Arizona Reciprocally Disbars Bankruptcy Attorney

An order removing an attorney from practice in the United States Bankruptcy Court for the District of Arizona drew a reciprocal sanction from the Arizona Presiding Disciplinary Judge

As the Bankruptcy Court found, Ms. Ambs failed to follow numerous rules and regulations applicable in that forum, including 11 U.S.C. § 329 (failing to properly disclose compensation and fee-sharing), 11 U.S.C. § 526(a)(2) (making false and misleading statements), 11 U.S.C. § 528(a)(1)(B) (failing to accurately and clearly explain fees and charges to debtor clients), and Rule 2016(b) of the Rules of Bankruptcy Procedure (failing to properly disclose fee-sharing agreements with other entities). Ms. Ambs also failed to comply with the court’s order to submit a sworn declaration and supplement prior filings, and she appeared late and virtually for an in-person hearing set to consider her alleged misconduct. Ms. Ambs abandoned clients, failed to explain her failures to comply with the court’s orders, and made material misrepresentations to the court.

In imposing sanctions, the Bankruptcy Court found, in pertinent part:

[T]he undisputed record reflects that Ms. Ambs has engaged in a clear and consistent, year-long pattern and practice of violating the provisions of the Bankruptcy Code and Rules intended to protect consumer debtors. When the improper circumstances surrounding her practice were brought to light, Ms. Ambs initially lied to this Court, and Ms. Ambs has since failed and/or refused to participate in these proceedings in any meaningful respect.

The State Bar opened a screening investigation based on the Bankruptcy Court’s order. Ms. Ambs failed to respond to the Bar’s requests for information in that matter and ignored a subpoena served on her, resulting in Order to Show Cause proceedings before the PDJ that she failed to attend. An order of summary suspension issued thereafter.

(Mike Frisch)