Monday, February 24, 2014

An (Unethical) Gift To Dad

The Illinois Review Board has held that an attorney's conversion of entrusted funds was dishonest.

The circumstances:

The facts in this matter are not in dispute and are  set out in greater detail in the Hearing Board's Report. In summary, in 2010  Respondent represented the seller in a residential real estate transaction. In  October 2010, Respondent received a $1,000 check from the potential buyer to be  held in escrow as earnest money. Respondent took the check with the  understanding that he was to keep the $1,000 in escrow for the benefit of the  buyer and seller. Instead, he gave the check to his father and his father  deposited the check into his father's personal bank account. Respondent did not  maintain a checking account or a client fund account. His father spent the  $1,000, by depositing the check and using the proceeds. Respondent testified  that over time, his father gave Respondent the proceeds and Respondent used the  money for his own business and personal purposes.

Given the undisputed facts, Respondent engaged in  the conversion of the escrow funds. The conversion was knowing, not inadvertent.  Respondent took no steps to segregate the escrow money; he gave the money to his  father. Accordingly, this conversion can be distinguished from those cases cited  by the Hearing Board where the attorneys converted client funds by depositing  the money for safekeeping and later inadvertently, or through sloppy  bookkeeping, used the funds. Cf., In re Timpone, 157 Ill.2d 178, 195, 623  N.E.2d 300 (1993); In re Mulroe, 2011 IL 111378 pars. 22-23. Here,  Respondent knew he was not safekeeping the funds when he gave the check to his  father. We find that, as a matter of law, Respondent's conversion was dishonest, and he violated Rule 8.4(c).

The board recommended as discipline a four-month suspension followed by probation for a year. If the probation is vuiolated, the board would recommend suspension until further court order. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2014/02/the-illinois-review-board-has-held-that-an-attorneys-conversion-of-entrusted-funds-was-dishonest-the-circumstances-the-bo.html

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