A Bank Error

The Maryland Court of Appeals has indefinitely suspended an attorney who had failed to cooperate with an inquiry into his trust account practices.

Because the investigation commenced with an erroneous overdraft notice, he claimed no obligation existed

According to Milton’s interpretation, upon the tendering of his explanation to Bar Counsel that there was no actual overdraft of his attorney trust account on 30 June 2017 and that a bank error was to blame for the notices sent to Milton and Bar Counsel, Bar Counsel’s further inquiry into Milton’s trust account practices (i.e., possible cash withdrawals) should have ended. Bar Counsel concedes that, although the 30 June 2017 overdraft notice was the result of the Bank’s error, the information provided by Milton in the bank statements appended to his 18 August 2017 response contained also information suggesting prohibited cash withdrawals from the trust account. It was these withdrawals, as well as the failure to respond to Bar Counsel’s requests for information, that resulted in the charges being filed against Milton.

Thus, the question raised apparently by Milton is, essentially, if the initial inquiry by Bar Counsel into a questionable occurrence (based on a good faith belief that perhaps an overdraft violation had occurred) is shown to have not been the attorney’s fault, may other information of possible independent wrong-doing (revealed by the attorney’s initial reply to Bar Counsel’s inquiry) warrant further investigation? We hold that it can (and did in this case). There is no doubt on this record that Bar Counsel’s inquiry into Milton’s attorney trust account was undertaken in good faith. The information requested by Bar Counsel in their initial letter was a standard operating procedure when investigating an overdraft notice involving an attorney trust account. See Attorney Grievance Comm’n v. Mahone, 451 Md. 25, 34 (2016) (Bar Counsel requested “an explanation of the overdraft and client ledgers, monthly bank statements, deposit slips, and canceled checks”). Although a rational and later corroborated explanation clearing Milton of blame was provided for the apparent overdraft, the bank statements provided by Milton with his explanation gave Bar Counsel good cause to continue investigating the circumstances of the potentially prohibited withdrawals…

Although an audit may be a viable alternative to ensure compliance with the rules regarding monetary or book-keeping circumstances in many contexts, it is not the only tool available to Bar Counsel in every potential attorney financial malfeasance case. Bar Counsel was well within the scope of the Rules to request additional financial information to conduct its investigation into the withdrawals that were discovered upon receipt of Milton’s initial explanation of the overdraft and the limited bank statements he supplied.

As to the “but the check cleared” explanation

It is accurate to point out that the check did clear ultimately and Milton provided to Bar Counsel the Bank’s explanation for the sending of the overdraft; however, these facts do not have the sweeping cabining effect on Bar Counsel’s discretion that Milton places on them.

His motion to quash bar Counsel’s subpoena for his records was deemed frivolous. 

The court also rejected his claims of misconduct by Bar Counsel and considered prior discipline in imposing an indefinite suspension. (Mike Frisch)