Lawyers tap into public piggy bank

 

Miami Herald Staff

A group of private lawyers has run up six-figure incomes by repeatedly billing Dade County taxpayers for hours they did not work. Many times, the attorneys billed for more than 24 hours of legal work in a single day.

In the past three years, the five most favored lawyers were able to charge taxpayers more than $2.3 million by accepting appointments from friendly judges to represent poor criminal defendants.

Begun with the best intentions to protect the rights of the indigent, the court-appointment system has become a public piggy bank for well-connected lawyers. None of their bills was ever audited.

The Herald reviewed a sampling of their bills -- more than 1,000 -- and found that:

Eighteen times, Randy Maultasch charged more than 24 hours in a single day. On March 28, 1988, he billed 17 hours for a routine six-minute hearing.

Eleven times, Arthur Carter Jr. charged more than 24 hours in a day, including billing more than 30 hours a day on three different Saturdays. He also billed 164 hours in a single week -- only four hours fewer than there are in a week.

Theodore Mastos charged 30 1/2 hours on a single day, including 10 1/2 hours for preparing the same three legal documents over and over again.

"Billing more than 24 hours in a day? That is fraud, pure and simple, " said John Marquess, chairman of Legalgard Inc., a private investigative firm in Philadelphia that scrutinizes attorneys' bills.

Dade Chief Judge Leonard Rivkind and State Attorney Janet Reno reacted with outrage and dismay after they learned of The Herald's findings.

"That shouldn't have gotten by us. That is our mistake, " Rivkind said. "If a lawyer is billing that kind of hours in a day, that is a mistake on our part. If you let me know where that's occurring, we will attempt to recover that money."

"It's outrageous, " Reno said.

INFLATED TIME
Lawyers' bills were rarely scrutinized

For the lawyers, it was easy. The judges signed the bills and rarely scrutinized them. The county paid the bills and rarely challenged them.

The Miami Herald reviewed legal bills submitted by the lawyers who made the most money from court appointments between 1988 and 1991.

Hundreds of abuses were uncovered:

* The five Dade County lawyers who earned the most money from court appointments all billed more than 24 hours in a day. They did it at least 55 times.

* Dozens of lawyers billed hundreds of thousands of dollars for "preparing" routine legal documents. In fact, they merely copied the same "boilerplate" papers and signed them over and over again.

* Eight lawyers regularly inflated the time they spent in court by claiming numerous hours they spent waiting for their cases to be heard or charging for the same hours in multiple cases. Routine five- and 10-minute plea hearings and status conferences turned into charges of seven, 15 and even 17 hours on lawyers' bills.

* Four lawyers negotiated plea bargains in petty criminal cases and then turned in bills that far exceeded those for most murder defendants.

* Three lawyers were paid for jail visits there is no record of them ever making, one for depositions she never took and one for a hearing he never attended.

* One lawyer even billed the county for the time it took him to prepare each bill.

TRACKING ABUSES
Officials suspected some bill-padding

Finding the abuses is difficult. Since each case generates a separate bill, the hours a court-appointed lawyer works are scattered in dozens of different files.

To pin down all of the hours claimed by the attorneys, The Herald compiled more than 30,000 billable hours and reviewed 500 case files.

Each hour of each bill had to be tabulated on a yearly calendar before it became apparent that lawyers were claiming they had worked more than 24 hours in a day.

"More than 24 hours in a day? That's a good trick, " said James W. McRae, an expert on legal fees for the American Bar Association. "I have never heard of anything like this before."

"This kind of billing is just nauseating, " said Orange County Circuit Judge James C. Hauser, author of the three-volume Attorneys Fees in Florida.

After The Herald presented its findings in March to Dade court officials, they promised tougher enforcement and enacted changes in billing procedures.

"We are very concerned about these findings, " Administrative Judge Joseph Farina said. "This is taxpayer money."

For years, everyone in the criminal justice system -- judges, lawyers, court officials -- suspected some bill- padding was going on. But they did not know the extent of it because they never totaled and cross-referenced the hours in each bill.

As a result, Dade's $7 million-a-year court-appointment system that pays lawyers to handle 7,000 cases a year is roughly equal to the budgets for the public defender's offices in Ft. Lauderdale, West Palm Beach and St. Petersburg, which each handled more than 55,000 cases a year.

ACCOUNTABILITY
Judges failed to get tough with lawyers

The root cause of Dade's runaway court-appointment system: Judges failed to hold lawyers accountable for their work. The reason: The cozy relationship between judges and lawyers -- judges give lawyers court appointments, lawyers give judges campaign contributions.

"It's one thing to hire your friends if they can do the job responsibly, ethically and fairly, " Marquess said. "When you hire your friends and you don't hold them accountable, that is wrong and a damnable failure to the public trust."

Three lawyers who billed more than 24 hours in a single day deny that they did anything wrong. All three -- Ted Mastos, Randy Maultasch and Manuel Crespo -- blamed their own sloppy record-keeping. In several instances, they say they hired other lawyers to help them do the work.

Still, they cannot document that the work was done.

Lawyers also blame a system without clear rules for billing.

"The county, in a way, dropped the ball here, " said lawyer Mastos, a former judge who was paid $133,000 last year from court appointments. "It just didn't start when I got started. It has been going on for years."

The three lawyers say they did the work on days other than the ones listed on their bills.

"There's a great deal of difference between poor record- keeping and out-and-out fraud, " said Mastos, who billed 30 1/ 2 hours on Jan. 5, 1989. "My God, I didn't think at any time of trying to defraud the county."

Maultasch and Crespo acknowledged that they overcharged the county in some instances because they couldn't keep track of their hours.

Randy Maultasch said he was "shocked" when he learned from The Herald that he had billed 34 1/2 hours on Jan. 9, 1989.

"I didn't work 24 hours in a day, " said Maultasch, who made $169,357 from court appointments last year. "You can say that there was an honest error made. I never intended to over-bill the county for a dollar."

Manuel Crespo, a member of the Florida Bar's board of governors, refunded $600 in overcharges found by The Herald and pledged to change his billing practices.

"I apologize to you and the county for this inadvertence on our part and assure you that I have taken steps in my office to prevent these mistakes from happening again, " Crespo wrote in a letter to Norman White, a disbursement officer at the Metro-Dade Finance Department.

A fourth lawyer, Mayra Trinchet-Martinez, billed 32 1/4 hours on one day twice and 155 hours in one week in 1988. She initially agreed to an interview.

In a brief telephone conversation, Trinchet said she had two associates and two research assistants who helped handle her caseload. She also said three other lawyers, including Arthur Carter and Randy Maultasch, covered for her several times.

But after Trinchet received detailed questions from The Herald, she did not respond to follow-up telephone calls and a letter. Trinchet was paid $196,611.48 last year from court appointments.

Arthur Carter and Arthur Huttoe, two other lawyers who billed more than 24 hours in a single day, did not respond to The Herald's phone calls and certified letters. Carter made $153,540 in 1989 from court appointments.

In four years, Huttoe, a former judge and the leading money-maker, billed more than $1 million in court-appointment fees. Unlike the others, Huttoe openly assigned many of his cases to several other lawyers. The rules did not prohibit him from doing this.

Huttoe was paid $343,035.50 in 1988. It is unknown how he divided the fees with the other attorneys.

A NOBLE IDEA
System not intended to make lawyers rich

The court-appointment system was never intended to make private lawyers rich.

It was set up after the U.S. Supreme Court ruled in 1963 that a poor criminal defendant has a constitutional right to a lawyer.

In response to the so-called Gideon opinion, state governments set up public defender's offices that hired lawyers for indigent clients.

But a problem developed. Exploding crime rates in the 1960s and 1970s forced public defenders to drop cases due to "conflicts" -- a witness in one case is a victim in another, or several co-defendants have competing interests.

The solution: judges appointed private defense lawyers to fill the gap.

It was a noble idea. The lawyers would work at a discounted hourly rate. They viewed it as a form of community service. It also gave indigents the advantage of being represented by more experienced lawyers.

But in Miami, part of the defense bar came to depend on court-appointments as a steady source of income. As early as 1977, lawyers were able to earn nearly $30,000 annually from appointments. By the early 1980s, several attorneys were making more than $100,000 a year in court-appointment fees.

State Attorney Janet Reno noticed in 1985 that the costs were soaring. She saw that Dade County had spent $3.5 million on court-appointed lawyers, more than half of the state total in 1984.

"Something was terribly wrong, " Reno said.

She pushed for reform, but Dade judges, and the private lawyers themselves, vehemently resisted change.

"It's a pocketbook issue, " said Miami defense attorney Edward R. Shohat, then-president of the Florida Association of Criminal Defense Lawyers, in 1987. "We don't hide from that."

Judges controlled the appointments and the bottom line: they approved the fees with their signatures. "The judges are very reluctant to confront the lawyers, " said Mastos, a former judge.

The buck doesn't stop entirely with the judges. Dade County, required by state law to pay the lawyers' bills, uses three clerks to review bills and question expenses.

But the office was chronically understaffed and given no mandate of tough enforcement by the judges. More than 7,000 bills are submitted a year, and there was simply not enough time to investigate suspicious bills.

"To actually dig into the file -- it takes a long, long time, " said Hugo Benitez, an assistant county attorney who reviews the bills of court-appointed lawyers. "This is kind of like IRS audits. You have to do selective enforcement."

However, when court administrators found a questionable bill, they merely referred the problem to the lawyers, who were allowed to negotiate the contested amounts.

While the bills were usually shaved by a few hundred dollars, no action was ever taken against a lawyer who submitted an exorbitant or questionable bill.

Late in 1987, Benitez wrote a memo warning of "major problems" with accountability.

"There is not a sufficient audit of the motions submitted, one that would explore the basis for the fees being charged, " Benitez wrote to his superiors.

"The court administrator's office does not . . . perform an audit of the work underlying the motion or order, does not study the court files, and does not otherwise challenge the motion submitted or amounts requested."

Benitez suggested that the county hire an auditor to watch over the fees. His conservative estimate of the savings per year: $200,000.

"The policing function of the auditor would encourage more accurate time-keeping . . . resulting in fewer abuses and lower fees, " Benitez wrote.

But, with no public pressure for change, nothing was done.

By 1988, costs of the Dade system had doubled to $7 million a year in less than five years.

Attorney Arthur Huttoe billed county taxpayers $343,000 in 1988 alone -- more than the combined salaries of the county manager, the county attorney and the chief Dade judge.

The lawyers defend their fees by arguing that it's not all profit; they must use some of their money for office overhead. Still, critics object: "The taxpayers of Florida should not be in the business of subsidizing lawyers, " said Reno, the state attorney.

LOW RATES, BIG FEES
Lawyers sometimes handed off cases

At the county's below-market rates of $40 for out-of- court work and $50 in court, it appears mathematically impossible for a lawyer to be paid $343,000 a year. To earn that much, it would require billing more than 150 hours a week -- more than 20 hours a day every single day of the year.

Huttoe, a solo practitioner, did it by handing many of his cases to other lawyers, and then dividing the fees. At the time, no rules prohibited him from doing so.

Court officials knew what he was doing but allowed it.

Huttoe became the virtual chief of a mini-public defender's office in Dade County. The words "Law Offices of Arthur Huttoe, " appear on thousands of court documents -- with the signature of another lawyer above it -- just like the documents signed by Janet Reno's prosecutors and Dade Public Defender Bennett Brummer's assistants.

"He always had more volume than he could personally handle, " said Joy Maxwell Carr, a lawyer who handled some of Huttoe's court-appointed cases. "He always worked with other lawyers on the cases."

Carr refused to say how Huttoe divided the fees.

The practice of handing off cases was prohibited by Dade's chief judge late last year, largely because of Huttoe.

Other high-volume lawyers made huge court-appointment fees working mainly alone.

'CARELESS' ACCOUNTING
How county was billed for 30.5-hour workday

Mastos and Maultasch say they were so busy they couldn't keep track of their hours as they worked. Instead, they waited weeks or even months before estimating their hours.

"I attempted to reconstruct as best as I could at the end of a week, or at the end of a second week, " Mastos said. "I guess it was careless."

One result: Mastos charged the county for 30 1/2 hours on a single day. It happened on Jan. 5, 1989 -- only the third day Mastos was on the job as a private lawyer after being voted off the bench in November 1988.

Mastos insisted that he worked those hours -- just not all on the same day.

"My situation is not a question of the work not being done, " he said. "I know the work was done. That is a lead-pipe cinch."

Mastos said he just had no idea how to bill after spending 15 years in government service.

"If there are mistakes, they are mistakes, " Mastos said. "I want to emphasize I didn't steal. I didn't pad."

In fact, Mastos said he probably made 10 mistakes on that 30 1/2-hour day. There were 10 hours billed on Jan. 5, 1989, which that he said he worked on other days. However, he cannot document precisely when he worked those hours.

"It was dumb, " he said. "It should have been much more precise."

On his 30 1/2-hour day, Mastos billed 10 1/2 hours for merely reproducing the same three routine legal documents in 10 separate cases. He billed at least an hour for each set of documents.

Mastos' admits he did not work an hour each time he billed an hour.

"This is a start-up fee, " Mastos said. "An initial cost for opening a file, having the secretary do these things, labels, putting a file into a system, handling a file over the life of the case."

Mastos said he asked civil and criminal lawyers about charging a start-up fee. They told him, "It is not an unrealistic charge, " he recalled. "I've discussed it with some of the judges and their feeling was, 'All this stuff costs money.' "

But court officials say that lawyers are only supposed to bill for the time they actually put in.

"An hour billed is supposed to be an hour worked, " said Phil Clark, supervisor of the court administrator's finance section.

When Mastos was told of the court administrator's position, he said, "That's a little pompous, isn't it?"

LONG DAYS
Court-appointment work pours in for attorneys

As soon as he began in private practice, Mastos was showered with court-appointment work from his former colleagues on the bench. He received so much work that he ended up billing 83 1/4 hours in his first week as a private lawyer -- even though he didn't begin until Tuesday. In his first nine weeks on the job, Mastos averaged billing 78 hours a week.

He conceded in a tape-recorded interview with The Herald that he did not work that long.

"I work, I estimate, 70 hours a week, " Mastos said. "I don't think I bill that many, but golly, I've worked that many."

Told that he had billed as many as 95 hours in a week, he said, "I would be surprised at that number. That's obviously high."

The first six months of 1989 were especially busy for Randy Maultasch, too.

"I was putting in 12 to 15 hours a day at that point, " he said.

He said he was also concerned about possible retribution from his dangerous clients and such pressures may have caused him to inadvertently overcharge county taxpayers.

"You might think that something took two hours when it really took 1 hour and 45 minutes or an hour-and-a-half, " he said.

But Maultasch's bills show more than minor discrepancies. He billed 34.5 hours on a single day and as many as 107 hours in one week. In all, Maultasch billed more than 24 hours on 18 days from March 1988 to June 1989.

NO PRECISE RECORD
'I didn't keep track of the hours I worked'

Like Mastos, Maultasch did not keep a precise record of the hours he had worked.

"I didn't have a computerized billing system, " he said. "I didn't keep track of the hours I worked in court."

Instead, he said, he relied on his memory and notes. "I became somewhat of an expert at knowing time."

Maultasch was able to bill more than 24 hours on one day by charging 17 hours for a six-minute hearing. His client, William Jones, pleaded no contest to a series of petty crimes, including car theft and dealing in stolen property.

For each of the cases against Jones, Maultasch submitted a separate bill, which is standard procedure. But on five of those bills, he charged the county anywhere from two to four- and-a-half hours for the same six-minute hearing.

That was a mistake, Maultasch said. "I should not have put that time in, " he said, acknowledging that he should have billed for the hearing on only one of his bills.

On that day, March 28, 1988, Maultasch charged the county for 21 1/4 hours of in-court time at $50 per hour. The courthouse is not open for business until 8 a.m.

"There was definitely time that overlapped that I wasn't aware of, " he said.

But Maultasch said it was an honest error.

"To be fair, look at your own taxes, " he said. "Look at your own billing practices. Look at the things that you can attribute to human error. That's all you've got."

Maultasch, like Mastos, insists he did nothing wrong.

"I'm a hard-working, honest attorney, " he said. "I know my cases. I put the time in.

"I'm not sitting here saying that . . . I never slept. That's ridiculous. That's something that I would never say."

Judges don't give court appointments to Maultasch anymore. Publicity about his high court-appointment earnings has made judges nervous about appointing him, he said.

He now runs the Ticket Defense Team, a stable of lawyers who handle hundreds of defendants charged with traffic infractions.

"I'm a volume kind of guy, " he said.

REFORMING THE SYSTEM
Officials agree on need for change

With court appointment fees spiraling out of control, everyone recognized by 1989 that the hourly billing system needed to be reformed. But the lawyers resisted.

"There was an awful lot of crabbing among the lawyers that, 'Oh my God, we're going to lose money, ' " Mastos said.

To eliminate some of the abuses of itemized billing, Dade's chief judge decided to employ a system of minimum fees -- a lawyer would merely check a box and receive his fee without accounting for his hours.

But this system allowed lawyers to make up to $240 a hour, nearly five times the previous rate. It also allowed attorneys to continue to get the same six-figure fees that they were making under the old system.

The only difference: There was no longer any way to check the hours they claimed to have worked.

Several lawyers continued to earn six-figure salaries from the system until June 1991, when Operation Court Broom -- the FBI's massive corruption investigation of Dade's criminal justice system -- jolted the Metro Justice Building.

Three Dade judges and a Miami attorney await trial in August on bribery and extortion charges. A federal grand jury is now focusing on some Miami lawyers suspected of paying cash kickbacks to Dade judges in exchange for court-appointed cases.

Former Dade Circuit Judge Roy Gelber, who was sentenced last week to 12 years, 7 months for bribery and extortion, said he appointed several lawyers as a payback for the $400,000 he raised for his 1988 election campaign.

"That's a lot of campaign debts to pay and this is how you pay them back, " Gelber said on an FBI tape.

Gelber, now a cooperating witness, has identified the lawyers to investigators, but their names remain secret.

Stung by the Court Broom scandal, Dade's judges scrambled to reform the system again.

In December 1991, they set a $75,000 limit on how much a lawyer could earn in a year. To spread the appointments around, they ordered judges to select from a list of at least 30 attorneys.

Last month, the judges quickly made further changes after they were told by The Herald about an array of itemized-billing abuses in 1988 and 1989.

Bills must now be submitted within 30 days after cases conclude. Bills for defendants with more than one case must be audited by the county attorney's office. Judges must now carefully peruse itemized bills.

Despite the reforms, some feel the system still is long on trust and short on accountability.

Critics of the system, including State Attorney Janet Reno, favor court-appointed lawyers with more public defenders.

"Somewhere down the line the system became bastardized, " said Marquess, the legal billing expert. "It is no longer an obligation on the county to the poor. It became a duty to subsidize these characters to the tune of exorbitant fees."

Read more 1990s stories from the Miami Herald

  • Dade judge enjoys lavish lifestyle

    A lengthy Miami Herald investigation reveals that Dade Circuit Judge John Galardi Gale -- a judge since 1972, head of the bustling civil division since 1977 -- has doled out lucrative court appointments to friends, issued favorable rulings to select attorneys and declined to remove himself when his impartiality could be questioned. He enjoys a life style well beyond his public salary.

  • Florida lawmakers generous to a fault

    Millions in state tax dollars given away, spent unchecked

  • Agency executives wrote checks to themselves

    At a time when Miami's oldest inner-city social service agency could not make its payroll, two top executives cashed more than $100,000 in agency checks they wrote to themselves.

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