A wealthy Tempe attorney has been sentenced to five years' probation, forced to give up hundreds of thousands of dollars, and stripped of the right to practice law — all because he stole money he didn't need.
The criminal case against Jay Bansal has several offbeat details, including that the ex-lawyer already had achieved the American Dream, and then some, when he decided to begin ripping off his clients. But the main point hammered home by a recent sentencing order in federal court is that while Bansal isn't going to prison, he's paying a steep price for his deeds.
Bansal's a graduate of Michigan Law School who began practicing in Tempe in 1995, focusing on personal-injury cases. He did quite well over the years, making the Arizona Republic's "Priciest Home" section in 2009 when he and his wife, Rajani, bought a $5 million Tempe mansion.
"This case involves an inexplicable decision by an already-wealthy lawyer to steal . . . from some of his clients," begins a November 30 sentencing memorandum from the Arizona U.S. Attorney's Office.
A small part of Bansal's practice included helping people who'd been injured in some way by vaccines, court records show. Since 2000, he represented about 30 clients as part of the National Vaccine Injury Compensation Program, which is run by the U.S. Department of Health and Human Services. Lawyers who help victims under the program receive certain fees for their work, but aren't allowed to charge a percentage of an award recovered in a legal action, also known as a contingency fee.
Starting in 2008, and for no apparent reason, Bansal randomly targeted some of the vaccine clients for a fraud scheme, taking amounts up to $200,000 from their court-ordered awards. FBI analysts later went through records of all of his other cases and found no problems with them.
He paid himself about $100,000 a year over eight years in illegal fees, for a total of about $800,000. Amazingly, though, he was pulling in millions from his legitimate cases over the same time frame — records state that the theft amounted to only five or 10 percent of his annual income.
His plan worked until the middle of this year, when a client who delved into her own court records discovered that she should have been paid $142,000, but Bansal had promised to send her just $85,000. When the unnamed client, Bansal, and a representative of the federal Court of Claims discussed the problem during a conference call, Bansal's illegal retention of a contingency fee was disclosed.
Once caught, Bansal went to "extraordinary" lengths to make amends, noted federal prosecutors, saying they've never seen anything like it. Within a few weeks, the lawyer had cut checks to his victims for the total amount he stole from them, plus 10 percent interest. When clients began receiving their checks and calling him to find out what was going on, records state, he gave them the hard truth. He pleaded guilty to the charge on October 2.
Still, he ultimately was charged with a single felony count of mail fraud. Bansal was supposed to sentenced today by Arizona U.S. District Judge John Tuchi, but following a motion to expedite his case last month, his sentencing was moved back to November 30.
Besides the five years of probation, Tuchi ordered Bansal to pay a $100,000 fine and give all of his cases to other lawyers. In an "unusual" provision of his sentence, records state, he's agreed to give up hundreds of thousands of dollars in fees owed him from all of his existing clients in legitimate cases. He was also forbidden from practicing law even if the State Bar of Arizona didn't disbar him; the Bar did, however, in an order from last month that was post-dated to today.
"In sum, Bansal will emerge from this process a disgraced, disbarred felon who can't pursue the vocation that's defined his life," states a motion signed by assistant U.S. attorneys Dominic Lanza and Peter Sexton.
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Although the case was "motivated by greed and hubris" and a criminal like Bansal might normally receive prison time, the prosecutors wrote, they agreed his repayment to victims and a "constellation of unusual restrictions and punishments.
"It's unlikely that any lawyer would look at what's happened to Bansal and conclude that stealing from clients is still worth the risk," they wrote.
A message left at Bansal's former law office wasn't returned on Monday.
UPDATE: Bansal retained the right in the agreement to apply for reinstatement of his law license.