Attorney escrow agent’s misconduct leads to discipline

In Matter of Grant, the First Department disciplined an attorney based upon escrow-related misconduct. Respondent’s conviction arose from his participation in a scheme whereby victims paid advance fees for fraudulent standby letters of credit (SBLCs) issued by fake banks.

Between 2014 and 2019, respondent acted as escrow agent in these transactions and accepted advance fees from the victims which he was to hold in his escrow account pending issuance of the SBLC. Pursuant to an agreement, he was not to wire the funds out of the account until the victim received the SBLC. Nevertheless, respondent ignored this contractual duty and he immediately wired the victims’ monies to his co-conspirators. In addition, he misappropriated $316,699 in law client funds from his attorney escrow account. As part of his sentence, respondent was directed to pay restitution of $4.8 million to the victims of the SBLC scheme (for which he was jointly and severally liable with two other defendants) and $316,699 to the law client, and to forfeit the $160,000 he personally earned from the SBLC scheme.

In imposing disbarment, the First Department noted that:

This Court’s precedent makes clear that “[a]bsent extremely unusual mitigating circumstances,” which the Referee did not find in this case, intentional conversion of client or third-party funds warrants disbarment (Matter of Lubell, 190 AD2d 479, 481 [1st Dept 1993]; see also Matter of Bernier, 177 AD3d 37 [1st Dept 2019]; Matter of Bloomberg, 154 AD3d 75 [1st Dept 2017]; Matter of Ballner, 140 AD3d 115 [1st Dept 2016]; Matter of Babalola, 139 AD3d 61 [1st Dept 2016]).