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Tuesday, January 19, 2010

Violation of attorney client priviledge tags lawyer with fraud

Attorney client privilege violated

Attorney Brian L. Nehrig guilty

Former Attorney Sentenced in Fraud Case

According to a press release from the FBI, Brian Nehrig, a Fishers Indiana attorney, violated the solemn attorney client privilege between himself and his client. He used confidential information to make money at the client’s expense. He pled guilty to mail fraud and received a light sentence.
"Nehrig took advantage of inside information"
Nehrig is a foreclosure attorney representing CitiFinancial in their foreclosures. Nehrig took advantage of inside information, specifically the bid price Citifinancial was prepared to bid at foreclosure. Nehrig arranged for associates to buy properties at super low prices and then put them back onto the market to make a profit. Even though the profits were small, a few thousand per deal, Nehrig had the obligation to see to it the client made the money, not Nehrig. If the disgraced attorney needed to make more money he should have raised his rates.

"Most attorneys are closed mouthed
about the lender's bid"

The foreclosure and real estate investment strategy is simple and popular. Buy at foreclosure sale, fix up if needed, then sell for a profit. The problem is, one cannot use inside information at the cost of the client in the process. That is why most attorneys are closed mouthed about the lender’s bid. It is the lawyer’s job to get the most bang for the buck for the bank, not to use confidential information for their selfish greed.

The attorney client privilege is a confidential arrangement between the client and the attorney. The lawyer has the obligation to keep all confidential communication to himself. He also has the obligation to advocate for the client, which means help him make the best of the client’s situation. In the case of Citi Financial, Nehrig’s obligation was to maximize the bank’s profits.  Nehrig in counter intelligence blog

The court determined the loss to CitiFinancial was $66,000 bucks. An insurance claim has made the bank whole. It is unknown whether the insurance company will seek repayment for their loss through subrogation.

Nehrig got off with a light sentence. He was ordered to do six months of in-home confinement and 8 hours of community service each month. He is also on 3 years probation. During his probationary period he may not work as a self employed person. Judge Sarah Barker ordered Nehrig to disclose his felony conviction to all employers he works for. The fine was small, only $2,500 dollars.  Why Assistant U.S. Attorney Gayle Helart, who prosecuted the case against Nehrig, went along with such an easy deal for Nehrig is unknown.  Thanks to the FBI for investigating.  FBI annonces guilty plea for disbarred attorney brian nehrig, breach of attorney client priviledge
"He must disclose his felony conviction"

When a lawyer violates the attorney client privilege he is likely to lose his license to practice law. That happened with Nehrig. Since he cannot practice law and he cannot be self employed and he must disclose his felony conviction, finding work could be difficult. Likely, the dishonest attorney will have to pay his fines prior to the end of his probation.

Disclosing lender bid prices, inside dealing, violation of the attorney client privilege, making money by buying real estate at the client’s expense, using associates to cover up low bid prices during foreclosure sales, these are the actions of a dishonest and fraudulent lawyer. Attorney Brian Nehrig got off easy after he cheated Citifinancial during foreclosure deals. One can only hope six months of in-home confinement and 36 months of probation is adequate to send the message.

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