Saturday, December 20, 2008
The California Bar Journal reports that an attorney was disbarred for creating an escrow account in his nephew's name in order to shield assets from creditors:
The State Bar Court found that Winrow commingled personal funds in his client trust account and committed an act of moral turpitude by creating a client trust account for the purpose of concealing personal assets from creditors.
He opened a trust account in 2004 in the name of his adult nephew, but admitted it never held any client funds and was meant to be used as his personal and business bank account. He regularly deposited and withdrew personal funds from the account, issued checks to pay for stamps, utilities, auto expenses, the cleaners, phone bills and books. In addition, the account often was overdrawn.
The court rejected Winrow's contention that because he was a banker before becoming an attorney, he believes he had the right to call the account a client trust account but use it as a personal account to protect his assets and to prevent creditors from filing a lien. He also argued that because no client funds were on deposit, no commingling occurred. He told the bar court the account was a different kind of trust account for his nephew's benefit and that he was acting as a trustee for the trust.
Winrow was disciplined three times previously. In 2001, he was suspended for failing to perform services competently, return client files, refund client fees and communicate with clients in two matters and for the unauthorized practice of law. He was later admitted and terminated from the Alternative Discipline Program for lawyers with substance abuse or mental health problems and was disciplined again in 2006 for misconduct in three client matters.
After a conviction in Santa Clara County for unauthorized legal practice, Winrow was disciplined again in 2007.
In recommending his disbarment, Judge Lucy Armendariz said that Winrow "has engaged in a continuous course of misconduct in the past nine years involving more than five client matters, probation violations, conviction for unauthorized practice of law and trust accounting violations. In fact, he has been on probation for a period of seven years during his 17 years as an attorney."
She added that disbarment is appropriate when an attorney "repeatedly demonstrates indifference to successive disciplinary orders of the Supreme Court."
The legal question as to whether it is commingling when there are no client funds in an account is interesting. Based on the other misconduct found and the prior discipline, the resolution of the commingling issue would likely have no impact on the sanction. (Mike Frisch)