Profit From NonProfit Draws Censure
The New York Appellate Division for the First Judicial Department has imposed a public censure of an attorney
On October 6, 2022, respondent pleaded guilty in Supreme Court, New York County, to petit larceny in violation of Penal Law § 155.25, a class A misdemeanor. On December 22, 2022, respondent was sentenced to a one-year conditional discharge upon her payment of $30,000 in restitution pursuant to a forfeiture stipulation.
Respondent’s conviction stemmed from her acceptance of $30,000 in improper payments from a nonprofit charitable organization which employed her as its President and CEO commencing in April 2014. Respondent accepted the position when her longtime colleagues and mentors, who were the nonprofit’s Board Chair and General Counsel, asked if she was interested in it.
In her capacity as President and CEO of the nonprofit, respondent did not have the authority to sign checks or make decisions regarding finances. Rather, the Board Chair had sole authority over all financial decisions. Soon after she began at the nonprofit, respondent successfully obtained funds from New York City that ensured that the nonprofit could pay its outstanding bills to various vendors and its employees.
In December 2014, respondent received, in addition to her regular contractual salary, a check for $10,000, which was purportedly an end of the year recognition of her job performance. One week later, respondent received another check for $7,500 for “services rendered,” again purportedly in recognition of her job performance. Before accepting and depositing these checks, respondent consulted with the General Counsel as to the checks’ propriety, and was allegedly told that they reflected “normal services rendered checks.” Respondent also understood that the Board Chair approved the payments.
In July 2015, after respondent successfully obtained additional funds for the nonprofit, she received another check for $12,500. The General Counsel again assured respondent that the payment was for services rendered and respondent deposited the monies in her personal bank account.
On or about July 31, 2019, respondent was arrested, along with several other individuals associated with the nonprofit and related entities. She learned that she was not, in fact, entitled to the payments totaling $30,000 that she received from the Board Chair. At her plea allocution, respondent stated that she “received money that [she] was not authorized to receive” and that “[the Board Chair] gave [her] the money.” This Court previously determined that the offense for which respondent pleaded guilty was a “serious crime” within the meaning of Judiciary Law § 90(4)(d) and the Rules for Attorney Disciplinary Matters (22 NYCRR) § 1240.12(c)(2). Respondent conditionally admits that, by virtue of her conduct and resulting conviction, she violated New York’s Rules of Professional Conduct (22 NYCRR 1200.0).
In pursuing this motion, the Attorney Grievance Committee and respondent stipulated that there are no factors in aggravation. The parties also stipulated to several factors in mitigation, including: respondent’s good faith belief and reliance that she could accept the payments; respondent’s unconditional admission that her conduct was wrong as well as her acceptance of full responsibility for her actions; respondent’s prior unblemished record at the bar; respondent’s full and complete cooperation with the criminal justice and disciplinary authorities; prompt restitution; evidence of good moral character through the testimony under oath of reputable character witnesses; and pro bono and community service (see ABA Standards for Imposing Lawyer Sanctions § 9.32). Additionally, respondent has been a dedicated and generous member of her community.
(Mike Frisch)