Monday, June 15, 2009
A New York attorney formed a corporation for the purpose of bidding on a HUD contract to provide closing agent services on the sales of previously foreclosed properties. The corporation consisted of himself and a non-lawyer, who owned a majority share of the corporation. The lawyer was paid an annual salary and fee for his services as general counsel.
They won the HUD contract and the nonlawyer set up an office in Buffalo.The nonlawyer administered the HUD contract without supervision from the lawyer. The nonlawyer was a joint signatory on the trust account and the closings were attended by nonlawyer employees of the corporation. The lawyer also set up a separate law firm that administered a HUD contract in the same manner.
The lawyer was charged with aiding the unauthorized practice of law. The New York Appellate Division for the Fourth Judicial Department affirmed a referee's finding of misconduct. The services were "routinely performed, were of the character usually performed by lawyers, and were performed pursuant to a contract that required an admitted attorney as a necessary presence."
The court imposed a censure, noting that the complainant was not an unhappy purchaser, but a losing bidder on the contract. The services were performed in a competent manner and the lawyer had a previously unblemished record.
This link will take you to the court's web page. The case is Matter of Garas, filed June 12, 2009. (Mike Frisch)