PayPal Deduction Created Overdraft

A reprimand has been imposed by the New Jersey Supreme Court as recommended by the Disciplinary Review Board.

The matter was initiated by a notice of a $18.90 overdraft on the attorney's trust account

On May 11, 2022, respondent provided the OAE, via e-mail, with his written explanation for the overdraft. Specifically, respondent acknowledged that the overdraft resulted from a $19.99 charge made to his ATA by PayPal Business but asserted that he had not authorized either PayPal to charge his ATA or the bank to pay such electronic charges. He stated that, after he became aware of the charge that caused the overdraft, he immediately closed his PayPal Business account to prevent future charges associated with that account. In addition, he contacted the bank to address its allegedly erroneous payment of the charge.

Moreover, respondent informed the OAE that he had reviewed his ATA bank statements and discovered that PayPal similarly had charged his ATA twice before, in August and November 2021. Addressing why he had failed to detect the prior charges, he stated that he had “no client transactions of any kind in that time period and had no charges of any kind ever scheduled against the Trust account,” and, thus, in his view, “had no reason to review any of those statements when they came in.”

Sanction

On balance, we determine that the aggravating and mitigating factors are in equipoise and, thus, a reprimand remains the appropriate quantum of discipline to protect the public and to preserve confidence in the bar.

As conditions to his discipline, we recommend that respondent be required to: (1) complete a recordkeeping course, pre-approved by the OAE, within sixty days of the Court’s issuance of its disciplinary Order in this case; (2) submit proof to the OAE, within sixty days of the Court’s issuance of a disciplinary Order in this case, that he has corrected the recordkeeping deficiencies identified during its audit; and (3) provide to the OAE monthly reconciliations of his attorney accounts, on a quarterly basis, for a two-year period following the Court’s issuance of a disciplinary Order in this case.

(Mike Frisch)