Mpls. attorney held in contempt for not paying $80K in sanctions

  • Article by: RANDY FURST , Star Tribune
  • Updated: January 21, 2014 - 9:52 PM

William B. Butler claimed lack of funds. Case stems from filing of frivolous foreclosure lawsuits.

 

A federal judge held a Minneapolis attorney in contempt Tuesday and asked the U.S. attorney’s office to consider opening a criminal investigation against him for failing to pay $80,000 in sanctions imposed in 2012.

U.S. District Judge Patrick Schiltz said William B. Butler falsely claimed to have no money to pay the sanctions, while he generated more than $1.35 million in income from February 2012 to October 2013 and indulged in lavish expenses on restaurant meals, liquor and yoga.

Schiltz said Butler established a corporation called the Church of Jesus Christ and Latter Day Austrian Economists with “only one real function,” which was to pay Butler’s living expenses. Butler is the only shareholder, Schiltz said.

Butler was suspended from practicing law in front of the Eighth U.S. Circuit Court of Appeals in December.

In January, he was suspended from practicing in U.S. District Court in Minnesota by Chief Judge Michael Davis.

Both courts accused Butler of filing frivolous lawsuits on behalf of clients whose homes were in foreclosure and then failing to make any effort to pay subsequent sanctions imposed by the court. Those sanctions total more than $300,000, according to Star Tribune calculations.

Schiltz noted that he had assessed $50,000 in a sanction in 2012, plus $29,766.70 in attorney’s fees to defendants, after finding that Butler had engaged in “extraordinarily egregious and brazen” misconduct for filing frivolous lawsuits, which included “brazen delay tactics and judge-shopping” and making “misrepresentations” to the court. The Eighth Circuit affirmed Schiltz’s findings in 2013 and ordered Butler to pay the sanctions.

Butler testified he did not have $80,000 or anywhere near $80,000. “I don’t think there’s any evidence that I’ve ever had $5,000 accumulated,” he said.

But Schiltz said that according to Butler’s personal bank records, as well as three entities — Butler Liberty Law, Liberty Mortgage Research and his church — the attorney had a monthly gross income of more than $64,000 available to pay the sanctions.

Schiltz said that from Aug. 12 to Aug. 20, 2013, while Butler was under a court order to pay the sanctions, he spent $1,502.12 on restaurant meals, liquor and yoga.

In September 2013, “immediately after informing this court that he did not have the resources to pay sanctions, that he had not paid rent on his office for four months, and that his adult son was on food stamps … Butler spent $1,718.46 on restaurants, meals, liquor, yoga, tanning and kettlebell equipment. … In that same month, he spent an additional $488.91 at pet stores and $699.50 at Brooks Brothers for a total of $2,906.87.

“Butler did not pay a single penny of the sanctions despite overwhelming evidence that he could easily have done so,” said Schiltz, noting that Butler had vowed to prospective clients in a video on his website that he “never will pay” the sanctions against him.

Schiltz said, “Butler has openly flouted [the sanctions] — and used his defiance as a marketing tool to attract new clients.”

Besides asking the U.S. attorney’s office to consider opening a criminal investigation, Schiltz asked the prosecutors “to consider whether to use liens, attachments, garnishments or other remedies to collect Butler’s debt to this court.”

Butler did not return a phone call or e-mail request for comment.

He has previously insisted that, despite court rulings, his arguments on the illegality of foreclosures are not frivolous. On his website, he calls for impeachment of the federal judges in Minnesota.

 

Randy Furst • 612-673-4224

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