An Error In Your Favor

A District of Columbia Hearing Committee has recommended disbarment of an attorney whose client was mistakenly paid with funds intended to pay off a mortgage and had refused to return the funds.

Respondent had been held in contempt for failure to cooperate with discovery in aid of a judgment against the client.

we find clear and convincing evidence that Respondent’s clients purposefully acted to retain the funds that were mistakenly given to them, knowing that in doing so they were acting in violation of the law and that Respondent knowingly acted to assist in their endeavors. The money that Ms. Warren received was, as she knew, intended to pay off her mortgage on the property she had just sold. Instead of returning the money to District Title, or paying her mortgage company herself, she took the money, knowing that it was not hers. Respondent ordered the proceeds of one real estate sale to be sent to New Zealand, effectively putting them out of the reach of District Title. In addition, as described above and in Section IIC below, Respondent took numerous steps to avoid disclosing what steps he and his clients had taken to convert District Title’s funds to their own use. Because Respondent refused to cooperate with the district court, and with Disciplinary Counsel, we do not know what, if any, portion of these funds he received as a fee. But we do know that there is clear and convincing evidence that he assisted his clients in criminal activity.

The contempt conviction did not involve moral turpitude

we do not think that Disciplinary Counsel has persuasively shown that the act of refusing to testify is one for which automatic disbarment is appropriate.

But the evidence established criminal conduct that reflected adversely on fitness to practice

There is no doubt that Respondent committed a criminal act because he has been convicted of one. The question is whether it “reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects.” Respondent had knowledge of the whereabouts of at least some of the disputed funds, and his multiple efforts to frustrate the pursuit of that knowledge, particularly his refusal to take the stand at his deposition, were designed to avoid being questioned about his clients’ fraudulent diversion of funds and the role he played in that. Honest lawyers do not participate in covering up their clients’ dishonest conduct and thus his crime violated Rule 8.4(b).

The committee found that Respondent had engaged in frivolous bankruptcy litigation but not a withdrawal violation

Disciplinary Counsel contends that Respondent violated Maryland Rule 19- 301.16(d) by refusing to turn over Ms. Warren’s client file to the personal representative of her estate following her death. ODC Br. at 30-32. Though he did not participate in these proceedings, Respondent previously asserted to Disciplinary Counsel that to do so would violate his duty of confidentiality to Ms. Warren. FF 62.

Disciplinary Counsel has failed to prove this Rule violation by clear and convincing evidence. Absent proof that Respondent is lying about Ms. Warren’s wishes with respect to confidentiality, the strictures of D.C. Rule 1.6 protecting client confidentiality suggest that Respondent may have had a legal ground for withholding the information.

Sanction

Respondent’s bad conduct began in 2014 and continued for at least six years. Respondent’s misconduct “fits comfortably with prior cases in which we have disbarred attorneys for engaging in a broad, prolonged, and persistent pattern of dishonesty.” In re Mazingo-Mayronne, 276 A.3d 19, 23 (D.C. 2022); see In re O’Neill, 276 A.3d 492, 503 (D.C. 2022); Baber, 106 A.3d at 1077 (“The repeated and protracted nature of Mr. Baber’s dishonesty weighs significantly in favor of disbarment.”).

Thus, as we noted earlier, Respondent’s acts are most akin to the tax evasion scheme discussed in Shorter, 570 A.2d at 771. In that matter, despite finding that there was no moral turpitude, the Court nonetheless ordered disbarment based on a “pattern of dishonest dealing” remarkably similar to the pattern here – one involving the shielding unfavorable information from authorities. Id. at 765, 768, 771.

Respondent had knowledge of the whereabouts of at least some of the disputed funds and made multiple efforts to frustrate the pursuit of that knowledge. Ultimately, these efforts were designed to cover up his clients’ diversion of funds and his role in that diversion.

The order of the United States Court of Appeals for the District of Columbia Circuit affirming the contempt is linked here. 

Respondent did not participate in the bar proceedings. (Mike Frisch)