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Commonwealth of Massachusetts

NO. BD-2003-040


S.J.C. Order of Term Suspension entered by Justice Cordy on July 7, 2003, with an effective date of August 6, 2003.1


Prior to January 1998, the respondent was a solo practitioner whose practice was concentrated in conveyancing, including representing lenders and acting as settlement agent in real estate closings. In this connection, the respondent each month in 1997 regularly deposited and disbursed from his IOLTA account amounts ranging from $1,000,000 to over $3,000,000.

In January 1998, the respondent ceased practicing law as a result of illness and did not resume the practice of law until the fall of 1999. When the respondent ceased practicing law in January 1998, his IOLTA account was short $723,511 needed to make mortgage payoffs and other creditor payments.

The respondentís title insurer paid this sum on his behalf. The title insurer located and recovered $162,174 in closing proceeds that inadvertently had not been wired to the IOLTA account by a lender in November 1997. The title insurer thereafter made claim against the respondentís malpractice carrier and was reimbursed the net deficiency of $561,337.

The CPA firm retained by the respondentís malpractice insurer fully reviewed the 1997 and 1998 activity in the IOLTA account, as well as selected earlier activity. Although the dollar amount of unaccounted-for funds was substantial, there was no evidence that the misuse of trust funds was other than negligent.

The respondentís record keeping in his IOLTA account was generally inadequate and insufficient. He did not maintain ledgers for each transaction or an accurate and complete check register. He did not routinely reference case names or numbers on deposit tickets or on paid checks, making it difficult or impossible to match certain deposits and disbursements to files. He wrote checks to title examiners and other similar types of creditors combining payments of bills for multiple files, without maintaining any record detailing the amount paid on individual files. He made disbursements on numerous occasions that did not match the amounts shown on the HUD-1 settlement statements and he never reconciled the account.

The fees and other disbursements that the respondent paid himself were generally correct and consistent with the amounts shown on the HUD-1 settlement statements. However, as a result of the record-keeping problems, the IOLTA account could not be fully reconciled and only some of the causes of the deficiency could be identified, as described below.

Unknown to the respondent because of his inadequate record keeping, certain closings that he conducted after January 1, 1996 were underfunded by the lenders or borrowers in amounts totaling not less than $88,936. On numerous occasions, the respondent negligently made payments for closings that were not supported by deposits. The deficiency resulting from these errors totaled not less than $56,181 after January 1, 1997.

In addition, between 1993 and 1997, the respondent acted as informal trustee for an elderly client. The respondent did not set up an individual trust account for the client as required. Instead, at periodic intervals over the years, he transferred sums in round amounts of between $25,000 and $100,000 from the clientís savings account to his IOLTA account for future disbursement. The total amount transferred in this fashion was $495,000. However, because of the record keeping problems previously described, and in particular because of the absence of an individual ledger, the respondent between 1993 and 1997 negligently made disbursements from his IOLTA account to or for the benefit of the client totaling at least $37,468.96 more than he had deposited for this purpose.

The respondentís negligent misuse of client funds in 1996 and 1997, without intent to deprive but with actual deprivation resulting at least after January 1998, and his inadequate and improper record keeping through 1997, is conduct in violation of Canon Nine, DR 9-102(A) and (B)(3),(4).

The respondentís failure to maintain a separate, individual interest-bearing account for funds of a clientís living trust that were not nominal in amount or held for a short period of time, instead maintaining these funds in his pooled IOLTA account from 1993 to 1997, is conduct in violation of Canon Nine, DR 9-102(C)(2).

In mitigation, at the time that these record-keeping and accounting problems occurred, the respondent was suffering from major depression that eventually led him to cease practicing law in January 1998. The respondent did not resume the practice of law until the fall of 1999 and no longer represented lenders.

Underlying and contributing heavily to the respondentís medical problems was the fact that the respondent and his wife separated in 1995. At the time, their two children were very young. The divorce matter encompassed a custody dispute, including the appointment of a guardian ad litem, and was settled prior to trial in October 1997. During this period, the respondentís attention was focused entirely on his domestic situation and not on office matters. While the divorce was pending, the respondentís longtime secretary died, further contributing to the disorder in his office and his record keeping.

This matter came before the Board on a stipulation of facts and disciplinary violations and a joint recommendation that, in light of the special mitigating circumstances, the respondent be suspended for one year. On May 12, 2003, the Board voted to accept the stipulation and to recommend the agreed-upon disposition to the Supreme Judicial Court. The Court so ordered on July 7, 2003.

1 The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

2 Compiled by the Board of Bar Overseers based on the record before the Court.

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