Tuesday, July 6, 2010
An attorney found to have violated 24 ethics rules stemming from his partnership with a non-lawyer that engaged in the practice of law and fee-splitting with his partner was suspended for three years by the New York Appellate Division for the Second Judicial Department. The partnership conducted real estate transactions on behalf of lenders under the title of Expedient Settlement.
The court discussed the factors that resulted in a sanction:
In mitigation, the respondent emphasizes that he did not act with fraudulent intent, no client was harmed, he never took anyone's money, and he never utilized anyone's money. He cooperated fully with Grievance Committee in its investigation, which lasted more than four years, and testified candidly at all his appearances.
The Grievance Committee notes that the respondent has a disciplinary history consisting of two Letters of Caution. A September 30, 2005, letter cautioned the respondent for failing to maintain his attorney registration. A January 5, 2007, letter cautioned the respondent for neglecting a legal matter entrusted to him by failing to appear in court on two occasions, failing to respond to a motion to dismiss, which resulted in a dismissal of the case, and submitting an unsigned and unverified bill of particulars in the case.
Notwithstanding the Special Referee's finding that the respondent "did not profit or apparently intend to profit," we conclude that the respondent did profit in the sense that he would not have been able to handle the tremendous volume of business he did, but for his use, or more accurately abuse, of his attorney trust account. By using his attorney trust account and law office stationery in his "settlement business," the respondent imbued his business with an aura of trust, ordinarily afforded to attorneys by New York banks, who are accustomed to attorneys handling real estate closings. In so doing, the respondent was able to expedite closings, gain an advantage over his competitors, and garner more business. The respondent's improper use of his attorney trust account was part of an ongoing operation and not an isolated occurrence. Further, the respondent was no novice, as he had been practicing law for some 10 years when he formed Expedient Title and Expedient Settlement. He was well aware, as he admitted, that an attorney trust account is a highly regulated account.