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Lawyer Converts Client Funds – But He Claims To Have Had A Good Reason For His Actions

Filed May 27.

A lawyer converted $1300 in client funds and loaned those funds to his sick brother. He later repaid the funds to the client. However, the ARDC opened an investigation and the deception was found out.  The ARDC hearing board recommended a censure. The Review Board increased the sanction to a 30 day suspension.

The Panel explains:

“While Respondent’s misconduct was isolated to the one instance where he lost his judgment and used his client funds, there is no question that Respondent engaged in serious misconduct. A lawyer cannot use a client’s funds, no matter how noble the purpose. In re Lenz, 108 Ill.2d 445, 484 N.E.2d 1093 (1985)(attorney sanctioned for use of client funds to purchase a van for another disabled client). Clients must trust lawyers to protect monies given to them to safeguard. When lawyers abuse that trust, they should be subject to sanction.

The Court has repeatedly stated that lawyers must safeguard their clients’ funds. See, In re Rotman, 136 Ill.2d 401, 556 N.E.2d 243 (1990). Despite Respondent’s awareness of the Court’s repeated admonitions and despite his knowledge of his ethical obligations to safeguard his client’s finds, Respondent intentionally misappropriated Cazares’s settlement proceeds. Respondent’s taking of his client’s funds was dishonest, and consequently he violated Rule 8.4(a)(4) as found by the Hearing Board. See, e.g., In re Redell, 03 CH 66 (Review Bd., June 22, 2010), approved and confirmed, No. M.R. 24075 (Nov. 12, 2010)(attorney engaged in a dishonest conversion when he cashed an escrow check and used the funds for his own purposes). For this reason, we do not accept the Hearing Board’s recommendation. Because Respondent knowingly violated his obligations and used client funds, we believe that protection of the integrity of the legal profession demands that Respondent receive a sanction greater than the censure recommended by the Hearing Board.”

The Panel also found that there was significant mitigation:

“Conversely, Respondent presented significant mitigation, warranting a sanction less than the four months sought by the Administrator. Cf., In re Freiman, 118 Ill.2d 341, 515 N.E.2d 78 (1987)(four month suspension for misuse of client funds to satisfy a garnishment; the attorney issued a check to the client that was dishonored). Respondent has never been disciplined. Respondent presented a number of character witnesses, including three judges, who testified as to his honesty and integrity. He has dedicated the majority of his legal career to defending individuals charged with crimes. He was an assistant public defender for ten years, leaving the office only after a client hit him and caused injury. He then went into private practice. Respondent has regularly engaged in pro bono legal services and community service. The Hearing Board found Respondent to be “candid, contrite, and cooperative.”

Also in mitigation, the Hearing Board noted that the client was not aware that Respondent had used his money. After the client requested his funds in writing, Respondent paid the money to the client within approximately a couple of weeks. This is not a case where Respondent dishonestly delayed in making restitution.

“Respondent’s misconduct appears to be an aberration in an otherwise unblemished career. Given the mitigating circumstances, we believe that a sanction of a suspension of thirty days is consistent with the purposes of discipline while making it clear to attorneys that they will face sanctions if they misuse their clients’ funds.”

One might ask what difference does it make that the funds were used for a “good” purpose, as opposed to a bad one. Professor Bernabe of John Marshall believes that the 30 day sanction is not enough. http://bernabepr.blogspot.com/2014/06/shame-on-illinois-review-board.html

I tend to agree with the Professor on this one. Do we really want lawyers who convert a client’s settlement money claiming that they had a noble purpose? Look at it this way: from the client’s standpoint it does not matter whether the lawyer converted funds to help his sick relative or to attend a conference in Las Vegas. The client has suffered the same harm in either case.

Edward X. Clinton, Jr.