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Two Bay Area attorneys disbarred for collecting unearned fees

A pair of San Francisco Bay Area attorneys who ran a huge loan modification business that targeted vulnerable homeowners has been stripped of their law licenses for misconduct that demonstrated a “habitual disregard for their clients’ interests.”

STEVAN JOHN HENRIOULLE [#57282], 71, of Foster City, and RONALD VERIDIANO UY [#177157], 54, of Pacifica, were disbarred March 18, 2016 and ordered to comply with rule 9.20 of the California Rules of Court and make restitution.

A State Bar Court hearing judge initially found Uy and Henrioulle culpable of a scheme to defraud clients by charging them fees without intending to perform legal services or by filing meritless lawsuits, as well as misconduct in nine client matters. The attorneys appealed, but a three-judge review panel upheld most of the hearing judge’s findings, including that they aided and abetted the unauthorized practice of law, engaged in moral turpitude and failed to respond to clients, account, return unearned fees, or notify the State Bar they were employing a resigned attorney.

Writing on behalf of the panel, Judge Judith A. Epstein noted that Henrioulle and Uy used a broad intake process that gave them far more clients than they could handle, and advertised to financially distressed people, many of whom spoke English as a second language. They also failed to supervise their litigation manager, a resigned attorney who made misrepresentations to clients and held himself out as entitled to practice law when he wasn’t.

“It was a system designed to fail,” Epstein wrote. “The breadth of Henrioulle and Uy’s incompetence, coupled with the nonrefundable retainers and monthly fees collected regardless of whether services were provided, greatly exacerbated the harm sustained by vulnerable clients, many of whom lost their causes of action and endured foreclosures and evictions.”

Henrioulle’s practice had previously included criminal defense, personal injury, family law, business litigation and estate planning while Uy focused on immigration, personal injury and family law. The two were introduced in 2009 by one of Uy’s employees, Tarik Soudani, who had resigned in years earlier with disciplinary charges pending against him. That year, they created the Law Offices of Uy & Henrioulle to sue lenders for predatory practices on behalf of clients facing foreclosure.

As litigation manager, Soudani was allowed to make initial contact with clients and meet with them without supervision, giving clients the impression he was licensed to practice law. At times, he introduced himself as a lawyer. Upon hiring the firm, clients were asked to sign fee agreements and charged between $3,995 and $4,500 as a nonrefundable retainer. They were then required to pay an additional monthly fee ranging from $500 to $850 and a $600 fee to an outside company for a “predatory lending-forensic loan analysis report.”

Although a hearing judge found the attorneys exploited clients for personal gain without intending to perform, the review panel concluded there was evidence they provided legal services – just not always with competence or success.

“In many instances, they failed to competently provide legal services to their clients, and many lost their homes,” Epstein wrote. “Other clients were able to keep their homes, usually through their own efforts to restructure their loans.”

Henrioulle and Uy were ordered to pay $41,314.22 plus interest in restitution to six clients. Henrioulle was ordered to pay an additional $17,610 in restitution to two other clients.

Uy had one prior record of discipline, a 2006 private reproval for failing to disburse client funds on time. Henrioulle had no prior discipline.