Tuesday, December 10, 2013
An attorney who used an otherwise dormant escrow account to be used for the benefit of a distressed client was publicly censured by the New York Appellate Division for the First Judicial Department.
The referee concluded in recommending censure
"In contrast to other respondents who have . . . demonstrated themselves to be greedy, dishonest, self-centered and indifferent to the needs of anyone but themselves, I find respondent in the instant matter to be the exact opposite. . . . [A suspension] should be reserved [for] attorneys who have been warned or previously admonished, who take the law to themselves to advantage themselves at the expense of others. . . On the other hand a private reprimand as the respondent suggests merely flies in the face of the notion that the IOLA account is pretty much sacrosanct. Clearly, respondent is an individual of caring and concern and to treat him otherwise would be wrong. It is my recommendation, based on the evidence and documents submitted that an appropriate sanction would be a public censure."
The findings by the court:
In this instance, respondent's misconduct was not the result of a well-orchestrated scheme to shelter substantial funds. Respondent's primary intent in allowing Ms. Cronin access and use of his escrow account was not to help Ms. Cronin evade her creditors. Rather, it was an attempt, albeit misguided, to help Ms. Cronin, who is a single mother suffering substantial financial problems. Common sense supports this conclusion, for if respondent's objective was to hide Ms. Cronin's assets, multiple alternatives were available to him to do so, including the use of any personal account in his own name or another to allow Ms. Cronin to transact her modest affairs. The fact that Ms. Cronin's financial situation was nearly judgment-proof likewise casts doubt on the venality of respondent's state of mind.
While respondent denied knowledge of the tax liens/warrants in the liability hearing, the staff and the Referee relied on circumstantial evidence to refute that denial; namely, that respondent must have known since he was an experienced practitioner in complex legal matters. The Referee made no finding that respondent had actual knowledge of the liens, but inferred that he must have known. The quality of the evidence speaks more to his competence than his intentional effort to conceal, and thus reduces the severity of the offense for sanction purposes.
However, the most important aspects to our conclusion are the undisputed facts that respondent did not maintain any client funds in his IOLA account, did not commingle his funds with those of any client, did not injure any client, and did not personally benefit in any way from assisting Ms. Cronin. We do not consider respondent a threat to the public, and we regard a suspension as unnecessary to protect its interests. A public censure of respondent is sufficient to send a message to the bar on the importance of IOLA conduct.