Appellate Division, First Department
Decided on January 17, 2013
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.
Helen E. Freedman, Justice Presiding, Rosalyn H. Richter Sheila Abdus-Salaam Sallie Manzanet-Daniels Nelson S. Roman, Justices.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Michael S. Samuel, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the First Judicial Department on July 12, 1993.
IN THE MATTER OF MICHAEL S. SAMUEL, AN ATTORNEY
Respondent Michael Steven Samuel was admitted to the practice of law in the State of New York by the First Judicial Department on July 12, 1993. At all times relevant to the misconduct which underlies this proceeding, he maintained an office for the practice of law within the First Judicial Department.
In 2003, respondent, whose law practice focused on debt collection and personal injury litigation, founded Sterling Recoveries, Inc. (Sterling), a company which engaged in the purchase of distressed debt portfolios and thereafter, the collection of the debts within those portfolios. In 2004, Abraham Pustilnik (Pustilnik) invested $50,000 with Sterling via AAA Empire Medical Management, Pustilnik's company. Pursuant to the agreement between Pustilnik and respondent, Pustilnik's investment would be used to acquire a debt portfolio and once Pustilnik recouped his initial investment, he would thereafter receive 50% of Sterling's profits. In March 2005, after Pustilnik had recouped his initial investment, respondent learned that Pustilnik had been indicted by the New York County District Attorney's Office (District Attorney's Office) for activities unrelated to Pustilnik's relationship with Sterling. Respondent also learned that as a result of the indictment, Supreme Court, New York County had issued a civil forfeiture order, freezing Pustilnik's income and all of his assets. Because respondent had never seen nor had been served with the forfeiture order, he believed that the forfeiture order did not apply to, bind, nor restrain him.
In 2006, respondent, who was told by Pustilnik that he had no money for food, wrote a check for $20,000 from Sterling's account to one of Pustilnik's relatives. Moreover, despite being aware of the forfeiture order, respondent continued to reinvest Pustilnik's profits in Sterling by purchasing more debt portfolios.
In 2007, the District Attorney's Office contacted respondent during the course of its investigation of the case it had brought against Putstilnik. Respondent fully cooperated with the investigation and on September 20, 2010, because respondent made several cash payments to Pustilnik after respondent became aware of the forfeiture order, he was charged with one count of criminal contempt in the second degree (PL § 215.50), an A misdemeanor. That same day, upon realizing that the fact that he had not been served with the forfeiture order did not obviate compliance with it and thus proscribed him from disbursing any money to Pustilnik and/or reinvesting Pustilnik's profits in Sterling, respondent pleaded guilty to one count of criminal contempt in the second degree. In so pleading, respondent admitted that "[a]lthough I subsequently became aware that Mr. Pustilnik was the subject of a civil forfeiture order imposed by the New York County Supreme Court in or about January 2005 that froze Mr. Pustilnik's income and assets, I made several cash payments to him from monies that he earned from [his] investment."
Pursuant to the plea agreement, respondent was sentenced to three years probation, was ordered to forfeit $60,000 and directed to pay $53,000 to Pustilnik. Additionally, respondent was required to report the conviction ...