Massive Fraud Against Clients In Class Action Lawsuit Brought By Obama As Lawyer?

I have often written about abuses in class-action lawsuits, such as lawyers ripping off their clients, or using settlement money for ideological causes rather than the benefit of their clients. But even I was amazed by what The Daily Caller recently reported: that massive fraud was apparently committed by lawyers against their clients in a 1995 class-action lawsuit brought by lawyer Barack Obama and his co-counsel, and that 183 clients never received the $360,000 the lawyers claimed was paid to them:

Plaintiffs’ attorneys took home nearly $1 million in Barack Obama’s 1995 class-action discrimination lawsuit against Citibank, but 183 of the 186 plaintiffs did not get a dime.

Three named plaintiffs in the lawsuit — Selma Buycks-Roberson, Calvin Roberson and Renee Brooks –- each collected $20,000. But none of the 18 ordinary, or non-named, plaintiffs that The Daily Caller was able to reach for comment reported receiving any money. This is despite a claim to TheDC by the lawsuit’s initiator, attorney Fay Clayton, that the settlement paid the 186 non-named clients between $770 and $3,250 each. [RELATED: With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans]

According to the court docket, President Barack Obama was lead attorney for Roberson and Brooks, as well as the second listed attorney for Buycks-Roberson, in the lawsuit, which claimed that Citibank discriminated against African-Americans in its mortgage practices. . .

The lawsuit, “Buycks-Roberson et al v. Citibank Federal Savings Bank,” was settled in 1998 when Citibank agreed to pay the plaintiffs, all African-Americans in the Chicago area who claimed Citibank discriminated against them on the basis of their race during the loan application process.

The law firms for the successful plaintiffs split $950,000 of the $1.3 million total payoff from Citibank, of which Obama billed $23,000. A total of $60,000 went to the named plaintiffs, and $360,000 supposedly went to 183 other plaintiffs.

If this is true, the lawyers responsible should be disbarred.

Earlier, I wrote in the Washington Post about how class-action lawsuit “settlements intended to benefit consumers get paid instead to groups that lobby for affirmative action, hate-crimes laws, undocumented immigrants, and public funding for abortions.” (See Hans Bader, “Not Their Money to Give Away,” Washington Post, December 22, 2007, at A16.)

The Washington Post similarly lamented how federal judges use such settlements for purposes unrelated to the underlying lawsuit, giving the money to “religious organizations,” “law schools,” and other organizations that “hire lobbyists” to influence judges (See Editorial, “When Judges Get Generous,” Washington Post, December 17, 2007, at A20.)

The practice seems to be even worse in many state judiciaries than in the federal courts. As I noted in 2007, “In California state court, leftover money from a consumer class action settlement is commonly given not to consumer groups, but to groups that have nothing to do with consumers, like the left-wing La Raza Legal Center; the politically correct Employment Law Center of the San Francisco Legal Aid Society (which seeks to curb employers’ First Amendment rights); the ever-litigious Lawyers’ Committee; and groups that specialize in advocating affirmative action, broader definitions of ‘hate crimes’ (at the expense of civil liberties), or expanded access to welfare programs for illegal aliens. This ripoff of consumers is magnified as a result of practices like ‘fluid recovery.’”