Stolen Refund Proceeds Draws Disbarment

Disbarment has been ordered by the Indiana Supreme Court of an attorney previously suspended for failure to cooperate

In January 2005, “Clients” retained Respondent to represent them in their Chapter 13 bankruptcy. In December 2010, the bankruptcy trustee issued a refund check for $8,725.35, payable to Clients. For almost two and one-half years, Respondent did not disclose the existence of this check to Clients. Instead, Respondent fraudulently endorsed and deposited the check into an account that was not his attorney trust account, and thereafter used the proceeds for his own personal purposes. When the trustee’s final report (issued in June 2013) revealed the issuance of the refund check, Clients confronted Respondent, and Respondent promised to repay the amount to Clients. Respondent later issued a check in the amount of $8,725.35, drawn on an account other than his attorney trust account, but Clients were unable to negotiate the check due to insufficient funds in the account. When Clients later retained successor counsel, Respondent refused to return Clients’ file.

Sanction

In recommending disbarment, the hearing officer cited Respondent’s conversion of client funds and the absence of any compelling mitigation. See American Bar Association’s Standards for Imposing Lawyer Sanctions 4.11 (“Disbarment is generally appropriate when a lawyer knowingly converts client property and causes injury or potential injury to a client”). We agree. “Misappropriation of client funds is a grave transgression. It demonstrates a conscious desire to accomplish an unlawful act, denotes a lack of virtually all personal characteristics we deem important to law practice, threatens to bring significant misfortune on the unsuspecting client and severely impugns the integrity of the profession.” Matter of Hill, 655 N.E.2d 343, 345 (Ind. 1995).

The attorney had disciplined on two prior occasions cited in the court ‘s opinion

Matter of Ouellette, 636 N.E.2d 1251 (Ind. 1994) (Respondent suspended for knowingly making false statements of material fact to a tribunal and failing to disclose such facts when disclosure was necessary); Matter of Ouellette, 857 N.E.2d 377 (Ind. 2006) (Respondent suspended for failing to act with reasonable diligence in representing a client, failing to keep the client adequately informed, and failing to timely respond to the Commission’s investigation)

(Mike Frisch)