Thursday, October 12, 2017

"I Can't Explain What I Did. I Know It's Wrong, And I'm Not Doing It Anymore"

The District of Columbia Board on Professional Responsibility recommends an eighteen months with fitness suspension for escrow account and other misconduct

Since 1995, Respondent has practiced law as a sole practitioner, primarily in a field he describes as “securities law.” FF 4. Specifically, Respondent provides advice to clients with public offerings, reports financial transactions for clients, and writes opinion letters for clients. Id. From at least 2004 until the time of the hearing, Respondent did not pay the taxes due on income reported to the IRS. FF 22. The IRS filed tax liens for unpaid assessments of more than $100,000. Id.

In 2011 and thereafter through the hearing, Respondent maintained his trust account and personal accounts with Bank of America. FF 11. Respondent knew that he was not supposed to deposit his own funds in his trust account. FF 23. However, Respondent deposited both personal and business funds (including earned fees and checks from his wife’s employer) into his trust account at a time when it contained entrusted funds. FF 23, 27. Respondent used funds in the trust account to pay both personal and business-related expenses.  FF 23-31; HC Rpt. Attachment. Respondent kept inadequate records for what deposits were made and what expenses were paid. FF 32, 47, 70-80.

In connection with client transactions, Respondent received funds from clients and third-parties, which he deposited into his trust account or one of his personal accounts. FF 33. Respondent generally deposited his client’s funds and then made a payment, as directed by his client, and took a fee for his services. See FF 33, 35, 37-45. Respondent said he is unsure why his clients asked him to perform this service, but he surmised that they believed it added “credibility to the whole transaction.”5 FF 36.

When Respondent deposited cash into his trust account, he, or those acting at his direction, broke the deposits into amounts less than $10,000, in order to avoid the bank’s obligation to file a Currency Transaction Report with the IRS.6 FF 49-57. Respondent kept inadequate records for what deposits were made and by whom, and of what money passed through his trust account. See FF 32, 37, 76- 80; HC Rpt. at 33-34. The Hearing Committee found Respondent’s testimony was deliberately false in a number of respects.

The attorney failed to appreciate the seriousness of the misconduct and the board concluded that he must prove fitness to resume practice

Most significantly, Respondent admitted that he received money from clients and passed it on to others, without determining why his services were being used. FF 35-36. Respondent could not explain why he deposited these funds in his operating or his business account before disbursing them. FF 38. As he testified, “You’re asking me to explain my crazy business practices. I can’t explain why I did what I did. I know it’s wrong, and I’m not doing it anymore, but I can’t tell you why I did it.” Tr. 64. However, Respondent
did not explain what he was currently doing, or what steps he had taken to ensure that he did not violate the Rules in the future. A showing of fitness after his suspension would be able to provide this assurance...

Based on the totality of the evidence presented in this case, the Board finds there is clear and convincing evidence that casts a serious doubt about Respondent’s fitness to practice law ethically and competently in the future, after his period of suspension has run. See Cater, 887 A.2d at 22. We find that imposition of a fitness requirement is the appropriate response to these concerns.

The case is In re William B. Haseltine. (Mike Frisch)

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