A justice of the Massachusetts Supreme Judicial Court disbarred an attorney for misappropriation of PIP funds received on behalf of a six-year-old child who had been struck by a motor vehicle

Contrary to his statement to the child’s mother, Sargent did not “hold onto” the PIP funds. Instead, in seventeen separate cash transactions beginning the day after the deposit, Sargent withdrew the entire $8,000 from his IOLTA account, using the money for his personal benefit. The hearing committee found that the respondent knew that the funds were to be paid to the providers. Thus, he intentionally misused funds entrusted to him.

On December 4, 2019, the day before he was required to produce bank records to the Office of Bar Counsel pursuant to a subpoena, Sargent replaced the $8,000 he had taken out of his IOLTA account. On December 9, 2019, he issued a check to the child’s mother for $8,000.

There were also recodkeeping lapses

In addition to those recordkeeping violations, Sargent twice paid another lawyer a referral fee without informing the clients or obtaining the clients’ written consent. The referral fees were paid out of Sargent’s share of personal injury settlements. The clients were not harmed by the payments because they were made from Sargent’s legal fee, not the total amount.

Mitigation

Sargent offered a number of facts in mitigation, all of which were properly rejected by the hearing committee and the board. He argued that he was undergoing emotional and financial distress due to his need to care for his elderly parents. As a result of that time commitment, he gave up appointed criminal defense work and focused on personal injury matters. The court has sometimes considered an attorney’s emotional distress to be mitigating, but only in very grave circumstances…

While Sargent does appear to have been temporarily in difficult and stressful circumstances in 2019, I agree with the board that those circumstances were not so dire as to mitigate his misconduct. I also agree that Sargent’s remorse, sincere though it may be, is to be expected and is not a factor in mitigation. Finally, he did not make restitution of the PIP funds that he withdrew from his IOLTA account. After this investigation began, he replaced the $8,000 and then paid that amount to the child’s mother. PIP funds, however, are to be paid to the medical providers or health insurers, not to the injured party herself (or her family). This does not mitigate his misconduct.

Sanction

Where an attorney intentionally uses client funds for his own purposes, with an intent to deprive the client of funds or with actual deprivation resulting, the presumptive sanction is disbarment or indefinite suspension…

Where, as here, there are no mitigating factors, our case law makes clear that disbarment is the appropriate sanction. A judgment of disbarment shall issue.

(Mike Frisch)