Reciprocal Sanction Increased

The District of Columbia Court of Appeals imposed disbarment in a reciprocal discipline matter from Virginia, which had suspended the attorney for a year and a day. 

We agree that the misconduct found by the [Virginia State Bar Disciplinary] Board would result in the substantially different sanction of disbarment in this jurisdiction, and we therefore disbar respondent.

The court summarized the findings

The VSB Board made findings that included the following: Respondent, one of the two principals of his law firm, was entitled, by agreement with his co principal, to receive a monthly draw of $15,000. He was also to be paid an additional $25,000 for maintaining the books and records for the firm, but there was no agreement as to when or how he would receive that amount each year. In 2017, it came to light that respondent had been paying personal expenses (for items such as groceries, restaurants, and charges related to his sons’ college expenses) from the firm’s operating and trust accounts. An experienced bookkeeper who examined the bank accounts of the law firm found that the trust account had a shortfall of $21,074.99, “saw no evidence of any trust account reconciliations having been performed,” and found that some deposits were made into the wrong account. A VSB investigator found that no money was actually missing according to the firm’s records, but that “by making payments directly to vendors for personal expenses, [r]espondent [had] ‘skipped a step.’” The VSB Board found that respondent’s partner restored the $21,074.99 to the trust account by transferring funds from the operating account, “which had sufficient funds available for that purpose.”

The VSB investigator also found that respondent filed petitions for bankruptcy in which he listed only his monthly draw of $15,000 and not his “considerably higher” total annual income ($298,396; $451,460; and $387,308, for the years involved). Respondent also did not list on the bankruptcy schedules a vehicle that he had purchased for his wife for over $51,000 (using a law firm check).

Regarding the payments he made to himself from the law firm’s operating and trust accounts, respondent testified that he had earned and was owed the money and “simply paid himself as the year went along rather than waiting until the end to do a formal reconciliation.” Respondent admitted that he did not perform the trust account reconciliations required by the Virginia Rules of Professional Conduct, but testified that he “did . . . calculations in his head and . . .knew how much he was entitled to receive.” Regarding bankruptcy forms, he testified that he did not understand all the questions on the forms and that he disclosed previously underreported income to the IRS after VSB’s investigation began and thereafter entered a payment plan to pay additional taxes.

Sanction 

Respondent emphasizes that there was no need to use the trust account for many of the law firm’s (primarily) government-contract clients, who did not make any advance payments to the law firm. He also emphasizes that the law firm’s trust account “sometimes had money for only a few days before it was properly and accurately transferred to the operating account.” In addition, we are mindful of the VSB Board’s finding that funds missing from the trust account were restored to it through a transfer from the law firm’s operating account, which “had sufficient funds available for that purpose.”

However, these points do not change our conclusion, because our case law does not make the appropriateness of disbarment as a sanction dependent on factors such as the extensiveness of the law firm’s use of its trust account, the size of the trust account, the amount of improper disbursements from it, and the duration of the clients’ deprivation of funds. See In re Robinson, 583 A.2d 691, 692 (D.C. 1990) (per curiam) (concluding that “the relatively small amount of money, the relatively short period of time during which the client was denied the misappropriated funds, [and] the absence of financial harm to the client” did not overcome the presumption of disbarment in our jurisdiction).

The panel that issued the per curium decision consisted of  Associate Judges Thompson, McLeese, and Deahl. (Mike Frisch)