L.A.-based trial attorney accused of misappropriating clients’ money

The state bar has formally accused a prominent Los Angeles attorney of misappropriating his clients’ money and failing to cooperate or participate with a disciplinary investigation into the allegation.

Shawn F. Khorrami, a trial attorney based in downtown L.A., faces 19 counts of misconduct violations stemming from alleged misuse of funds awarded to his clients, according to documents filed Aug. 26 by state bar attorneys.

The allegations compound the legal woes for Khorrami, who was sued in a New York state court in March for failing to pay $6.3 million owed to hedge fund Hamilton Capital VII LLC, according to the lawsuit.

The state bar is responsible for investigating allegations of misconduct against attorneys licensed in California. The bar’s court hears disciplinary cases in which the bar files formal charges. The bar’s judges can recommend to the state Supreme Court that an attorney be disbarred or suspended for misconduct.

State bar attorneys say Khorrami did not keep adequate records for client funds. In addition, Khorrami received a settlement check from State Farm in 2013 for about $100,000 for a client, Scott Murphy, and failed to keep the client’s portion of the settlement, about $50,000, in his client trust accounts, according to state bar court papers.

When Murphy’s new attorney inquired about a transfer of the settlement funds to a new account, Khorrami failed to reply to five emails and a written letter, officials said. Khorrami also “failed to cooperate and participate in a disciplinary investigation” by not replying to letters sent from the state bar, according to the charging documents.

State bar attorneys say Khorrami also misused settlement funds belonging to two other clients. In both cases, state bar attorneys said he neglected to cooperate with their agency’s investigation.

A “consumer alert” has been placed on Khorrami’s online profile on the state bar’s website. If he fails to respond to the charges within 20 days, he could be prohibited from practicing law.

Khorrami could not be reached for comment. An attorney representing Khorrami in the New York lawsuit did not respond to a message seeking comment.

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