“Legal Genius” Pleads Guilty to Fraud
This page of the Legal Genius" law firm's website says its lawyers have experience with federal investigations as well as fraud and conspiracy claims.
At least one of them does.
That would be its owner and operator, Mathew Schwartz, who pleaded guilty on October 15 to, well, federal fraud and conspiracy charges. According to the ABA Journal (which links to the DOJ press release and the plea agreement), the scheme involved stealing traffic crash reports from the Detroit Police Department for use by others to identify and solicit the victims as potential clients. The people who stole the reports sold them to a company called the Accident Information Bureau," which then resold them. Schwartz was accused of buying the reports from this company and then reselling them yet again, earning up to $10,000 a month from this, plus referral fees. Schwartz was also paying people to visit the victims' homes and try to sign them up as clients, which the Legal Genius should have known violates Michigan Rule of Professional Conduct 7.3.
Schwartz is responsible for the two best details of this little story, the first being the now highly ironic name of his firm, and the second involving the way he made his payments. According to the plea agreement, Schwartz would put $10,000 in cash in the barbecue grill in his backyard, and then text a co-conspirator to come pick it up. Seems like there would be sneakier ways to handle transfers like this, but I'm no expert.
The same page of the Legal Genius website mentions money laundering," but I guess that's not quite the same thing.
The conspirators weren't very good at that either, and hence many of the charges involve trying to hide all this income from the IRS. In addition to the barbecue payments, Schwartz tended to pay co-conspirators with checks made out to cash," something that evidently does not fool the authorities, and he also lied to federal agents during the investigation. One of these lies was a claim that he did not personally profit from the client referrals being made as part of this scheme. Lawyers do sometimes act for altruistic reasons, but not so often that I would expect a federal agent to accept that story at face value.
For now, Schwartz is still a member in good standing of the Michigan Bar (he only pleaded guilty about ten days ago), and LegalGenius.com is still online. Although the website uses pronouns like we" and us," I very strongly suspect this is a solo operation that involves referring most cases out to other people, not actually a firm that itself has experienced attorneys across the nation," as the site says.
The company's logo has an image of Schwartz superimposed over the word GENIUS," so that he is the I" in GENIUS," in other words. I thought that was a nice touch. And, after all, according to the site, Schwartz established Legal Genius and LegalGenius.com based upon his reputation as one of this generation's smartest and most successful lawyers.'"
There's no source for that quote, but I'm sure that's just an oversight.
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