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In re Kachroo

Supreme Court of New York, First Department

January 14, 2020

In the Matter of Gaytri D. Kachroo, (admitted as Gaytri Devi Kachroo), an attorney and counselor-at-law: Attorney Grievance Committee for the First Judicial Department, Petitioner, Gaytri D. Kachroo, Respondent.

         Disciplinary proceedings instituted by the Attorney Grievance Committee for the First Judicial Department. Respondent, Gaytri D. Kachroo, 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 February 4, 2002.

          Jorge Dopico, Chief Attorney, Attorney Grievance Committee, New York (Yvette A. Rosario, of counsel), for petitioner. Respondent pro se.

          Hon. David Friedman, Justice Presiding, Barbara R. Kapnick Angela M. Mazzarelli Jeffrey K. Oing Anil C. Singh, Justices.

          PER CURIAM

         Respondent Gaytri D. Kachroo was admitted to the practice of law in the State of New York by the First Judicial Department on February 4, 2002, under the name Gaytri Devi Kachroo. At all times relevant to this proceeding, respondent maintained a registered address in Massachusetts, where she was admitted to practice and resides.

         The Attorney Grievance Committee (AGC) now seeks an order, pursuant to Judiciary Law § 90(2) and New York's Rules for Attorney Disciplinary Matters (22 NYCRR) § 1240.13, imposing reciprocal discipline on respondent, predicated on an order of the Supreme Judicial Court of the Commonwealth of Massachusetts dated October 26, 2018, accepting respondent's resignation from that state's bar as a disciplinary sanction and ordering her name stricken from the roll of attorneys.

         The Massachusetts Board of Bar Overseers (BBO) filed a statement of disciplinary charges alleging that respondent had committed various acts of professional misconduct, including negligent (i.e., non-venal) misappropriation of client funds and failure to maintain required escrow account records. Specifically, the statement asserted that, between October 2012 and February 2015, respondent billed a client, a wealthy London resident formerly married to a billionaire hedge fund financier, over $1.4 million for respondent's non-legal investigative services, including an investigation of the ex-husband's alleged market abuse and other alleged financial misconduct. The fee was excessive because the investigation produced no benefit to the client, and respondent billed at her regular rate of $700 per hour for 150 hours of a paralegal's work, and for respondent's time responding to 4, 000 text messages from the client that were not material to the representation, and which totaled approximately $300, 000 in violation of the Massachusetts Rules of Professional Conduct (Mass. R. Prof. C.)1.5(a) (prohibition against charging and/or collecting an excessive legal fee).

         The statement further averred that, between December 1, 2012 and July 31, 2013, respondent, who periodically received retainer payments from the client, withdrew from her escrow account $170, 236.57 more toward the client's fees than had been deposited, in violation of Mass. R. Prof. C. 1.15(b) and 1.15(c) (negligent misuse of client funds). In September 2013, respondent facilitated a financial investment by the same client in a pharmaceutical company in which respondent was an executive and board member, but respondent failed to disclose that a portion of the client's investment funds might be used to pay respondent's compensation as a board member and that respondent's representation could be materially limited by her personal interests, constituting a conflict of interest in violation of Mass. R. Prof. C. 1.7(b) and 1.8(a)(l) (entering into business transaction with client without obtaining adequate informed consent in writing from client as to conflict of interest).

         The statement additionally focused on respondent's representation, beginning in 2011, of multiple clients in federal court litigation related to a massive Ponzi investment scheme by Stanford International Bank, Ltd. Respondent's fee agreements with those clients provided for an excessive contingent fee of the awards received by the clients (for respondent merely filing out a two-page claim form), in violation of Mass. R. Prof. C. 1.5(a). As to some of these clients, respondent also failed to maintain adequate individual client ledgers, failed to credit retainers paid, and negligently debited from her escrow account amounts in excess of the retainers then on deposit (after the retainers had been exhausted), thereby misusing the funds of other clients in violation of Mass. R. Prof. C. 1.15(b) and 1.15(c). The statement acknowledged, however, that none of these clients was deprived of any funds.

         The statement further outlined how, in 2015, respondent executed a settlement agreement of a fee dispute with a former client which contained an explicit provision that, as a condition of settlement, the former client was prohibited from filing a complaint with bar counsel. Both parties were represented by counsel but, in executing a clause in a settlement agreement requiring a party to refrain from filing a complaint with bar counsel, respondent violated Mass. R. Prof. C. 8.4(g) (failure without good cause to cooperate with disciplinary authorities), 8.4(h) (other conduct that adversely reflects on fitness as a lawyer), and MA S.J.C. Rule 4:01 § 10 (improperly conditioning settlement on not filing disciplinary complaint).

         Finally, the statement alleged that, from December 2012 until September 2017, respondent maintained an IOLTA account for which she failed to keep: (1) required records, namely, timely or contemporaneous individual client ledgers reporting each receipt of funds, the dates thereof, and the amounts; (2) a ledger of bank fees and charges; and (3) a prompt or contemporaneous record in check register or clients ledgers of receipts and disbursements on behalf of clients, which resulted in inaccurate and unbalanced three-way reconciliations in violation of Mass. R. Prof. C. 1.15(f)(1)(B)-(E) (failure to maintain required bookkeeping records).

         In response to the statement of charges, respondent, represented by counsel, tendered an affidavit in which she stated that she desired to resign from the practice of law in Massachusetts as a disciplinary sanction for the misconduct set forth by the BBO, waived her right to a hearing, and agreed not to contest the facts underlying the charges, the rule violations charged therein, nor the resulting discipline in Massachusetts or "in any other jurisdiction." The Massachusetts Office of Bar Counsel and the BBO recommended that respondent's resignation be accepted and, by order entered October 26, 2018, the Supreme Judicial Court of Massachusetts accepted respondent's affidavit of resignation as a disciplinary sanction and her name was stricken from the roll of attorneys.

         As noted, the AGC now seeks an order, pursuant to the doctrine of reciprocal discipline, finding that respondent has been disciplined by a foreign jurisdiction, directing her to demonstrate why she should not be reciprocally disbarred, or, in the alternative, subject to a sanction this Court deems appropriate, based on her discipline in Massachusetts.

         In a proceeding seeking reciprocal discipline pursuant to the Rules for Attorney Disciplinary Matters (22 NYCRR) § 1240.13, the respondent is precluded from raising any defenses except: (1) lack of notice or opportunity to be heard in the foreign jurisdiction constituting a deprivation of due process; (2) an infirmity of proof establishing the misconduct presented to the foreign jurisdiction; or (3) that the misconduct for which the attorney was disciplined in the foreign jurisdiction does not constitute misconduct in this State. There is no question that the first two prongs were satisfied, because respondent knew about the charges and affirmatively chose not to contest them. As for the third prong, we find that the misconduct in Massachusetts would constitute misconduct ...


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