Mommie Dearest lawsuit against Mountain Homes Youth Ranch

[Oscar]

Peninsula attorney faces disbarment for mishandling $157,600, officials say

SAN FRANCISCO -- A Peninsula attorney faces disbarment after being found culpable of mishandling a trust for her son after $147,000 disappeared, people involved in the case say.

Elizabeth M. Barnson Karnazes, of Foster City, was found guilty Monday in State Bar Court of 10 misconduct charges centering on how she managed more than $157,600 of her 25-year-old son's money, according to the ruling. She won't legally be permitted to practice law starting Thursday and a permanent disbarment, unless she appeals, would likely take effect when the state Supreme Court weighs in.

Karnazes' attorney says she was the target of her mentally ill son Zachary Karnazes, whose complaint sparked the case, and a State Bar that has made a "total hash" of the accounting in the investigation.

"Her son will have destroyed her if she is disbarred," said attorney Paul Vapnek, who added he couldn't comment on the conviction because he had not yet seen the ruling of State Bar Court Judge Lucy Armendariz.

California currently has about 176,000 licensed lawyers and 89 were disbarred in 2011, said Bar spokeswoman Laura Ernde. Another 58 lost their law licenses in 2010.

It's not the first trouble with the State Bar for Karnazes, 57. She was publicly reprimanded in 2010 for a 2007 incident where she was caught shoplifting from a San Mateo Sears store. Clad in a Santa Claus hat she threatened to kill herself as police questioned her, which led to her being forcibly hospitalized, according to State Bar records.

In the current case, Karnazes was the attorney for her son in lawsuits against a camp for troubled youth called Mountain Homes Youth Ranch and Odyssey School, a private school for gifted children. The 2005 youth ranch suit ended with a $40,000 payout and the 2006 case against Odyssey paid a $60,000 settlement, court records show. A third suit resulted in a $56,995 payment. Her son also received a $700 settlement in a workers' compensation case.

All the money ended up in Zachary Karnazes' trust account. But authorities say his mom broke a host of rules with how she managed the account, including depositing her personal money into it and keeping no records of where the money went. The most serious allegation charged that though the account was supposed to hold $157,689.50, in spring 2011 the balance was less than $10,000, according to Bar records.

Despite written requests in 2009 from her son for money to pay for medical treatment, Karnazes waited until June 2012 to give him a check for $53,507.97, according to the Bar.

As the Bar was investigating her, Karnazes in June 2011 also tried to get her son to waive his rights to the lawsuit money and prevent him from complaining. In return, he would get $63,000 of his own money. The proposed agreement said "in the event of any inquiry" the Karnazes would say "all of Zachary's claims have been resolved and he is not at liberty to discuss the terms."

The Bar also said Elizabeth Karnazes provided, just days before her June trial was to begin, a "summary account" of how son's money had been used. She noted $28,391.70 in fees and costs as well as the roughly $53,500 payment to her son. However, that left missing the remainder of the $157,600 that was supposed to be in the account, the Bar said.

Vapnek, Karnazes' lawyer, said the case should never have gotten this far.

"Instead of trying to resolve a problem between a mentally ill child and a lawyer the Bar decided" to pursue the charges, he said.