Texas attorney faces lawsuit by former clients over fraudulent investment advice they claim was part of a Ponzi scheme.
The Supreme Court of Texas has accepted the resignation of a Southlake attorney who was sued last year by former clients who alleged that he provided
fraudulent investment advice in recommending them to invest $6.7 million in a mining and exploration company that turned out to be a Ponzi scheme.
The high court order concluded that Gregory G. Jones’ decision to resign in lieu of discipline by the State Bar of Texas was in the best interest of the public and the legal profession. The Sept. 8 order cancels Jones’ law license, orders him to surrender his bar card, and requires him to pay $30,000 in restitution to two former clients before he can seek reinstatement as an attorney.
According to the Commission for Lawyer Discipline’s response to Jones’ resignation, he had two allegations of professional misconduct pending against him at the time of his resignation. They included allegations that he accepted a $20,000 retainer from an employment law client but failed to return the money to her after he neglected her benefits case; and that he charged $16,371 in attorney fees to a business client but failed to return the payment after he neglected a breach-of-contract case.
Jones was sued in 2014 in a Tarrant County district court by a group of plaintiffs who hired Jones in 2009 to represent them in a $6.7 million business venture that they alleged was a Ponzi scheme in France/US Investment v. Jones. The plaintiffs allege that Jones also represented that he was familiar with the business ventures in Wyoming and vouched for the companies in which the plaintiffs invested.
“He took the plaintiff’s money and, without authorization from the plaintiffs, paid himself a fee from the money entrusted to him by his clients,” the petition alleges. The investments “turned out to be a fraudulent ‘Ponzi scheme,’ and plaintiffs lost all of their investment as a result.”
Jones filed a response to the petition earlier this year generally denying the allegations. He did not return a call for comment.
Larry Friedman, of Dallas Friedman & Feiger who represents Jones in the legal malpractice case, said his client has decided to make a career change.
“The decision to turn in his bar card was a decision to make a career change at this stage in his life,” Friedman said. “He started a new company in water filtration to meet the needs of the fracking industry and he’s doing well in that business.”
Originally posted by John Council on TexasLawyer.com.
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