In re: Attorney Admissions

UNITED STATES DISTRICT AND BANKRUPTCY COURTS
SOUTHERN DISTRICT OF TEXAS
IN RE: §
§
§
KAREN PATRICIA KISCH CASE NO. 4:20-MC-568
MEMORANDUM OPINION
Karen Kisch brought a motion to stay a 90-day suspension order pending appeal, but she
failed to meet her burden of proof. On August 28, 2025, the Western District of Louisiana
Bankruptcy Court ordered that Karen Kisch be suspended from practicing law in the Western
District of Louisiana Bankruptcy Court for 90 days.1 On September 29, 2025, this Court entered a
reciprocal order prohibiting Karen Kisch from practicing in the Southern District of Texas for 90
days.2 Karen Kisch timely filed a motion for modification which caused this Court to stay its order
suspending Karen Kisch from practicing in the Southern District of Texas.3 But Karen Kisch failed
to show that the evidence against her was so clearly lacking or that it would result in a grave
injustice for identical discipline to be imposed in the Southern District of Texas that her suspension
in the Southern District of Texas should continue to be stayed pending appeal. Thus, this Court
will lift the stay it imposed pending the outcome of this hearing and Karen Kisch will be suspended
from practicing in the Southern District of Texas from December 11, 2025, until March 11, 2026.
I. FINDINGS OF FACT
This Court makes the following findings of fact and conclusions of law pursuant to Federal
Rule of Civil Procedure 52. To the extent that any finding of fact constitutes a conclusion of law,
it is adopted as such. To the extent that any conclusion of law constitutes a finding of fact, it is
1 ECF No. 25, Ex. 1, at 120.
2 ECF No. 14.
3 ECF No. 19.
United States District Court
Southern District of Texas
ENTERED
December 11, 2025
Nathan Ochsner, Clerk
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adopted as such. This Court made certain oral findings and conclusions on the record. This
Memorandum Opinion supplements those findings and conclusions. If there is an inconsistency,
this Memorandum Opinion controls.
A. Background
1. In 2012, Steven Nahas (“Mr. Nahas”) formed a loan modification business called NVA
Financial Services, LLC (“NVA”).4 NVA told clients that they were being represented by
NVA attorneys, but in reality, NVA referred the clients to bankruptcy petition preparers.5
2. In 2017, an attorney named Karen Patricia Kisch (“Ms. Kisch”), who was known as Karen
Kealy before her marriage, began working with Steven Nahas and NVA.6 Ms. Kisch gave
Mr. Nahas access to her LawPay account, which Mr. Nahas used to withdraw fees from
clients’ bank accounts.7 Ms. Kisch then withdrew her compensation from the LawPay
account, which was 10% of the revenue received from clients plus a weekly $1,500 fee.8
3. On August 6, 2019, George Martin (“Mr. Martin”) filed a chapter 13 case in the Western
District of Louisiana Bankruptcy Court.9 In this case, the debtor Mr. Martin alleged NVA
withdrew legal fees from his bank account over an extended period, but NVA did not do
any actual legal work other than preparing a bankruptcy petition for him to file.10
4. On August 28, 2025, in In re George Martin v. Karen Kealy, the Western District of
Louisiana Bankruptcy Court entered an order suspending Ms. Kisch from practicing law
in the Western District of Louisiana Bankruptcy Court for 90 days (“the Underlying
Disciplinary Action”).11
5. On September 19, 2025, this Court issued a reciprocal Order suspending (“Order of
Suspension”) Ms. Kisch from practicing in the Southern District of Texas for 90 days.12
6. On October 18, 2025, Ms. Kisch timely filed her “Motion For Modification And Stay Of
90-Day Suspension Order” (“Motion for Stay”).13
7. On October 20, 2025, this Court issued its “Order And Notice Of Deficiency”14 requiring
Ms. Kisch to supplement her Motion for Stay to identify all cases currently pending in the
4 ECF No. 25, Ex. 1, at 12-13.
5 See ECF No. 25, Ex. 1, at 16-17, 79.
6 ECF No. 25, at 13-14.
7 ECF No. 25, Ex. 1, at 13-14.
8 ECF No. 25, Ex. 1, at 13-14.
9 ECF No. 25, Ex. 1, at 15.
10 ECF No. 25, Ex. 1, at 16-20.
11 ECF No. 25, Ex. 1, at 120.
12 ECF No. 14.
13 ECF No. 15.
14 ECF No. 16.
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Southern District of Texas and include the clients’ names in each matter and file such list
with the Clerk of Court.
8. On October 22, 2025, Ms. Kisch timely filed her “List Of Active Cases.”15
9. On November 24, 2025, the Court held an evidentiary hearing and now issues the instant
Memorandum Opinion.
10. On December 1, 2025, Ms. Kisch filed her “Brief In Support Of Motion For Modification
Of 90-Day Suspension Order.”16
II. ANALYSIS
A. The underlying disciplinary memorandum opinion
In the Underlying Disciplinary Action, United States Bankruptcy Judge Stephen D.
Wheelis (“Judge Wheelis”) found that:
Ms. Kisch’s lack of candor . . . is appallingly unethical. Ms. Kisch has exhibited a
repeated nationwide pattern of hiding her involvement in pro se cases starting in
2016, skirting ethical obligations to clients, being discovered, and after
disgorgement of de minimis sums imposed by courts in individual cases,
reappearing in new venues to perpetuate the foreclosure defense scheme. The Court
finds her repeated disregard for the ethical and professional obligation to
homeowner clients in need of meaningful legal counseling in their most stressful
moments has been motivated by sheer greed. The Court finds more than sufficient
cause exists under § 329(b) to bar her to the extent it can from enjoying the fruits
of egregious and unethical conduct. In re Soulisak, 227 B.R. 77, 82 (Bankr. E.D.
Va. 1998). Ms. Kisch is ordered to disgorge the $110.00 - ten percent fee she
received from Mr. Martin and pay same to the Chapter 13 Trustee in Case No. 19-
31260 within 30 days. Further, this Court will make a disciplinary referral to the
State Bar of Texas and the Chief Judge of the Southern District of Texas.17
The court then suspended Ms. Kisch from practice in the U.S. Bankruptcy Court for the Western
District of Louisiana for a period of 90 days.18 The final judgment entered by Judge Wheelis as it
pertains to Ms. Kisch can be summarized as follows:
1. Pursuant to 11 U.S.C. § 110(1), [Ms. Kisch] violated § 110(b)(l), § 110(b)(2), §
110(c)(2)(A), § 110(c)(2)(B), § 110(e)(2)(B) and § 110(h)(3)(B), these six violations result
15 ECF No. 17.
16 ECF No. 28.
17 ECF No. 25, Ex. 1, at 58.
18 ECF No. 25, Ex. 1, at 120.
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in a fine of $500 for each violation for a total of $3,000 for such violations, and the court
having found cause to triple such fine under § 110(1)(2), Ms. Kisch was fined $9,000.00;
2. Pursuant to 11 U.S.C. §110 (i)(l)(B), the court having found the conduct of [Ms. Kisch]
fraudulent, unfair and deceptive, pursuant to §110 (i)(l)(B), [Ms. Kisch] shall pay to the
Debtor, Mr. Martin, $2,000.00;
3. Pursuant to 11 U.S.C. § 110 (i)(1)(C), the court having found the conduct of [Ms. Kisch]
fraudulent, unfair and deceptive, pursuant to § 110 (i)(l)(B), [Ms. Kisch] shall pay to the
Debtor, Mr. Martin, $11,000.00;
4. Pursuant to § 110(j)(2)(A), the court granted injunctive relief prohibiting Ms. Kisch from
acting as a petition preparer or providing bankruptcy services to an individual who could
file a bankruptcy case in the Western District of Louisiana;
5. Pursuant to 11 U.S.C § 528(a)(l), § 528(a)(2), and § 528(b)(2), pursuant to § 526(c)(l), any
and all purported Agreements or contracts between [Ms. Kisch] and Mr. Martin are
declared null and unenforceable by any person other than Mr. Martin;
6. Pursuant to 11 U.S.C. § 526(a)(3)(A); § 526(a)(3)(B); § 526(c)(2)(A); § 526(c)(2)(B); §
526(c)(2)(C); § 528(a)(l); § 528(a)(2); and § 528(b)(2), pursuant to 11 U.S.C. § 526(c)(2),
the court awards damages against [Ms. Kisch] in the amount of $8,000.00, above and
beyond any other fines, damages or amounts disgorged;
7. Pursuant to 11 U.S.C. § 526(c)(5), the court imposes civil penalty of $372,000.00;
8. Pursuant to 11 U.S.C. § 329, Ms. Kisch was ordered to disgorge $110.00 in fees, both to
be paid to the Chapter 13 Trustee for the estate of the related bankruptcy case.19
B. The Motion for Modification
In her Motion for Stay, Ms. Kisch states that she and her counsel strongly believe there is
a likelihood that the suspension order in the Underlying Disciplinary Action will be reversed
because there is no evidence Ms. Kisch was aware of the wrongful conduct of her co-defendants
and there is no evidence she personally engaged in wrongful conduct.20 Ms. Kish states that she is
merely guilty by association because there is nothing in the evidence or the memorandum opinion
from the underlying case demonstrating that Ms. Kisch knew of her co-defendants’ wrongful
19 ECF No. 25, Ex. 1, at 117-22.
20 ECF No. 15, at 2.
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conduct or how she engaged in wrongful conduct herself.21 By her Motion for Stay, Ms. Kish is
seeking a stay of this Court’s Order of Suspension pending the outcome of an appeal of the
Underlying Disciplinary Action.22
C. Rule 5 of the Rules of Discipline United States District Court Southern District of Texas
(Effective September 15, 2025), Appendix A
Rule 5(D) of the Rules of Discipline United States District Court Southern District of Texas
(Effective September 15, 2025), Appendix A (“Rule”), states that discipline shall be imposed23
unless Ms. Kisch establishes that:
(i) the procedure followed in the United States Bankruptcy Court for the Western
District of Louisiana, Monroe Division, deprived Ms. Kisch of due process;
(ii) the proof was so clearly lacking that this Court should not accept the final conclusion
of the United States Bankruptcy Court for the Western District of Louisiana, Monroe
Division;
(iii) the imposition of the identical discipline would result in a grave injustice;
(iv) the misconduct established by the United States Bankruptcy Court for the Western
District of Louisiana, Monroe Division, warrants substantially different discipline in
this court, or;
(v) the misconduct for which Ms. Kisch was disciplined in the United States Bankruptcy
Court for the Western District of Louisiana, Monroe Division, does not constitute
professional misconduct in this State or in this court.24
Ms. Kisch elected to proceed under Paragraphs (ii) and (iii).25 Thus, the Court will next
consider the evidence presented in support of Paragraph (ii).
D. Whether, under Paragraph (ii), the proof was so clearly lacking that this Court should
not accept the final conclusion of the United States Bankruptcy Court for the Western
District of Louisiana
21 ECF No. 15, at 2.
22 ECF No. 15, at 6-10.
23 Rules of Discipline United States District Court Southern District of Texas (Effective September 15, 2025),
Appendix A, Rule 5(D).
24 Id.
25 ECF No. 21.
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Ms. Kisch has failed to show that the proof was so clearly lacking that this Court should
not accept the final conclusion of the United States Bankruptcy Court for the Western District of
Louisiana. Under Rule 5(D)(ii), discipline shall be imposed against an attorney suspended by
another United States federal court unless the attorney establishes that the proof was so clearly
lacking that the Southern District of Texas should not accept the final conclusion of the suspending
court.26
Here, Ms. Kisch argues that “there is nothing in the evidence or the memorandum opinion
from the [Underlying Disciplinary Action] that demonstrates that Ms. Kisch knew of her co-
defendants’ wrongful conduct or how she engaged in wrongful conduct herself.”27 Instead, she
argues, “the real culprits in the Underlying Disciplinary Action are Ms. Kisch’s co-defendants,
NVA Financial Services, LLC and its founder, Steven Nahas.”28 Ms. Kisch stated that Mr. Nahas’s
“modus operandi was kept a secret from Ms. Kisch during her association with them.”29
But the Underlying Disciplinary Action opinion notes multiple cases where Ms. Kisch
acted as a bankruptcy petition preparer while being a licensed attorney prior to her association with
NVA.30 In 2016, in a pro se case styled as In re Alsworth, Ms. Kisch acted as a petition preparer
through an entity called Petition Prep, LLC, while she was a licensed attorney. 31 The U.S. Trustee
filed a motion pursuant to 11 U.S.C. § 329 to examine transactions with the debtor, alleging Ms.
Kisch did not disclose that she was an attorney, and Ms. Kisch ultimately agreed to disgorge
$200.32 This case shows that Ms. Kisch was acting as a petition preparer while licensed as an
26 Rules of Discipline United States District Court Southern District of Texas (Effective September 15, 2025),
Appendix A, Rule 5(D).
27 ECF No. 28, at 17.
28 ECF No. 28, at 17.
29 ECF No. 28, at 17.
30 ECF No. 25, Ex. 1, at 53-54.
31 ECF No. 25, Ex. 1, at 53-54.
32 ECF No. 25, Ex. 1, at 53-54.
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attorney even before she started working with NVA in 2017. This further indicates that Ms. Kisch
would have known Mr. Nahas was referring clients to petition preparers33 because she was familiar
with these tactics, having engaged in them herself.34 Ms. Kisch denies that her actions in In re
Alsworth show that she knew about Mr. Nahas’s link to petition preparers but offers no evidence
to support that contention.35 Thus, Ms. Kisch has not shown that the proof is so clearly lacking that
this Court should not accept the final conclusion of the Western District of Louisiana Bankruptcy
Court.
Also in 2016, Ms. Kisch was listed as a petition preparer in a pro se case styled as In re
Cheers.36 In In re Cheers, the debtor was ineligible for bankruptcy because of her bankruptcy filing
history.37 Despite the debtor’s ineligibility, a bankruptcy petition was filed on which Ms. Kisch, a
licensed attorney, was listed as the petition preparer.38 This supports the conclusion that Ms. Kisch
was preparing bankruptcy petitions just to gain time to bill the debtor, which is consistent with Mr.
Nahas’s actions in In re George Martin, where he billed Mr. Martin without providing any actual
legal assistance.39 Therefore, the evidence indicates Ms. Kisch should have known that Mr. Nahas
billed clients without doing any legal work because she appears to have also billed clients without
doing any meaningful legal work in In re Cheers. Ms. Kisch denies that her actions in In re Cheers
indicate that she knew what Mr. Nahas was doing but she offers no evidence to support that
contention.40 Thus, Ms. Kisch has not shown that the proof is so clearly lacking that this Court
should not accept the final conclusion of the Western District of Louisiana Bankruptcy Court.
33 See ECF No. 25, Ex. 1, at 16-17, 79.
34 ECF No. 25, Ex. 1, at 53-54.
35 ECF No. 28, at 4-5.
36 ECF No. 25, Ex. 1, at 54.
37 ECF No. 25, Ex. 1, at 54.
38 ECF No. 25, Ex. 1, at 54.
39 ECF No. 25, Ex. 1, at 54.
40 ECF No. 28, at 4-5.
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In 2018, Ms. Kisch had to disgorge fees in a bankruptcy case styled as In re James C.
Fuller,41 in which she was a co-defendant with ND Processing, a Nahas entity.42 The U.S. Trustee
filed a complaint against Ms. Kisch and ND Processing, among other defendants.43 This complaint
was served on “Kealy Law Center” and it detailed how Mr. Nahas operated by referring clients to
bankruptcy petition preparers and charging the clients for legal work that ND Processing did not
do.44 This demonstrates that Ms. Kisch was made aware that Mr. Nahas was referring clients to
petition preparers because Ms. Kisch’s law firm was served with a copy of the complaint detailing
Mr. Nahas’s actions.45 Furthermore, this case took place in 2018, demonstrating that Ms. Kisch
would have known about Mr. Nahas’s actions prior to In re George Martin, the subject of the
Underlying Disciplinary Action. Ms. Kisch claims she was never served in In re James C. Fuller
and doesn’t know who “Kealy Legal Center” is.46 But here again, Ms. Kisch simply denies the
allegations and fails to provide any evidence to support her contentions.47 Thus, Ms. Kisch has not
shown that the proof is so clearly lacking that this Court should not accept the final conclusion of
the Western District of Louisiana Bankruptcy Court.
Ms. Kisch also argues the Western District of Louisiana Bankruptcy Court did not have
the authority to suspend Ms. Kisch because Ms. Kisch was not admitted to practice in the Western
District of Louisiana.48 Local Rule 83.2.10(B)(2) in the Western District of Louisiana provides
that the District Court can suspend attorneys admitted to practice in the Western District of
41 ECF No. 25, Ex. 1, at 56-57.
42 ECF No. 25, Ex. 1, at 56-57.
43 ECF No. 25, Ex. 1, at 56-57.
44 ECF No. 25, Ex. 1, at 56-57, 97-98.
45 ECF No. 25, Ex. 1, at 56-57.
46 ECF No. 28, at 4-6.
47 ECF No. 28, at 4-6.
48 ECF No. 28, at 2-4.
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Louisiana for misconduct. Additionally, the Fifth Circuit has held, “it is beyond dispute that a
federal court may suspend or dismiss an attorney as an exercise of the court's inherent powers.”49
Here, Ms. Kisch gave Mr. Nahas access to her LawPay account, which enabled Mr. Nahas
to charge Mr. Martin for legal services NVA never provided.50 Ms. Kisch, therefore, facilitated
Mr. Nahas’s misconduct which took place in the Western District of Louisiana. Ms. Kisch argues
that Local Rule 83.2.10(b)(2) only provides that the court can suspend an attorney “admitted to
practice before [it],” and Ms. Kisch is not admitted to the district.51 Ms. Kisch further argues that
the court did not cite to any other authority for the proposition that it could suspend Ms. Kisch.52
But federal courts have the inherent power to sanction attorneys for misconduct, and local rules do
not limit that power.53 Thus, the Western District of Louisiana Bankruptcy Court had the inherent
authority to sanction Ms. Kisch for her misconduct. Therefore, Ms. Kisch has not shown that the
proof is so clearly lacking that this Court should not accept the final conclusion of the Western
District of Louisiana Bankruptcy Court.
E. Whether, under Paragraph (iii), the imposition of identical discipline would result in a
grave injustice
Under Rule 5(D)(iii), discipline shall be imposed by the Southern District of Texas
Bankruptcy Court against an attorney suspended by another United States federal court unless the
49 Resolution Trust Corp. v. Bright¸ 6 F.3d 336, 340 (5th Cir. 1993); In re Whitley, 737 F.3d 980, 987 (5th Cir. 2013)
(citing 11 U.S.C. § 105).
50 ECF No. 25, Ex. 1, at 13-14, 91-92.
51 ECF No. 28, at 2-4.
52 ECF No. 28, at 3.
53 Resolution Trust Corp., 6 F.3d at 340; see also In re Cruz, No. 18-10208, 2020 WL 5083326, at *35 (Bankr. S.D.
Tex. Aug. 27, 2020) (finding that “[c]ourts may rely on 11 U.S.C. § 105(a) to sanction improper conduct . . .
[t]herefore, bankruptcy courts have broad leeway in determining an appropriate sanction for unethical behavior”); see
also In re Zuniga, 332 B.R. 760, 775 (Bankr. S.D. Tex. 2005) (finding that local rules regarding sanctions “do not
limit the judges’ inherent powers over lawyers who practice before them”); see also In re Cash Media Sys., Inc., 326
B.R. 655, 671 (Bankr. S.D. Tex. 2005) (the Southern District of Texas Bankruptcy Court sanctioned a lawyer not
licensed in the Southern District of Texas for misconduct); see also In re Dreamplay, 534 B.R. 106, 120-21 (Bankr.
D. Md. 2015) (finding that an out-of-state lawyer not admitted in the District of Maryland could be sanctioned for his
misconduct that occurred in the District of Maryland).
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attorney shows that it would result in a grave injustice for identical discipline to be imposed in the
Southern District of Texas.54 Here, Ms. Kisch failed to present any evidence showing that the
imposition of discipline identical to that imposed by the Western District of Louisiana Bankruptcy
Court would result in a grave injustice. Therefore, a 90-day suspension shall be imposed upon Ms.
Kisch in the Southern District of Texas because it is identical to the discipline imposed by the
Western District of Louisiana Bankruptcy Court and Ms. Kisch failed to show why it would be a
grave injustice.
Thus, Ms. Kisch brought a motion to stay a 90-day suspension order pending appeal, but
she failed to meet her burden of proof. On August 28, 2025, the Western District of Louisiana
Bankruptcy Court ordered that Karen Kisch be suspended from practicing law in the Western
District of Louisiana Bankruptcy Court for 90 days.55 On September 29, 2025, this Court entered
a reciprocal order prohibiting Ms. Kisch from practicing in the Southern District of Texas for 90
days.56 Ms. Kisch timely filed a motion for modification which caused this Court to stay its order
suspending Ms. Kisch from practicing in the Southern District of Texas.57 But Ms. Kisch failed to
show that the evidence against her was so clearly lacking that her suspension in the Southern
District of Texas should continue to be stayed pending appeal or that it would result in a grave
injustice for identical discipline to be imposed in the Southern District of Texas. Thus, this Court
will lift the stay it imposed pending the outcome of this hearing and Ms. Kisch will be suspended
from practicing in the Southern District of Texas from December 11, 2025, until March 11, 2026.
III. CONCLUSION
54 Rules of Discipline United States District Court Southern District of Texas (Effective September 15, 2025),
Appendix A, Rule 5(D)(iii).
55 ECF No. 25, Ex. 1, at 120.
56 ECF No. 14.
57 ECF No. 19.
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An order consistent with this Memorandum Opinion will be entered on the docket
simultaneously herewith.
SIGNED December 11, 2025
________________________________
Eduardo V. Rodriguez
Chief United States Bankruptcy Judge
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