Clark Smith Villazor LLP and one of its name partners are facing a lawsuit from a former client, Charlie Abujudeh, a convicted securities fraud defendant. Filed in New York state court on Wednesday, the suit alleges that the firm’s mishandling of Abujudeh’s case led to his arrest by the FBI and resulted in substantial financial penalties.
Abujudeh claims that the firm, represented by Patrick Smith, ignored his explicit instructions to cooperate fully with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) to settle the charges quickly. Instead, Abujudeh alleges that Smith and the firm pursued an adversarial stance to generate more fees.
Abujudeh’s lawsuit details how, in 2021, he was persuaded to sign a new retainer agreement that converted the firm’s hourly billing rate into a fixed fee of $175,000 and imposed an additional fixed fee of $825,000 for trial coverage. The agreement, according to Abujudeh, incentivized the firm to avoid settlement discussions to ensure higher fees from potential trials.
