Friday, October 4, 2013

If I Had a Million Dollars

An attorney accused of stealing over a million dollars from a client has been suspended on an interim basis by the New York Appellate Division for the First Judicial Department.

The attorney has been indicted for the alleged theft.

The court set out the allegations:

In December 2012, respondent's client filed a complaint with the Committee, alleging that respondent had invested $1.8 million of her money without her permission and for his own benefit. Bank documents provided by the client and subpoenaed by the Committee show that between June and October 2009, the client made wire transfers totaling $1.8 million into respondent's firm's attorney escrow account. According to the client, this money was provided in connection with her anticipated purchase of a condominium apartment. Due to unrelated litigation involving the sellers and the condominium, the real estate transaction failed to close. The records also show that immediately after respondent made the last transfer of money to respondent's escrow account, he transferred the entire $1.8 million out of that account to the account of a non party to the real estate transaction. The client alleges that this transfer by respondent was wholly without her knowledge or consent. She contends further that it was only three years later, on October 31, 2012, that she learned about the transfer in a handwritten note by respondent to her admitting that:

"[w]ithout your prior authorization, I have invested $1.8 million of your funds which I have been holding, as a result of which I do not have possession of those funds as of today. In order to resolve this matter, I will return $1.8 million within next two weeks"

In a subsequent letter dated November 18, 2012 to her, respondent stated that he had no means of returning her funds, and that the only way he could repay her was is if he continued to work as a lawyer. He urged her not to pursue any criminal/civil remedies, in essence asking her to "keep the entire matter confidential and private."

Respondent, who is represented by counsel and has answered the complaint, denies he ever acted without his client's knowledge. He states that he was authorized by his client to transfer the funds from his attorney account to the non party's account for investment purposes, though he acknowledges that "due to certain financial failings beyond my control, to date, those Funds have not been returned."

The court noted that the attorney failed to produce any evidence that he acted with the authority of his client.:

Notwithstanding respondent's claim in his answer, that he acted with his client's permission and authority, respondent has failed to produce any records to substantiate that claim and, in any event, the Committee avers that whatever proceeds or profits respondent made and retained from the $1.8 million investment belongs to his client. Although there is no claim by the Committee that respondent is not cooperating with its investigation, respondent has yet to appear for an examination under oath or produce his file. This is partly due to his having suffered an accident, requiring his hospitalization, and subsequent arrest on the grand larceny charges once he was released from the hospital.

(Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2013/10/an-attorney-accused-of-steatling-over-a-million-dollars-from-a-client-has-been-suspended-on-an-interim-basis-by-the-new-york.html

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