Supreme Court of New York, Appellate Division, Fourth Department
MATTER OF ANDREW J. COHEN, AN ATTORNEY, RESPONDENT. GRIEVANCE COMMITTEE OF THE SEVENTH JUDICIAL DISTRICT, PETITIONER.
PRESENT: SMITH, J.P., FAHEY, CARNI, SCONIERS AND GORSKI, JJ.
OPINION AND ORDER
Order of suspension entered.
Respondent was admitted to the practice of law by the Appellate Division, Second Department on September 13, 1978, and maintains an office in Rochester. The Grievance Committee filed a petition alleging five charges of misconduct against respondent, including misappropriating client funds, entering into improper loan agreements with clients in order to correct a deficient balance in his attorney trust account, and failing to comply with the former Disciplinary Rules and the current Rules of Professional Conduct regarding the maintenance of client funds and required records. Respondent filed an answer denying material allegations of the petition, and a referee was appointed to conduct a hearing. The Referee has submitted a report, which the Grievance Committee moves to confirm and respondent cross-moves to confirm in part and disaffirm in part.
The Referee found that, in 2004, respondent was retained to represent a client personally and in her capacity as executrix of an estate and that, in January 2005, he deposited into his trust account funds belonging to the estate in the approximate amount of $69, 000. The Referee further found that, from 2005 through 2009, respondent did not attempt to disburse those funds to his client and misappropriated estate funds in the approximate amount of $65, 000, using the funds for personal purposes. In addition, the Referee found, and respondent admits, that in 2005 respondent withdrew from his trust account funds belonging to the estate in the approximate amount of $4, 000 as legal fees for services rendered to the estate.
The Referee found that, when respondent's client requested that respondent disburse the estate funds to her in June 2010, he paid her funds from his trust account in the approximate amount of $65, 000. The Referee further found that, when respondent disbursed those funds to his client, he knowingly and intentionally converted funds of other clients that were in his trust account. The Referee found that respondent thereafter attempted to conceal that conversion by entering into loan agreements with two clients purporting to authorize him to withdraw from his trust account funds belonging to those clients. In addition, the Referee found that, in September 2010, respondent borrowed $10, 000 from a client without advising the client to consult independent legal counsel prior to entering into the transaction or disclosing to the client that he had substantial outstanding personal and business debts.
In addition, the Referee found that, from 2005 through 2010, respondent failed to make and keep proper trust account records, made cash withdrawals from his trust account, allowed a nonattorney to be an authorized signatory of his trust account, commingled personal funds with client funds, and continually failed to maintain a balance in his attorney trust account sufficient to satisfy his obligations to his clients. Moreover, the Referee found that respondent engaged in illegal conduct when he failed to report as income on his state and federal income tax returns the funds misappropriated from his clients from 2005 through 2010.
We confirm the findings of fact made by the Referee with the exception of the findings related to the tax returns. The Grievance Committee failed to establish by a preponderance of the evidence that respondent had a duty to report the misappropriated funds as income on his tax returns or that he engaged in illegal conduct when he failed to do so.
We conclude that respondent has violated the following former Disciplinary Rules of the Code of Professional Responsibility and the following Rules of Professional Conduct:
DR 1-102 (a) (4) (22 NYCRR 1200.3 [a] ) and rule 8.4 (c) of the Rules of Professional Conduct (22 NYCRR 1200.0) - engaging in conduct involving dishonesty, fraud, deceit or misrepresentation;
DR 1-102 (a) (5) (22 NYCRR 1200.3 [a] ) and rule 8.4 (d) of the Rules of Professional Conduct (22 NYCRR 1200.0) - engaging in conduct that is prejudicial to the administration of justice;
DR 1-102 (a) (7) (22 NYCRR 1200.3 [a] ) and rule 8.4 (h) of the Rules of Professional Conduct (22 NYCRR 1200.0) - engaging in conduct that adversely reflects on his fitness as a lawyer;
DR 9-102 (a) (22 NYCRR 1200.46 [a]) and rule 1.15 (a) of the Rules of Professional Conduct (22 NYCRR 1200.0) - misappropriating client funds and ...