HILLSBOROUGH -- Three years ago, former Chapel Hill-Carrboro schools attorney John McCormick lost his law license after skipping town under accusations of embezzlement.
But McCormick continues to litigate from inside the walls of the Johnston Correctional Institution in Smithfield. These days, his only client is himself.
In July, McCormick filed a handwritten lawsuit against his former business partner Larry Short. McCormick claims Short used the partnership's money for personal expenses, took extra profit and charged management fees the two had not agreed upon.
McCormick is trying to recover money he claims Short seized as part of the bankruptcy proceedings that helped to unravel McCormick's tenuous double life - as a well-respected lawyer and secret substance abuser. Short argues that the U.S. Bankruptcy Court has already settled the matter.
McCormick has asked Superior Court Judge Marvin Blount for a jury trial on whether Short's actions were "unfair and deceptive trade" practices. McCormick seeks the difference between what Short paid for McCormick's share in a Chapel Hill apartment building and the price Short subsequently sold it for, plus damages.
Two years ago, McCormick, a lawyer who handled real-estate closings in addition to his contract work for the school district, pleaded guilty to five counts of embezzlement. The schools were not victims in the cases. He was sentenced to 10-plus years in prison and is scheduled to go free in 2018.
In July 2006, national homebuilder D.R. Horton Inc. came looking for $800,000 from five home sales McCormick had closed. Horton had noticed problems with McCormick sales and decided to stop using him as a lawyer.
On July 10, a company representative was waiting in the lobby of McCormick's Chapel Hill office when the lawyer slipped out the back door, District Attorney Jim Woodall has said in court.
McCormick stopped at the State Employees Credit Union and made two deposits: $25,000 in an account for one of his children, and $10,000 in an account for another. Then he drove his Subaru to Duke Forest, just north of Chapel Hill, parked the car and set off for a life unknown.
McCormick was not seen again until Aug. 30, 2007, when law officers stopped him in a Phoenix park with little more than change in his pocket. He had been living in a homeless shelter.
In August 2006, McCormick's many creditors forced him into involuntary bankruptcy, liquidating his $7 million estate - including many local real estate holdings - to recover $4.3 million of what he owed them. McCormick was missing and not involved in any negotiations; John Northen, his estate's attorney, handled them.
As part of McCormick's bankruptcy, the disbarred lawyer says Short cheated him out of part of the value of The Warehouse apartment building on West Rosemary Street in downtown Chapel Hill.
In August 2007, a U.S. Bankruptcy judge approved Short's purchase of the apartment building, calling the price fair and reasonable. Northen also filed an affidavit in the Orange County lawsuit saying he was satisfied with the transaction.
McCormick's bankruptcy has dragged on as accountants seek to be paid and Northen continues to sell off property partially owned by McCormick's estate. The delay prompted a Superior Court judge in June to order Horton's claim inactive until federal issues are resolved.
