Sacramento creator of legal advice app gets prison time for lying, defrauding over $500,000
A Sacramento man, who once drew attention for his legal advice app and TV appearance on ABC’s “Shark Tank,” has been sentenced to seven years in federal prison for falsely claiming to be an attorney and defrauding more than $500,000 from a couple, prosecutors announced.
Derek Bluford, 34, was sentenced Thursday for wire fraud, money laundering, obstruction of a federal investigation and making false statements, according to a news release from the U.S. Attorney’s Office in Sacramento. Bluford pleaded guilty to those charges on Dec. 17 as part of an agreement, according to court records.
Bluford founded his company in Sacramento, named it QuickLegal and put out a beta test version in October 2014. QuickLegal, a smartphone app offering initial consultations from lawyers, had won the attention of Silicon Valley investors and major legal services companies by 2016.
And Bluford had already secured about $1 million in outside investments and the appearance on the television show featuring entrepreneurs pitching their ideas. QuickLegal had expanded to allow the program to manage and access documents anywhere, set calendar reminders for courthouse deadlines and hearings, do legal research, track billable hours and much more.
Bluford owned and operated California Legal Pros, along with QuickLegal, according to an indictment filed Jan. 11, 2018, in the U.S. District Court’s Eastern District of California. A couple who owned a rental property in Discovery Bay in Contra Costa County were involved in a dispute with a tenant, so they contacted Bluford.
Federal prosecutors said Bluford told the couple he was an attorney and could legally represent them in the dispute with their tenant.
After the couple agreed, Bluford told them they had incurred numerous fines and court costs, as well as costs to repair their rental unit, according to the U.S. Attorney’s Office. He also told them he had negotiated a settlement agreement with the couple’s tenant.
Prosecutors said the couple had paid Bluford more than $500,000 for his services from February through November 2014. But Bluford was not a lawyer, the prosecutors said, and there were no fines or court costs imposed on the couple.
Bluford told the couple that he paid $130,000 settlement to the tenant to avoid a lawsuit against the couple, but he only paid the tenant $5,000 and used the rest of that money for his own personal expenses, according to the indictment.
Bluford laundered the money from his scheme, obstructed a federal investigation and made false statements to the FBI regarding the investigation, according to the U.S. Attorney’s Office. The filed indictment indicated Bluford’s scheme cost the couple at least $535,000.
The case against Bluford was the result of an investigation by the IRS and the FBI. Assistant U.S. Attorneys Michael D. Anderson and Christopher S. Hales prosecuted the case.
