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Lawyers caught up in state bar probe over Armenian genocide settlements

Mark Geragos and Brian Kabateck, two LA-based Armenian American attorneys, have been accused of misappropriating funds from class action settlements relating to the genocide.

LOS ANGELES (CN) — The State Bar of California made an unusual announcement Tuesday: It's investigating two highly prominent attorneys, Mark Geragos and Brian Kabateck, amid claims that money from a multimillion-dollar class action settlement relating to the Armenian genocide was stolen from plaintiffs.

"It is important to emphasize that the state bar investigates possible misconduct wherever it might occur," Ruben Duran, chair of the State Bar Board of Trustees, said in a statement. "The status of attorneys, or the size of their practice, cannot and will not impact our decisions to investigate misconduct."

He added: "I want to stress that in and of itself this announcement is not an indication of any misconduct by the attorneys being investigated."

In a phone interview, Geragos said he was infuriated by the announcement.

"They're waiving confidentiality on an investigation they haven’t done, in a matter that’s been investigated three times in the last 12 years by both inside and outside counsel," he said, adding: "Fucking idiots."

In a written statement, Kabateck said: "The undisputed facts are and will always be that an independent third-party appointed, approved, and overseen by the Court (like in any class action) distributed the settlement funds to the class members. Neither Mr. Kabateck nor Mr. Geragos were involved in any decision relating to individual payments to victims, nor were they able to decide, review or influence claims made by class members. We have fully cooperated with multiple prior investigations and inquiries conducted by the state bar and others (all of whom found no wrongdoing)."

Geragos is best known as a criminal defense lawyer, having represented such celebrity clients as Michael Jackson, Winona Ryder, Chris Brown and Jussie Smollet. Kabateck is a plaintiff's attorney, having represented a number of surviving families of victims in the Lion Air Flight 610 crash of 2018, and Los Angeles ratepayers in the Department of Water and Power billing scandal. He is also a former president of the LA County Bar Association. Both lawyers are Armenian Americans.

Kabateck, Geragos and a third Armenian American lawyer, Vartkes Yeghiayan, filed two class actions against insurance companies on behalf of families of victims of the Armenian genocide over unpaid life insurance claims. The suits were both for a combined $37.5 million. But as the Los Angeles Times laid out in a lengthy investigation published this past March, numerous victims' descendants, as well as churches, never got the money they were owed. Before he died in 2017, Yeghiayan claimed Geragos and Kabateck "had splurged on first-class travel and treated the descendants’ money as 'petty cash,'" according to the Times.

Geragos and Kabeteck, meanwhile, have blamed others for the misappropriated funds, including Yeghiayan, whom they sued in 2011. In a letter to the Times after the investigation was published, Kabateck wrote, "I have always been deeply saddened that Mr. Yeghiayan and his co-conspirators took money from the decedents of victims of the Armenian genocide, and that is why I worked so hard to reveal their actions and help hold them accountable."

Duran, in his statement, thanked the LA Times for "its excellent reporting on the distribution of Armenian genocide settlement funds.”

The State Bar of California is still reeling from the Tom Girardi scandal, in which it was badly implicated. Girardi, another prominent plaintiff's attorney — and famously married to "Real Housewives of Beverly Hills" star Erika Jayne — has been accused of stealing tens of millions of dollars from his clients, including some families of the Lion Air crash. A Times investigation found that Girardi was, for decades, able to avoid discipline and hide his misdeeds, in part by befriending judges and key figures in the bar association.

In his statement, Duran pointed to Girardi as the reason why the bar was announcing the investigation.

"Confidence in our ability to do so has unfortunately been shaken in recent times by the Girardi matter and what it represents," he said.

Geragos called it a ruse. "The obvious conclusion is they're just trying to divert attention, because of Girardi. I have nothing to do with Girardi," he said.

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