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Commonwealth of Massachusetts

NO. BD-2007-073

IN RE: DAVID J. CORTIELLA

S.J.C. Order of Term Suspension entered by Justice Cordy on August 23, 2007, with an effective date of September 24, 2007.1

SUMMARY2

In February 2000, the respondent became the CEO for a Massachusetts non-profit corporation that provided affordable housing for residents of Bostonís South End neighborhood. The respondentís salary was $100,000 and his employment contract provided that the salary could only be increased with the approval of the non-profitís Board of Directors (Board). As CEO, the respondent held a position of trust and confidence and had fiduciary obligations to the non-profit.

In July 2000, the respondent directed the non-profitís accounting department to put him on an affiliated non-profitís payroll at a base salary of $20,000 per year. The respondent intended that this salary be in addition to the $100,000 per year salary he was already receiving. The respondent was not authorized to pay himself any additional salary and did not obtain the Boardís approval of his action. Between July 2000 and December 2001, the respondent collected over $29,000 in additional salary that he knew, or should have known, he was not entitled to receive.

In January 2002, the respondent, as CEO of the non-profit, authorized a $50,000 per year increase in his salary through the affiliateís payroll. The respondent knew that he was not authorized to increase his salary without the Boardís approval, but he did not obtain its approval for the increase. In 2002 and 2003, the respondent received over $90,000 in unauthorized salary that he knew, or should have known, he was not entitled to receive.

In addition to these unauthorized payments, between May 2001 and February 2003, the respondent directed the non-profitís comptroller to pay him a bonus of $30,000; buy out his sick time and vacation time for over $6,000; and increase his yearly base salary by five percent. The respondent failed to obtain the Boardís approval to any of his actions. The respondent knew, or should have known, that he was not authorized to take any of these actions without the Boardís approval.

In September 2003, the non-profitís chair and treasurer obtained a history of all compensation paid to the respondent and learned for the first time that the respondent had received at least $171,000 in unauthorized payments from the non-profit and its affiliate. When confronted, the respondent admitted that he had taken the improper payments.

On March 26, 2004, the non-profit and its affiliate sued the respondent in superior court alleging, among other things, that the respondent had breached his fiduciary duties to the non-profit and the affiliate by wrongfully converting funds belonging to them to his own use. On August 10, 2004, in a separate action brought by the Office of the Attorney General that was consolidated with the other matter, the Attorney General and the respondent entered into a consent judgment in which the respondent agreed to resign from any positions he held with public charities registered in Massachusetts, not participate or be involved in any way with charitable organizations registered in Massachusetts for a period of four years, and make full restitution to the non-profit and its affiliate. The same day, the respondent made full restitution.

The respondentís breach of his fiduciary obligations to the non-profit and to the affiliate and his wrongful conversion of their funds violated Mass. R. Prof. C. 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation) and (h) (conduct adversely reflecting on the fitness to practice law).

On July 25, 2007, the parties submitted a stipulation to the Board of Bar Overseers recommending that the respondent be suspended from the practice of law for two years. On August 13, 2007, the Board of Bar Overseers voted to accept the stipulation of the parties and their proposed sanction.

On August 23, 2007, the Supreme Judicial Court for Suffolk County ordered that the respondent be suspended from the practice of law for two years effective thirty days after the date of the entry of the Courtís order.


FOOTNOTES:

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 Supreme Judicial Court.



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