Self-Report Leads To Disbarment

An attorney who had self-reported eleven years of trust account violations was nonetheless disbarred by the South Carolina Supreme Court.

Respondent operated a law firm as the principal shareholder for twenty-four years, primarily handling plaintiff’s personal injury cases on a contingency basis. For a period of approximately eleven years, Respondent used funds from his trust account for purposes for which those funds were not intended, including funding other clients’ litigation, cash advances to clients, office operating expenses, payroll, and personal expenses.

Respondent instructed his nonlawyer staff with signatory authority on his trust account to issue checks from that account for purposes for which those funds were not intended.

Respondent failed to properly reconcile his trust account or otherwise maintain records required by Rule 417, SCACR. As a result of inadequate accounting practices, Respondent made numerous mistakes in client transactions resulting in overpayments of attorney’s fees to the firm, overpayments to clients, and bank fees that were not covered by firm funds.

Periodically, Respondent attempted to restore misappropriated funds by leaving earned fees in his trust account, but no regular accounting of those credits was maintained.

As of August 31, 2011, Respondent had approximately $565,806.86 in negative client ledger balances. At the time of his interim suspension, the balance in Respondent’s trust account was $439,042.30.

A Panel had recommended a three-year suspension

While the Panel recognized “disbarment would seem to be the most appropriate sanction,” it recommended a three-year retroactive suspension based in part on the mitigating factors, and in part on its belief that a lesser sanction will provide an incentive for lawyers to self-report.

The court disagreed

Like the Panel, we are moved by the depth and sincerity of Respondent’s remorse and impressed by the level of cooperation he has demonstrated since self-reporting his misconduct. We cannot, however, ignore that in addition to violating Rules 1.8 and 5.3(C)(1), RPC, Rule 407, SCACR, and Rule 417, SCACR, Respondent took money that was not his from his trust account over the course of eleven years. We find disbarment is the appropriate sanction, but order that it be retroactive to the date of Respondent’s interim suspension, September 2, 2011.

(Mike Frisch)