  • Rule 8.1(a)
  • Rules 8.4(a) and (c)
  • Rules 23(29)(a)(2) and (3)

Wray disputed all of the alleged violations except those related to his trust account, but the remaining four justices agreed with Goff’s conclusion in his capacity as hearing officer that there was evidence of an existing agency relationship between Wray and Stephan. The court specifically pointed to evidence of the fact that Wray had helped incorporate Stephan Consulting, while Stephan served as the primary point of contact for the clients he recruited to Wray.

“In sum, this was not merely a referral system, and Respondent’s role in the client recruitment process was anything but passive,” the court wrote in a Tuesday per curiam opinion.

The court found sufficient independent evidence to corroborate each of the allegations against Wray, despite conflicting testimony from Wray and Stephan. Noting the attorney’s dishonesty and previous public reprimand for deceptive advertising and improper use of a trade name, the court suspended Wray for at least nine months without automatic reinstatement.

The costs of the proceedings were assessed against Wray. The case is In the Matter of Robert John Wray, 02S00-1511-DI-648.

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