business ethics

What Leads a Lawyer to Commit Fraud?

By February 28, 2021 One Comment

LawyerJames Wu is certainly not the first lawyer who has been disbarred for committing fraud and if history tells us anything, he will certainly not be the last. The question at hand is “Why?”

James Wu, a disbarred Maryland attorney has pleaded guilty to defrauding an insurance company. For his participation in the scam (in addition to the disbarment) he has been sentenced to probation for 24 months. The judge has also ordered him to pay a restitution of about $4,100.

The total amount of money that James Wu scammed was $7,800. He kept more than half of the reward for his “legal fees.”

Staged Accident

The State Attorney General for Baltimore City issued a press release at the end of October 2019 claiming that four individuals approached Wu and told him they had “orchestrated and faked” a car crash.

There was no attempt made by the claimants to hide the facts, nor was James Wu in any way mislead that what he was about to do was fraud. He willingly represented the claimants and the case. When the funds were released by the insurance company, Wu showed no compunction in charging an outrageous amount of money for taking the risk.

After the payment was made, there must have been suspicions that the lawyer had not been on the level and whether it was a whistle-blower or further investigation, it led to his legal problems.

As we begin to explore this fraud from an ethical point of view, a clear fact simply can’t be ignored. James Wu lost everything for a lousy $4,100. He lost his reputation, vocation, law degree, money and came dangerously close to landing in jail. As a felon, his employment opportunities are limited (at least for the short term) and it is doubtful that he will ever be able to regain certain aspects of a life he once enjoyed.

In committing the fraud, the lawyer obviously felt that there was no oversite and that there was an opportunity for him that was quite low-risk. Unfortunately, he miscalculated on several levels.

The insurance industry is extremely sensitive to fraud and investigators will not hesitate to re-open cases or demand additional information. He was also dealing with four claimants who, at the end of all of their risk taking, made less than $1,000 each. They could not have been happy with the outcome. Perhaps they shared that outcome with others.

One wonders how desperate James Wu must have been to take this chance and make $4,100 for all of his efforts. While his need in committing the fraud was obviously for cash, did he think that by taking a fee of more than fifty-percent of the total award that no one would have noticed?

Finally, there is the matter of rationalization. How did James Wu rationalize that what he was doing was in any way above board, that it was ethical? He cheated both the insurance company and also his co-conspirators. I believe that once he committed to fraud, he felt no compunction in taking what he could.

Of course, when the four people came to him and told him they had staged a car accident he could have elected to simply walk away. He didn’t. Perhaps he figured that they would accept any award money he got for them – and without protest. He was naïve at best.

While there is no honor among thieves as the expression goes, in this case one of those thieves threw away his life for a few bucks.

Finally, where was the ethical training that James Wu should have embraced? It was non-existent, and lost far after law school and licensing.

 

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  • Sabron king says:

    This analysis seems pretty stupid . One sided reporting . I heard the guy made tens of millions in crypto and now owns big resorts in Myrtle . Guess crime does pay

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