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.
Decided on August 7, 2012
SUPREME COURT, APPELLATE DIVISIONFirst Judicial Department
Angela M. Mazzarelli, Justice Presiding, John W. Sweeny, Jr. Karla Moskowitz Dianne T. Renwick Nelson S. Roman,Justices.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Stephen G. Kennedy, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the Second Judicial Department on May 27, 1987.
IN THE MATTER OF STEPHEN G. KENNEDY, A SUSPENDED ATTORNEY
Respondent Stephen George Kennedy was admitted to the practice of law in the State of New York by the Second Judicial Department on May 27, 1987. At all times relevant to these proceedings, respondent maintained an office for the practice of law within the First Judicial Department.
By order entered June 30, 2011, we suspended respondent on an interim basis pursuant to 22 NYCRR 603.4(e)(1)(iii) based upon his admitted conversion and/or misappropriation of escrow funds, his failure to maintain a ledger for his escrow account, and his inability or unwillingness to account for numerous escrow account transactions (Matter of Kennedy, 87 AD3d 107 ).
On May 24, 2011, the Departmental Disciplinary Committee served respondent with a notice and statement of charges alleging five ethics violations arising from his conversion of escrow funds held by him in connection with a real estate transaction. Charge 1 alleges that by using funds in his IOLA account that belonged to the buyer to pay for various personal and/or business expenses without permission or authority, respondent intentionally converted funds and thereby engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of DR 1-102(A)(4) and RPC 8.4[c]. Charge 2 alleges that by failing to provide the Committee with the requested escrow account records as well as a full accounting of the transactions in question despite repeated requests, respondent engaged in conduct that was prejudicial to the administration of justice in violation of DR 1-102(A)(5) and RPC 8.4(d). Charge 3 alleges that, by using the funds in his IOLA account to pay for various business related expenses without the client's permission or authority, respondent engaged in the misappropriation of funds in violation of DR 9-102(A) and RPC 1.15(a). Charge 4 alleges that by failing to maintain required bookkeeping records, as well as failing to make accurate financial entries in a ledger or similar record of receipts and disbursements, respondent violated DR 9-102(D)(1) and (D)(2), as well as RPC 1.15(d)(1) and (d)(2). Charge 5 alleges that by engaging in all of the misconduct listed above, respondent engaged in conduct that adversely reflects on his fitness as a lawyer in violation of DR 1-102(A)(7) and RPC 8.4(h).
Respondent submitted an answer admitting the charges; however, he claimed that the buyer's alleged entitlement to receive the escrow funds was in dispute, that he was expecting funds from other sources that would allow full reimbursement of the down payment he had used, and he was forthright and cooperative with the Committee. Immediately prior to the Referee's hearing, the Committee and respondent entered into a stipulation in which respondent made admissions ...