Thursday, August 5, 2010

After The Flood

The New York Appellate Division for the Second Judicial Department has suspended an attorney for two years for failure to properly maintain his escrow account and lack of candor with disciplinary counsel. The court was not persuaded that the mitigation was sufficient to warrant any lesser sanction:

In determining an appropriate measure of discipline to impose, the respondent asks the Court to consider his unblemished reputation and the fact that a public sanction would ruin his livelihood of representing lenders, including many mainstream banks. He accepts responsibility for what he terms two human errors. In addition to the testimony of his paralegal/secretary with respect to the devastating effects of the January 2007 flood in the respondent's law office, as well as her affidavit of good character, the respondent submitted character affidavits from his rabbi and two fellow attorneys.

Notwithstanding the respondent's efforts to minimize his record-keeping deficiencies and his attempt to shift the burden to the Grievance Committee to establish some linkage between his two accounts, it bears noting that the respondent's escrow accounts had deviations well before his purported mistakes and the devastating flood. His use of funds on deposit in a second escrow account to pay off liabilities from the IOLA account constituted an invasion of clients' funds and a clear failure to preserve funds entrusted to him. Moreover, the respondent initially was less than candid in his explanation to the Grievance Committee.

The respondent's failure to abide by the rules governing fiduciary responsibilities and the proper maintenance of escrow accounts, coupled with his lack of candor, warrants his suspension from the practice of law for a period of two years.

The Special Referee had found that the escrow violations were technical in nature and involved "sloppy bookkeeping" without venal intent. (Mike Frisch)

Bar Discipline & Process | Permalink

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