Lawyer Disbarred; Referee Just Dissed
The Florida Supreme Court disbarred an attorney
As discussed below, after having considered the referee’s report, the record in this case, the parties’ briefs, and oral arguments, we approve in part the referee’s findings of fact. However, we additionally find that Alters engaged in dishonest and deceitful conduct by using one client’s funds to pay obligations owed to another client. Therefore, we approve in part and disapprove in part the referee’s recommendations as to guilt, and find Alters guilty of two additional rule violations. We also approve the referee’s findings in aggravation, and approve in part the findings in mitigation.
However, we find that two of the referee’s findings in mitigation are unsupported by the record, and disapprove those findings. Last, we disapprove the referee’s recommendations as to discipline and costs. We instead disbar Alters and award The Florida Bar its costs, as set forth below. We also direct that no further proceedings in this case shall be held before Circuit Judge Marcia B. Caballero as referee.
Harsh words for the “scant” referee report recommending no sanction at all
Before addressing the referee’s challenged recommendations as to guilt, we note that the referee’s report in this case is inadequate. We do not question that the referee put significant time and effort into preparing the report, particularly in summarizing the testimony of each of the witnesses at the final hearing. However, the referee has drawn only the most basic conclusions from the summarized testimony, and oftentimes has failed to make any findings regarding undisputed evidence in the case. This fails to comply with the basic requirements for the contents of the referee’s report contained in the Rules Regulating the Florida Bar. See R. Regulating Fla. Bar 3-7.6(m)(1)(A) (stating that a referee’s report shall include “a finding of fact as to each item of misconduct of which the respondent is charged”). In all, the referee’s findings of fact span less than four pages of the 71- page, mostly single-spaced report. It is inconceivable that the facts of such a complicated case, which has taken years to litigate and the record of which spans thousands of pages, could be reduced to four pages. Thus, we find the referee’s findings of fact to be incomplete.
Oh how I wish that the District of Columbia Court Court of Appeals had expressed such sentiments in a recent decision.
There was dishonesty and mishandling of entrusted funds
the referee specifically found that Alters failed to notify any other partners at the firm or the Bar after he discovered several of the improper transfers. While Alters attempts to blame his former managing partner and the firm’s comptroller for the trust account deficit, the record demonstrates, and the referee’s limited factual findings confirm, that he ultimately turned over responsibility to the former managing partner at a time he knew the firm was experiencing severe financial difficulties. He subsequently left her in charge of the trust account. Alters neither hired an outside consultant nor reported the trust account issues to the Bar, even after learning of the trust account shortages and being advised by counsel of measures the firm needed to implement to prevent future improper transfers. As a result of Alters’ choices, and the knowledge he possessed at the time he made those choices, we find that he ultimately bears responsibility for the improper transfers and misappropriation of client funds.
The referee found no dishonest motive
we disapprove the referee’s finding in mitigation of absence of a dishonest or selfish motive pursuant to Standard 9.32(b). Alters acknowledges that he knew of the existence of improper trust account transfers since February 9, 2010. The record demonstrates that Alters, despite knowing of the improper transfers, failed to actively manage the trust account or implement proper accounting procedures to ensure that client property held in trust was not improperly transferred to the firm’s operating account. Instead, through the improper transfers, Alters replenished the firm’s operating account and kept the firm afloat despite severe financial troubles. The record also demonstrates that during this time, and for a year after he became aware of the improper transfers, Alters also received substantial amounts of money from the firm and deposited it into his personal bank account—in the amount of over $1,000,000 from February 2010 to February 2011 alone.
Evidentiary error
We find that the referee abused her discretion by excluding relevant evidence regarding Alters’ personal tax status with the IRS. The referee also erred in failing to find that Alters misused client funds.
The court rejected delay as a mitigating factor and imposed full costs on respondent.
Alters’ extensive misconduct and failure to have complied with the trust accounting rules warranted the Bar’s equally extensive computer forensics investigation, audit, witness depositions, and associated costs; ultimately these amount to $305,360.03. In light of the referee’s recommendations as to guilt that we approve, and the additional rule violations that we find, we see no reason the Bar should be made to bear these costs.
(Mike Frisch)