Thursday, July 17, 2014

Attorney Suspended Based On Deposition Concessions

An attorney facing charges that he diverted fees due to his firm has been suspended on an interim basis by the New York Appellate Division for the First Judicial Department.

The suspension was based on his admissions in the bar proceedings

At his September 25, 2013 deposition before the Committee, respondent, who was represented by counsel, admitted that between 2010 and 2011 he diverted approximately 10 payments (via checks) totaling approximately $83,000 made by a client, which were intended as payments of legal fees to his law firm in connection with a zoning matter respondent had been handling for the client. Rather than remit the funds to his firm, respondent used the funds for his own personal purposes, mostly for expenses related to his Parkinson's disease. Respondent also admitted that he failed to declare the $83,000 as taxable income because he considered it to be more in the "nature of a loan" which he intended to pay back.

Respondent's firm was unaware that the client had paid respondent directly, and in May 2012 the firm filed a motion asking to withdraw as attorney of record in another matter it was handling for the client in light of his total unpaid balance for legal fees and disbursements. The firm only learned of the client's payments to respondent in July 2012 after the client had commenced an action against respondent and the firm for, inter alia, legal malpractice, at which time the firm confronted respondent. Shortly thereafter, respondent left the firm and self-reported his diversion of legal fees to the Committee. In December 2012, respondent reimbursed the firm in full.

The attorney contended that interim suspension should not be imposed

Respondent acknowledges the seriousness of his conduct, but urges this Court not to impose an interim suspension because he contends that he does not pose an immediate threat to the public interest. In support of this argument, he recounts that: (1) he made full repayment to his law firm; (2) he self-reported his conduct to the Committee; (3) he is 76 years old, suffers from Parkinson's disease, and has a limited practice with only two active clients; (4) he does not intend to take on new clients; and (5) he will continue to cooperate with the Committee and will appear for a hearing once formal charges are filed. In addition, respondent argues that this Court has declined to impose interim suspensions in similar, and even more serious, matters. Respondent further contends that the majority of interim suspensions imposed by this Court have been in instances in which attorneys failed to cooperate with Committee investigations, which is not the case here, or where the conduct was flagrant and ongoing. Respondent has also submitted two character references and a letter from his psychotherapist who opines that she believes "the circumstances that took place ([respondent's] Parkinson's combined with the economic stress) sorely affected [his] judgment", respondent is not "a threat to society", nor "would [he] do anything to harm the public or a client."

The court rejected these contentions. (Mike Frisch)

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