No Innocent Victim
An attorney admitted in New York 1961 was reciprocally disbarred by the Appellate Division for the Second Judicial Department based on that same sanction imposed in Florida
The respondent was admitted to the Florida Bar on May 1, 1973. In August 2019, Carl Palomino was awarded the sum of $37,030 in attorney’s fees in a matter in which the respondent was opposing counsel, Hernandez v Phillip Morris, U.S.A., Inc., Miami-Dade County Circuit Court Case No. 2008-001484-CA-01 (hereinafter the Hernandez matter). The respondent was ordered to hold the attorney’s fees in his trust account pending his client’s appeal. The respondent deposited the attorney’s fees into his trust account on February 13, 2020. Apart from these funds, the respondent had the sum of $0.54 on deposit in the trust account. On or about February 4, 2021, the court ordered the respondent to disburse the attorney’s fees award to Palomino, and on or about February 9, 2021, the respondent issued trust account check number 454 to Palomino for the attorney’s fees, which was delivered to Palomino via courier. However, on February 10, 2021, this check was returned for insufficient funds. Approximately one month after the check was returned for insufficient funds, the respondent reported the returned check to the Florida Bar and alleged that his trust account checks had been stolen and forged.
In the Florida proceeding, the escrow records showed a number of transactions
the respondent was deposed by Palomino regarding the Hernandez matter, during which the respondent testified that he was aware he was ordered to disburse the attorney’s fees award to Palomino and stated that he was unfamiliar with GM Investment. On or about April 7, 2021, the respondent and Palomino met in person at the respondent’s bank, where the respondent made a wire transfer to Palomino in the sum of $18,030, which was the remaining balance in the respondent’s trust account. The balance of $19,000 owed to Palomino would be paid to him upon the bank refunding the respondent the purportedly stolen funds. While at the bank, the respondent informed Palomino that the respondent knew who had received the funds, that it was a client of whom the respondent was very fond, and that the respondent would have no problem getting the money back from the client. Palomino confirmed with the respondent that Gisselle Manzzo was the principle of GM Investment. The Florida Bar’s investigation further revealed that Manzzo was the owner and registered agent of GM Investment and that she was a client and close friend of the respondent.
Findings
the respondent failed in his duty to safeguard the fiduciary funds. After the bank had credited the sum of $5,000 to the respondent’s trust account pending its investigation, the respondent could have immediately disbursed those funds to Palomino, but instead the respondent waited several months and took no actions, allowing thousands of dollars to be withdrawn from his trust account. “In the instant case, not only did Respondent fail to close the compromised account and move the funds to a new account, he testified to the undersigned Referee that he also did not bother to look in his checkbook to see if any additional checks were missing to avoid any additional fraud against the trust funds. Respondent testified that he did not conduct such a search through the checkbook until October 28, 2021, in the middle of the final hearing in this matter.”
The GM Investment check involved a close friend of Respondent named Manzzo
Additionally, 10 days after the alleged stolen check was negotiated, Manzzo provided a check to the respondent to use to pay a reinstatement fee to the Florida Bar to cure a delinquency. The referee reiterated that in addition to the respondent’s numerous misrepresentations, the misappropriated funds were ultimately deposited into Manzzo’s account, and the respondent failed to file a police report for the purported fraud until two weeks prior to the final hearing. The respondent failed to safeguard the funds due Palomino, and the respondent was held in contempt by the Circuit Court for failing to abide by the order to disburse Palomino’s funds, and ordered to pay $19,000.
As to the remaining funds due Palomino, the referee found that the “Respondent himself made no attempt to pay any of Mr. Palomino’s missing funds through, at least, the beginning of October 2021. Indeed, it was not until the weeks before the Final Hearing in this [case], after he was held in contempt in the trial court for failure to comply with the court’s order and ordered to pay a purge in the amount of the $19,000.00 that was then still missing, that Respondent borrowed the funds and made Mr. Palomino whole.”
Ultimately, the referee found that “[i]t is clear that Respondent’s actions in this case were not those of an innocent victim. Rather, he purposely delayed taking any protective action, allowing more funds to be misappropriated from the account and delivered to Manzzo. Accordingly, it is not necessary for the undersigned Referee to determine whether Respondent himself wrote the checks, as determined by the bank, or whether some other person in his orbit obtained the checks and made them out fraudulently. It was Respondent’s duty and responsibility to protect the funds in the account, and he failed to do so.”
The report of the referee recommended that the respondent be disbarred, and by order of the Supreme Court of Florida dated August 25, 2022, the report of the referee was approved, the respondent was disbarred from the practice of law, and a judgment in the amount of $11,081.01 was entered for the recovery of costs.
(Mike Frisch)