The Living Lawyer Joke

Q: What do you call someone who allegedly forges signatures, takes clients for hundreds of thousands of dollars, lies to police and helps burn down a building in an insurance scam? A: Until very recently, an attorney in good standing.

Highs and lows; peaks and valleys; you win some, you lose some.
That's how Marlene and Charlie remember the past eight years. It all began when the elderly Phoenicians sustained neck and back injuries in an auto accident and failed to recover sufficient insurance money to pay medical expenses. After years of juggling doctor and hospital bills, Marlene and Charlie gave up. They filed personal bankruptcy in 1992.

When their bankruptcy was discharged later that year, they were broke, depressed, still physically disabled by the earlier accident.

Then something truly incredible happened. Just a few months after emerging from bankruptcy, Marlene and Charlie entered a sweepstakes sponsored by a beer company--a $1 million sweepstakes. And they won! An angel must have been looking out for them, they thought. After $300,000 was sent in to cover taxes, they paid cash for a new house. But Marlene and Charlie were determined not to go on any spending sprees. They planned to invest the remaining sweepstakes winnings so they could live off interest income in their golden years.

As they were casting about for safe investment possibilities, Theodore J. Segal, the lawyer who'd represented them in their bankruptcy, suggested they place $216,000 with him. Segal promised a 12 percent return on their "investment." It would be paid monthly. In a signed 1992 "agreement," he even promised to return the entire sum any time Marlene and Charlie demanded it. So they gave him the $216,000.

"Just don't tell anyone about this," they remember the attorney telling them.

They trusted Segal. He was, after all, their lawyer. And he certainly appeared to be "a real nice, competent guy," Charlie says. Sure, there were signs that Segal lived a flashy lifestyle; he drove a 1993 white Lexus with gold trim, boasted of frequent gambling expeditions to Las Vegas and Laughlin, sported gold neck chains and large rings.

But Marlene and Charlie were happy that their successful lawyer cared enough to help them with their investments.

They are a lot less happy now. In fact, they have asked that their real names not be used in this story. The reason: They're embarrassed, terribly embarrassed.

Ted Segal has suckered them out of more than $150,000 of their winnings.

There are a lot of other people who have been embarrassed by Segal.
Dozens of public records and interviews with clients and other creditors reveal that since 1989, Segal's legal career has been accompanied by a litany of serious charges that include misappropriating hundreds of thousands of dollars in client funds, lying to clients and police, amassing huge credit-card debts and failing to pay casinos for advances.

Victims were often unsophisticated clients who simply trusted Segal. In one case, he even held on to $5,000 he'd collected from his daughter's good friend. (After the girl complained, she got her money back.)

In recent years, Ted Segal has also filed bankruptcy and been charged with three felony crimes--forgery, attempted arson and fraud.

At least as early as 1993, Segal's clients were telling the State Bar of Arizona--the semigovernmental body charged with regulating attorney behavior--just how bad Segal was.

The bar association did not take action to suspend Segal's law license until this summer--after he was charged in criminal court with torching a west-side bar in an insurance scam.

And Segal's license is only temporarily suspended. At a hearing that has yet to be scheduled, a hearing officer will recommend what, if any, punishment Segal should receive. Punishments range from what amounts to a slap on the wrist to disbarment.

Bar officials say clients' complaints that their lawyers misappropriated their funds are among the most serious. It usually takes the bar association from four to six months to take the first steps necessary to discipline the lawyer in such cases, bar officials contend. But it took bar officials three years to act against Segal. And they won't explain the delay, citing secrecy rules that prevent them from commenting on disciplinary cases.

In fact, the bar association's only public record of Segal's disciplinary history is a request for the temporary suspension of Segal's license filed with the Arizona Supreme Court in April. In that document, the state bar lists ten client complaints against Segal.

The first complaint, alleging misappropriation of funds, was filed in 1993. Next, Marlene and Charlie filed a complaint in 1994. Another client complained in 1994 that Segal forged her insurance check and kept the money for a year. In 1995 and 1996, the bar received seven additional complaints that now are "under investigation." Those cases center on complaints by Segal's clients that Segal forged insurance checks, lied and siphoned off money for personal use. In some cases, he returned money after being confronted by clients. In many others, he did not.

There is no record of Segal's response to the bar complaints--if he responded at all.

And clients who complained say the bar association told them not to talk about their complaints.

Ironically, the bar association recognizes that its secrecy rules arouse public suspicion. "Some people distrust us because they think we're the fox guarding the chicken coop," chief bar counsel Margaret Downie allows.

In an effort to make the bar association more "consumer based," Downie and other bar association officials have asked the Arizona Supreme Court to change secrecy rules and make public all attorney disciplinary procedures and records. Public comments on the proposed secrecy-rule wipeout end October 4, and the court is expected to rule later this year.

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