Thursday, April 17, 2014
A name partner in a law firm was suspended for a year and until further order by the New York Appellate Division for the Second Judicial Department for misconduct in the operation of the firm's escrow account.
The respondent and his spouse...were the named partners in the law firm. They were also authorized signatories for the law firm's attorney escrow account, maintained at HSBC Bank and identified as a "Mortgage Closing Account." Between February 2, 2008 and August 28, 2008, eight disbursements from the Mortgage Closing Account created or increased a negative balance of funds therein.
The sanctioned partner's role in the problem
In determining an appropriate measure of discipline to impose, we are mindful that the respondent was no longer an active participant in the law firm at the time of the underlying events, and was not directly involved in the subject defalcations. However, the respondent remained a named partner of the law firm, and an authorized signatory for the law firm's Mortgage Closing Account, with attendant fiduciary obligations. Despite significant losses incurred by one or more of the clients of the law firm, there has been no effort on the part of the respondent to make restitution to those clients. The respondent's prior disciplinary history consists of three Letters of Caution.
The spouse resigned from practice and went to prison. (Mike Frisch)