Criminal Justice

Lawyer who told judge he had no knowledge of suit filed under his name gets no prison time for lie

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A California lawyer won’t face prison time for lying to a judge about his knowledge of a lawsuit filed against General Motors for clients who were accused of seeking to profit from a fictitious settlement with the automaker.

Joseph Hoats, 72, of California was sentenced Friday to six months of home confinement as part of a two-year term of supervised release, Law360 reports.

U.S. District Judge Paul Gardephe of the Southern District of New York said Hoats engaged in wrongdoing, but he didn’t profit from his clients’ alleged scheme to obtain a loan from a litigation funding company, according to Law360. Gardephe also said Hoats had serious medical conditions.

The State Bar of California still lists Hoats as a lawyer with an active license, but he cannot practice law as a result of his guilty plea to perjury, according to a probation office statement cited in Hoats’ April 8 sentencing memorandum.

Prosecutors outlined their version of the case in an April 15 sentencing memorandum.

Hoats’ clients were former lawyer Christopher Hammatt and his wife, Susan Hammatt. The couple was involved in two suits against General Motors over allegedly defective air bags and an ignition switch. The clients dismissed the first suit after it was transferred to multidistrict litigation. The second suit, which listed Hoats as attorney of record, omitted mention of the ignition switch problem, but it was sent to the multidistrict litigation anyway.

Hammatt, apparently posing as a paralegal, used Hoats’ Gmail account to email litigation funding companies to get a loan based on a fictitious $16.5 million settlement with General Motors, prosecutors alleged. The Hammatts obtained a $75,000 loan agreement in August 2016 from a litigation funding company that was signed with the notarized signatures of the Hammatts and Hoats, according to prosecutors. The company allegedly wired $30,000 to Susan Hammatt.

The second suit was dismissed after General Motors never received requested materials about Hammatt’s asserted injuries and damages. The Hammatts sought to reopen the case with a new lawyer.

During motion practice related to the bid to reopen the case, Hoats falsely claimed in a sworn declaration to U.S. District Judge Jesse Furman of the Southern District of New York that he had no knowledge of the second suit, prosecutors said. Hoats also falsely claimed to have no knowledge of the Hoats Gmail account listed on the lawsuit. The account was used to correspond with General Motors’ counsel and litigation funding companies, prosecutors alleged.

Hoats acknowledged in his plea agreement that he was aware of, and acquiesced in, others’ use of the Hoats Gmail address.

Prosecutors had sought a sentence of 15 to 21 months in prison.

In the sentencing memorandum for Hoats, his lawyer said the misconduct was “an aberration,” and he had an otherwise unblemished career. Hoats went to college on a football scholarship, but his dream of athletic achievement was crushed when he endured a debilitating back injury that plagued him the rest of his life. He worked summers tying steel during college and worked as an investigator for a public defender’s office in Tennessee while in law school.

While in law school, Hoats wrote legislation that became law in Tennessee to divert intellectually disabled offenders to therapeutic settings. His concern for disadvantaged people continued in legal practice, where he showed compassion for clients, including those who could not pay for legal work, Hoats’ lawyer said.

In a March 23 letter to Gardephe, Hoats said the day that he pleaded guilty to perjury was one of the most painful and shameful days of his life.

“I had gotten myself into a toxic situation, and my letter to Judge Furman was a senseless and foolish attempt to escape from it,” Hoats wrote. “It is such a shameful way to end a career that I so cherished.”

A November trial is scheduled for the Hammatts, according to Law360.

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