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Commonwealth of Massachusetts

NO. BD-2007-100

IN RE: JAMES V. MIRAGLIOTTA

S.J.C. Order of Term Suspension entered by Justice Botsford on October 31, 2007, with an effective date of November 29, 2007.1

SUMMARY2

In 2005 and 2006, the respondent represented a trust and a corporation with common ownership in discrete transactions. Each entity was in the business of providing short-term high-interest loans to consumers who did not qualify for conventional financing. Each loan was secured by residential real estate. During his representation of his two clients, the respondent prepared the loan documentation, acted as settlement agent, witnessed the execution of the loan documents and recorded the mortgages that secured the promissory notes. At no time did the respondent represent, or hold himself out as representing, any borrower.

With respect to at least four of the loans that the respondent prepared and closed, the interest rates stated on the notes did not exceed 20% per annum. However, the loans were required to be paid back in less than one year and there were substantial fees required to secure the loans. When the interest rate is calculated on an annual basis and the fees paid by the borrower are included in the calculation of the interest rate in accordance with G.L. c. 271, § 49(a) (the criminal usury statute), the annual percentage rate for each loan exceeds 20%. The actual annual percentage rate of the four loans so calculated was 28.48%, 29.13%, 46.74% and 61.14%.

The four loans were proscribed by the usury statute unless the respondent or his clients had notified the Attorney General pursuant to G.L. c. 271, § 49(d) of, the client’s intent to engage in transactions that would otherwise be proscribed. At or prior to the execution of the loans, neither the respondent nor his clients notified the Attorney General as required by law.

The respondent counseled or assisted his clients in making loans that he knew or had reason to know violated G.L. c. 271, § 49. In addition, the respondent knowingly possessed, maintained and recorded documents regarding loans that he knew or had reason to know were usurious in violation of G.L. c. 271, § 4(b).

The respondent’s conduct was in violation of Mass. R. Prof. C. 1.2(d) and 8.4(b), (c) and (h).

The respondent’s conduct had the potential for harm. The borrowers faced harsh penalties or the loss of their homes to foreclosure if their financial situation or their ability to sell or refinance on more conventional terms did not improve over a short period of time.

This matter came before the Board on a stipulation of facts and disciplinary violations and a joint recommendation for discipline by a six-month suspension. On October 15, 2007, the Board accepted the parties’ recommendation and voted to recommend to the court the imposition of a six-month suspension. On October 31, 2007, the court entered an order suspending the respondent for a period of six months, effective thirty days from the date of the 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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