COVID Isolation Leads To Misconduct, Suspension

The New York Appellate Division for the Second Judicial Department has suspended an attorney for six months.

Misconduct

Between July 17, 2020, through September 22, 2020, the respondent had funds entrusted to him as a fiduciary, incident to the practice of law, and the sum of $41,833.34 in earned legal fees on deposit in the 1237 Account. During the same period, [his longtime paralegal] Ward issued five checks totaling $50,140.64 against the 1237 Account for her own benefit when there were no correlating funds on deposit for the checks that she issued. Between July 17, 2020, and September 22, 2020, the respondent failed to properly review, audit, and reconcile the 1237 Account.

Disposition

In the instant matter, the respondent left his law practice to isolate due to the COVID19 pandemic and left the responsibility of his trust accounts to Ward. She had access to the trust account passwords, checkbooks, ledgers, and bank statements, which she prepared and packaged for Malone to mail to the respondent at his upstate home. In July 2020, when Malone fell ill and could no longer mail the bank statements and trust account documents to the respondent, Ward had no oversight of her activities in the office. It was during this period of time, from July 2020 through September 2020, that Ward “stole” approximately $50,000 in client funds. Ward concealed her actions by directing clients to transfer their legal fees into the 1229 Account and then transferred funds between the trust accounts. Even when the subject check was dishonored in July 2020, the respondent was unaware of such until just prior to his return to the office in late September 2020. The respondent deposited personal funds to cover the deficit; however, he did not perform a full reconciliation of the trust accounts and was unable to recognize Ward’s “theft” until approximately three months after he returned to the office, which was approximately six months after Ward’s intial [sic] “theft.” In view of the evidence adduced at the hearing, we find that the Special Referee properly sustained all charges. Accordingly, the Grievance Committee’s motion to confirm the report of the Special Referee is granted.

In determining an appropriate measure of discipline, this Court considered, inter alia, the challenging circumstances the respondent faced during the COVID19 pandemic, the remedial measures implemented, and the substantial character evidence presented.

Under the totality of the circumstances, we find that the respondent’s conduct warrants his suspension from the practice of law for a period of six months.

(Mike Frisch)