Wednesday, August 5, 2020

Direct Debit Draws Public Censure

A public censure has been imposed by the New York Appellate Division for the Second Judicial Department

By virtue of the stipulation presented with the joint affirmation, the parties have agreed that the following factual specifications are not in dispute: Between January 1, 2015, and August 2016, the respondent, who practices in the area of collection law, used the services of credit card servicing companies. The respondent permitted one or more of the credit card servicing companies to directly debit their fee from his trust account. The respondent would thereafter transfer funds from his operating account to the trust account to cover the fees of the credit card servicing companies. Inasmuch as there was a delay before the respondent replenished the funds removed by the credit card servicing companies, shortages occurred in the respondent’s trust account. On January 1, 2016, there was a $2,713.11 shortfall in the respondent’s attorney trust account, which he discovered after a check issued from that account was returned. During the period investigated, shortages occurred in the respondent’s trust account for periods ranging between days and months, and resulted in the misappropriation of funds being held for third parties.

Sanction

we find that the respondent’s failure to provide proper oversight and his poor record-keeping practices resulted in the misappropriation of client funds. In view of the respondent’s admitted misconduct as well as the aggravating and mitigating factors presented herein, we conclude that the joint motion for discipline on consent pursuant to 22 NYCRR 1240.8(a)(5) should be granted, and that a public censure is warranted.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2020/08/a-public-censure-has-been-imposed-by-the-new-york-appellate-division-for-the-second-judicial-department-by-virtue-of-the-sti.html

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