Walter Martinez, 60, of Alta Loma, Calif. pled guilty to 43 felony counts of using cappers – recruiters paid from victims’ insurance settlement – to get clients for his practice. Martinez evidently embellished his scheme with at least three cappers. “The use of cappers is a problem because these individuals usually approach accident victims acting as an attorney with no training and give legal advice to people when they are vulnerable after a collision,” California Insurance Commissioner Dave Jones said in a statement.

The Department of Insurance Auto Insurance Fraud Task Force received information and documentation that indicated Martinez was using cappers. In this case, bank records showed that more than $250,000 in checks were written to the alleged cappers between 2009 and 2012.

Martinez was sentenced to one year in jail, followed by three years felony probation and a $91,000 fine. Two of the cappers sentenced were: Israel Gonzales, 34, of Rancho Cucamonga, who plead guilty to eight counts 750(a) IC; an Michael Melcher, 58, of Covina, who plead guilty to two counts 750(a) IC.

State Bar records reflect that Martinez was suspended for one year, stayed, actually suspended for five months, and was ordered to make restitution, take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect Feb. 23, 2012. Martinez stipulated in the State Bar case to 10 acts of misconduct in six matters. The State Bar information claims that for almost four years, he operated a branch law office in Westminster that was run by two non-lawyers who engaged in conduct that constituted the practice of law. Although he was not aware of their misconduct, he was grossly negligent in not knowing that they were engaged in activities that constituted legal practice. He stipulated that by failing to supervise his employees, he allowed them to engage in the unlawful practice of law. Among other things, the non-lawyers signed up clients, negotiated and settled their claims, paid some settlement funds, accepted settlement funds for other clients but never distributed the money, and did not pay medical bills.

The Orange County district attorney conducted an undercover investigation of Martinez’ law offices, creating paperwork to make it look as if they had been in an auto accident. Martinez’ employee conducted intake and signed up the investigators as clients without any attorney oversight. The employee negotiated and settled the investigators’ claims, received settlement checks from an insurance company and gave the two 50 percent of the proceeds. Several months later, the superior court assumed jurisdiction of Martinez’ practice, which was shut down after the State Bar seized his files and froze his bank accounts.