Category Archives: deceit

Iowa lawyer suspended for 4 months without possibility of reinstatement for misappropriating fees from his law firm

Hello everyone and welcome to this Ethics Alert, which will discuss the recent Iowa Supreme Court opinion which suspended a lawyer for 4 months without the possibility of reinstatement for misappropriating fees from his law firm and stated that “(w)e think the time has come to ratchet up the disciplinary sanctions for nonclient theft.”  The case is Iowa Supreme Court Disciplinary Board v. Curtis Den Beste, No 19-0360.  The September 13, 2019 Iowa Supreme Court opinion is here: https://www.iowacourts.gov/courtcases/7209/embed/SupremeCourtOpinion.

The lawyer began practicing law in Iowa in 2000.  He received an offer in 2007 to practice with a law firm and entered into an agreement with the law firm regarding fees.  The agreement required him to deposit all earned client fees into the firm trust account or the general/operating account and he would be paid fifty percent of the earned fees and the firm would keep the remainder.

Beginning in 2015, the lawyer accepted cash payments for fees from some clients and kept the fees instead of depositing them as required by his agreement with the firm.  According to the opinion, after his misconduct was discovered, “(the lawyer) agreed to self-report his misconduct to the disciplinary board and to provide an accounting of the diverted funds as well as a repayment plan.”

The lawyer’s accounting (which was confirmed by the Iowa Bar/Disciplinary Board) showed that he received a total of $18,200.00 and, after for the fifty-percent split and other tax and reimbursement considerations, the lawyer wrongfully misappropriated $9,200.00 from the law firm.

“It is certainly true that, in many cases, fee disputes between a lawyer and his or her current or former law firm might simply be contract disputes and nothing more. For example, a lawyer with a good-faith claim to fees should not be sanctioned merely for exercising or asserting such a claim. But not all fee disputes between a lawyer and a law firm are garden variety contract disputes. Some involve outright and undisputed theft. In such cases, the imposition of discipline is clearly appropriate.”

“The question then arises whether theft from a client is more serious than theft from a law firm or other third party. In our prior cases, the difference has often been dramatic. Theft of any amount by a lawyer from a client ordinarily results in revocation. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Parrish, 925 N.W.2d 163, 170–71 (Iowa 2019); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Guthrie, 901 N.W.2d 493, 500–01 (Iowa 2017). But theft of funds from a law firm can result in much lesser sanctions. Henrichsen, 825 N.W.2d at 529–30.”

“There are, perhaps, some reasons for the distinction between client theft and law firm theft. For instance, many clients have little power against a lawyer in whom the client places trust. A lawyer who steals from a client is preying on those often in an extremely vulnerable position who have placed trust in the lawyer and advanced funds to the lawyer to protect their interests. The relationship between a law firm and a lawyer ordinarily will have less of a power imbalance. The firm is in a better position, perhaps, than a client to monitor the proper handling of fees.”

“Yet, a lawyer who acts dishonestly toward an employer raises serious questions of whether the lawyer has the necessary integrity to practice law.”

“(W)e think the time has come to ratchet up the disciplinary sanctions for nonclient theft. That said, this case may not be the appropriate case to do so. In particular, given our caselaw, Den Beste was not on notice that he faced a possible revocation when he entered into the stipulation in this case. Cf. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cepican, 861 N.W.2d 841, 845 (Iowa 2015) (finding the attorney did not waive his right to contest a complaint of theft-based misconduct by failing to respond because he did not receive adequate notice of the allegation of theft). Thus, we rely on our precedent and impose a sanction in this case consistent with our prior cases. At the same time, we use this case as a vehicle to put the bar on notice that an attorney who steals from a law firm without a colorable claim may well incur stiffer disciplinary sanctions than have been imposed in our past cases.”

Thus, we rely on our precedent and impose a sanction in this case consistent with our prior cases. At the same time, we use this case as a vehicle to put the bar on notice that an attorney who steals from a law firm without a colorable claim may well incur stiffer disciplinary sanctions than have been imposed in our past cases.

“Upon full consideration of this matter, we order that the license of Curtis W. Den Beste to practice law in Iowa be suspended indefinitely with no possibility of reinstatement for a period not less than four months, effective with the filing of this opinion.”

A dissenting justice would have revoked the lawyer’s license to practice law.

“On multiple occasions, Den Beste knowingly embezzled money from his law firm and then attempted to conceal what he had done. He had no colorable claim to nor was there any fee dispute regarding that money. “[I]t is almost axiomatic that the licenses of lawyers who convert funds entrusted to them should be revoked.” Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Irwin, 679 N.W.2d 641, 644 (Iowa 2004). Accordingly, I would revoke Den Beste’s license to practice law.”

Bottom line:  The opinion discusses the differences between law firm theft and theft from the client and others.  The Iowa Supreme Court has provided notice to lawyers that future law firm theft will result in stiffer disciplinary sanctions than in the past.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2999 Alt. 19, Suite A

Palm Harbor, Florida

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Please note:  My office has moved and the new office address is 2999 Alt. 19, Palm Harbor, FL 34683.  All other contact information remains the same.

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Florida Supreme Court permanently disbars lawyer for, inter alia, breaking into former law firm, creating parallel firm, and filing multiple improper fee liens

Hello everyone and welcome to this Ethics Alert, which will discuss the recent Florida Supreme Court Order permanently disbarring a Florida lawyer for, inter alia, breaking into his former law firm and the firm’s storage unit, creating a parallel law firm, and filing multiple improper fee liens.  The case is The Florida Bar v. Christopher Louis Brady, Case No.: SC19-39, TFB No. 2019-10,127(12B)(HES).  The July 11, 2019 Florida Supreme Court Order is here: https://lsg.floridabar.org/dasset/DIVADM/ME/MPDisAct.nsf/DISACTVIEW/2A42CACF97608E7785258439000C41B7/$FILE/_11.PDF 

According to the referee’s report, the lawyer was employed as an associate at a law firm and was fired in July 2018 after missing hearings and for exhibiting “odd and concerning behavior.”  Almost immediately after his firing, the lawyer began holding himself out as the owner of the former law firm even though there was one sole owner.  The Report of Referee is here: https://lsg.floridabar.org/dasset/DIVADM/ME/MPDisAct.nsf/DISACTVIEW/32070D97303477DA852583DF000AB0F1/$FILE/_19.PDF.  The lawyer justified his actions by claiming that the former law firm’s failure to use periods in “PA” when created as a professional association gave him the right to create a new firm of the same name by filing as a professional association with periods, so that it read “P.A.”.

The lawyer and his twin brother were also criminally charged with burglarizing the former law firm’s office in August 2018.  A videotape of the burglary apparently showed the lawyer and his brother backing a truck up to the law firm, tying a rope from the truck to the front door and using the vehicle to rip the door open. The video also showed the lawyer and his brother removing a safe and the law firm’s computer server.  A few days later, the lawyer and his brother burglarized the law firm owner’s storage unit using keys which were taken from a safe that was stolen during the law firm burglary, according to the referee.  The lawyer also stole a firearm during the burglary.

The lawyer filed several documents on behalf of the law firm and its clients without their knowledge or authority, and filed a false confession of judgment in his own favor.  He also filed more than 100 notices of liens for fees in the law firm’s pending cases “in an attempt to grab fees from cases to which he was not entitled.”

The law firm owner obtained an injunction which barred the lawyer from harassing him or interfering with his business.  The injunction also prohibited the lawyer from contacting the firm owner, his employees, his clients or his attorney. The lawyer violated that injunction multiple times and a court order was issued holding him in contempt for violating the injunction three times.

The referee’s report cited the lawyer’s refusal to acknowledge the wrongful nature of his conduct as one of the multiple aggravating factors and recommended permanent disbarment.  According to the referee’s report, “(the lawyer’s failure to acknowledge the wrongful nature of his misconduct) is perhaps the most profoundly implicated aggravator in this case”.  The lawyer “clings to his justification for his actions with a ferocity that is quite disturbing.”

Bottom line:  This case is certainly very bizarre and the lawyer’s conduct as set forth in the report of referee is extremely disturbing.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

 

 

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Florida Bar Board of Governors approves proposed Bar rule prohibiting misleading law firm information in all lawyer advertisements

Hello everyone and welcome to this Ethics Alert, which will discuss the recent approval of revisions to Florida Bar Rule 4-7.13 by the Florida Bar Board of Governors (BOG).  If implemented, the proposed revisions would prohibit misleading law firm information in all Florida lawyer advertisements.

As I previously reported, the agenda for the BOG’s May 26, 2019 meeting included final action on a proposed amendment to Florida Bar Rule 4-7.13 related to misleading law firm advertisements. The BOG ethics committee previously voted not to approve a proposal to add Bar Rule 4-7.13(c), which would have stated:

It is inherently misleading or deceptive for a lawyer to intentionally use, or arrange for the use of, the name of a lawyer not in the same firm or the name of another law firm as words or phrases that trigger the display of the lawyer’s advertising on the internet or other media, including directly or through a group advertising program.”

The revised proposed rule would broaden the prohibition to include all advertisements stating or implying that a lawyer is affiliated with the advertising lawyer or law firm in a way that misleads a person searching either for a particular lawyer or law firm or for information regarding a particular lawyer or law firm, to unknowingly contact a different lawyer or law firm.  The proposed rule is below.

RULE 4-7.13 DECEPTIVE AND INHERENTLY MISLEADING ADVERTISEMENTS 

(b) Examples of Deceptive and Inherently Misleading Advertisements. Deceptive or inherently misleading advertisements include, but are not limited to advertisements that contain: 

(11) a statement or implication that another lawyer or law firm is part of, is associated with, or affiliated with the advertising law firm when that is not the case, including contact or other information presented in a way that misleads a person searching for a particular lawyer or law firm, or for information regarding a particular lawyer or law firm, to unknowingly contact a different lawyer or law firm.

The proposed rule will now undergo a review process and will be sent to the Florida Supreme Court in a petition for potential approval and implementation.

Bottom line:  As I have previously reported, if the revised Rule 4-7.13 prohibiting all of these types of misleading advertisements is implemented by the Florida Supreme Court, the rule would be consistent with other jurisdictions that have considered the issue.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Federal magistrate sanctions New York lawyer for lying about family emergency after Instagram posts showed she was on vacation

Hello everyone and welcome to this Ethics Alert, which will discuss recent opinion of a U.S. District Court magistrate sanctioning a New York lawyer who claimed that she missed a deadline because of a family emergency but was apparently on vacation.  The case is: Siu Ching Ha v. Baumgart Café of Livingston, Civil Action No. 15-5530 (ES) (MAH), and the magistrate’s opinion is here:  Ha v. Baumgart Café of Livingston Instagram sanctions

The lawyer, Lina Franco, and her co-counsel, John Troy, filed for an extension of time to file 16 days past the deadline to file a motion for conditional class certification.  The lawyer said she had to leave the country for the family emergency and submitted a flight itinerary showing she had flown from New York City to Mexico City on Thursday, November 21, 2016 and stayed there until December 8, 2016.

Opposing counsel filed a motion objecting to the extension and for sanctions claiming that Instagram photos from Franco’s public social media account indicated that she was in New York and then Miami during that period.  Franco told the magistrate that she had gone to Mexico City earlier in November and that her mother’s medical diagnosis sent her “into a tailspin” that caused her to miss the deadline and submit an erroneous itinerary.

The magistrate found that “November 21, 2016 was indisputably a Monday, not a Thursday” and, although Franco was in Mexico City in early November 2016, she was apparently in New York City when she missed the Nov. 23, 2016 deadline to file a motion for class certification in a wage-and-hour suit.  The magistrate found that Franco deliberately had misled the court and her co-counsel and that her “misrepresentations to the court clearly constitute bad faith and were unreasonable and vexatious, not simply a misunderstanding or well-intentioned zeal.”   The magistrate granted the motion and imposed sanctions against Franco in the amount of $10,000.00.

Franco was local counsel in the lawsuit and her co-counsel, Troy, was admitted into the case pro hac vice. Troy told the magistrate that he had e-mailed the motion to Franco on the afternoon of the deadline and had expected her to file it and he was unaware of her alleged family emergency. He said he did not follow up with Franco to make sure the motion was filed because he had worked with her in the past and believed that she was reliable.

Both Franco and opposing counsel sought to have Troy held jointly and severally responsible for the sanction; however, the magistrate did not agree, stating that “(e)ven assuming, solely for the sake of argument, that Mr. Troy had a duty to supervise Ms. Franco and was somehow derelict in discharging that duty, such dereliction falls well short of the standard to impose sanctions”.  Opposing counsel requested $44,283.00 in attorney fees and costs; however, the magistrate found that amount to be “unreasonably high” and ordered sanctions in the amount of $10,000.00 to be divided among the three opposing counsel.

Bottom line:  This is a very clear example of a lawyer whose false statements in court documents and in a court proceeding were exposed because of social media posts, in this case Instagram.

Be careful out there in our digital social media world…oh and don’t lie and post pictures on social media exposing the lie.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Wisconsin lawyer suspended for, inter alia, smuggling heavy toothbrushes and red pepper into prison for client

Hello everyone and welcome to this Ethics Alert which will discuss the recent Wisconsin Supreme Court opinion which suspended a Wisconsin lawyer for four months for, inter alia, bringing heavy toothbrushes to client in prison and failing to adequately communicate with a drunken driving client.  The case is In the Matter of Steven Cohen, Case No.: 2015AP1350-D and the opinion is here: https://www.wicourts.gov/sc/opinion/DisplayDocument.pdf?content=pdf&seqNo=202686

According to the opinion, the lawyer was admitted to practice law in Wisconsin in 1996. He received a private reprimand in 2007 after his conviction for one count of misdemeanor disorderly conduct which resulted from an dispute involving the lawyer and his wife.

One count of the disciplinary complaint alleged that, in 2013, the lawyer smuggled two heavy toothbrushes and red pepper to a client who was in prison after being convicted on homicide charges.  Prison authorities found the items in a search of the client after discovering a discarded white pastry bag containing a doughnut and an empty toothbrush package.  The authorities also said that the toothbrushes were heavier than the toothbrushes given to inmates and could be made into shanks (sharpened weapons), and that the crushed red pepper could be made into pepper spray.

The opinion states that: “(w)hen correctional officers interviewed Attorney Cohen about the items, he denied knowing anything about them.  Following additional investigation, Attorney Cohen was arrested for delivering contraband into the Columbia Correctional Institution. In February of 2014, the Columbia County district attorney filed a complaint charging Attorney Cohen with one felony count of delivering illegal articles to an inmate and one misdemeanor count of resisting or obstructing an officer.”

In November 2014, the lawyer pled no contest and was found guilty of a felony count of delivering illegal articles to an inmate, along with two misdemeanors.  Judgment on the felony charge was deferred.  The lawyer said that he brought the items to the prison after his client requested a toothbrush and some food and that his only motive was “from concern for the care of the inmate, and desire to serve.”

The second, third, and forth counts of the complaint alleged that the lawyer accepted a $2,500.00 fee from a DUI client without a written fee agreement and then failed to adequately communicate with the client.  When the client demanded a refund, the lawyer returned half of the fee. He denied that he failed to communicate with the client, but did not provide any documentation to support the denial.  The lawyer also claimed that he had e-mailed the client; however, the client said he did not have an e-mail address.

According to the opinion, the lawyer testified that he did not respond to the client’s telephone calls because he was not ready to speak with the client, which was “a normal trial tactic.”  He also said he did not respond since he tells his clients to call him on his cell telephone rather than his land line, and the client called on his land line. He also claimed his secretary does not take messages on the land line.

The lawyer was suspended for 4 months effective December 29, 2017 and required to pay $8,608.20 in disciplinary costs.

Bottom line:  This lawyer appears to have been attempting to provide an imprisoned client with the tools to injure other inmates, whether in self defense or otherwise.  Obviously, this was improper and the lawyer was suspended for 4 months for those actions, as well as his failure to communicate with another client and charging an improper fee.

Be careful out there.     

Disclaimer:  this Ethics Alert is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

Be careful out there.     Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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