“A Troubling Situation”

The New York Appellate Division for the First Judicial Department agreed with the Departmental Disciplinary Committee that an interim suspension be imposed on an attorney. The attorney had previously been suspended for three years and was reinstated.  The present matter was initiated by a report from an attorney employee alleging trust-account irregularities. The court reasoned:

We conclude that respondent’s commingling of funds in his IOLA account in order to hide his income from tax authorities, his failure to maintain adequate bookkeeping records, and his financing arrangements with lending corporations to keep his apparently insolvent law practice afloat creates a troubling situation which puts his clients’ funds at risk and thus immediately threatens the public interest warranting an interim suspension. Moreover, a closer review of respondent’s bank records raises additional questions. The bank records show that from December 2007 to February 2009, respondent never wrote a check to any tax authorities notwithstanding repayment agreements he allegedly has with them. While respondent avers that he had a net loss for 2008, during the aforementioned 15-month time period (Dec. 2007 – Feb. 2009), it appears that he took in approximately $450,000 in legal fees, apparently tax free.

Accordingly, the Committee’s motion should be granted and respondent should be found guilty of professional misconduct immediately threatening the public interest and be suspended from the practice of law effective immediately, until such time as disciplinary matters pending before the Committee have been concluded, and until further order of this Court.

(Mike Frisch)