Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
A. GAIL PRUDENTI, P. J., WILLIAM F. MASTRO, REINALDO E. RIVERA, PETER B. SKELOS, JOSEPH COVELLO, JJ.
DISCIPLINARY proceeding instituted by the Grievance Committee for the Ninth Judicial District. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on July 15, 1992. By decision and order on application dated February 29, 2008, this Court authorized the Grievance Committee for the Ninth Judicial District to institute and prosecute a disciplinary proceeding against the respondent and the issues raised were referred to the Honorable Jerome M. Becker, as Special Referee to hear and report. By decision and order on motion dated June 18, 2008, that branch of the Grievance Committee's motion which sought the respondent's interim suspension was denied and the remainder of the motion, which sought, inter alia, authorization to institute a disciplinary proceeding, was denied as academic in view of the decision and order on application dated February 29, 2008. The respondent's cross motion for sanctions was denied. On the Court's own motion, the Grievance Committee was afforded leave to amend the petition dated December 12, 2007, to conform with additional evidence produced by the respondent in connection with the motion and cross motion and the respondent was afforded leave to serve an amended answer. By decision and order on motion dated December 2, 2009, this Court denied those branches of the respondent's motion which sought to reopen the hearing before the Special Referee based on new evidence in the form of a letter from the IRS and which sought access to an ex parte application by the Grievance Committee for the Ninth Judicial District for authorization to disclose information to the IRS, and granted that branch of the motion which sought to make that letter part of the record, to be afforded whatever weight the court deems advisable.
The Grievance Committee for the Ninth Judicial District (hereinafter the Grievance Committee) served the respondent with a petition dated December 12, 2007, containing 39 charges, as modified by stipulation dated July 11, 2008, and an amended petition, dated December 13, 2007, containing 37 charges after charges 29 and 36 were withdrawn. After a preliminary conference on June 3, 2008, and hearings on July 15, 2008, and October 21, 2008, the Special Referee sustained all remaining 37 charges. The Grievance Committee now moves to confirm the Special Referee's report and to impose such discipline as the Court may deem just and proper. In addition to submitting an affidavit in opposition to the Grievance Committee's motion to confirm the Special Referee's findings, the respondent moves to impose only limited sanctions upon him and to disaffirm the report of the Special Referee. With respect to any charges sustained, the respondent requests that any public discipline be limited to a public censure.
Charges one through five emanate from the complaint of Mark Kalan, whom the respondent represented with respect to the publication of City Cycle Motorcycle News, a magazine published by Mr. Kalan's company, Motormag Corp. After Mr. Kalan was served with a judgment against that company, he began publishing the magazine through another of his companies, the previously inactive First Hudson Publishing (hereinafter First Hudson). The respondent entered into a business relationship with Mr. Kalan on behalf of the respondent's solely-owned company, A & H Capital Management Group, with regard to funding of First Hudson's magazine publication.
Charges six through nineteen involve various improprieties in the respondent's handling of the Law Office of Glenn B. Allyn IOLA account number 2824003830 at North Fork Bank. These charges include failing to title and identify the account properly, failing to maintain required bookkeeping records, disbursing escrow checks to cash, commingling personal and/or business funds with client funds, disbursing funds on deposit in the IOLA account for personal and/or business purposes, and making undocumented loans from his IOLA account to various businesses in which he and/or both he and his family members are principals.
Charges twenty through twenty-eight, thirty through thirty-five, and thirty-seven through thirty-nine are based on various improprieties in the respondent's handling of Allyn, Hausner & Montanile's escrow account number 2824005470 at North Fork Bank. The specific charges include the failure to maintain required bookkeeping records, disbursing escrow checks to cash, disbursing funds on deposit in the escrow account for personal and/or business purposes, making undocumented loans from his escrow account to various businesses in which he and/or both he and his family members were principals, commingling personal funds with client funds, disbursing funds held in trust for the benefit of a particular client without proper documentation, and failing to safeguard funds entrusted to him as a fiduciary, resulting in a negative balance.
Based on the respondent's admissions and the evidence adduced, we conclude that the Special Referee properly found that the remaining charges of the amended petition were proven by a preponderance of the credible evidence, accordingly, the Grievance Committee's motion to confirm the Special Referee's report is granted. The respondent's cross motion to disaffirm the Special Referee's report, except for charges six, eight, and twenty-one, which were conceded by the respondent in his affidavit in opposition to the Grievance Committee's motion to confirm, and to limit any sanction imposed to a censure, is denied.
In determining an appropriate measure of discipline to impose, the Grievance Committee notes that the respondent previously was issued a Letter of Caution, dated September 30, 2005, for neglecting a legal matter with which he had been entrusted.
The Grievance Committee also informed the Court of an Admonition and a Reprimand issued to the respondent on June 16, 2009, and September 18, 2009, respectively. The Admonition emanates from a complaint by Steven Stuppler based on neglect of a legal matter entrusted to him and making a misrepresentation to the Grievance Committee. The respondent requested a hearing, in accordance with 22 NYCRR 691.6(a), but asked the Grievance Committee to reconsider its findings before it scheduled a hearing. At its September 2009 meeting, the Grievance Committee reconsidered the Stuppler complaint and reaffirmed its findings. The Grievance Committee so informed the respondent and requested written confirmation of his intent to proceed with a subcommittee hearing. It advised the respondent that failure to do so would be construed as a withdrawal of his prior request for a hearing. Inasmuch as the respondent failed to contact the petitioner, the Admonition is final.
The petitioner had issued an Admonition to the respondent on February 9, 2009, in connection with a complaint by Lula Gross. The respondent sought a hearing and also requested reconsideration prior to scheduling a hearing. Based on new evidence, the petitioner withdrew one of its prior findings and issued a modified Admonition on April 8, 2009. The respondent pursued his request for a hearing by a subcommittee of the Grievance Committee, which was held on September 10, 2009. The respondent testified on his own behalf and called a fact witness. The subcommittee made findings of fact which were confirmed by the full Committee at its September 2009 meeting.
The Grievance Committee issued a Reprimand, dated September 18, 2009, finding that the respondent took $14,000 of the sale proceeds of real property in which the complainant had an interest before he provided her ...