Inadvertent Misappropriation Earns Attorney A One-Year Suspension
Unintentional And Easily Avoidable Error Leads To Suspension Even Though Parties Agreed That Attorney “Did Not Steal Or Borrow Money From The Escrow Account”
In Matter of Polanco, a case concerning inadvertent misappropriation, the court suspended an attorney for one year for multiple instances of misconduct which came to light when an escrow check bounced. The check bounced because the attorney did not realize that a wire transfer did not yet go through (a situation which would not occur with our services). In imposing a one-year suspension, the Court explained that:In mitigation, the parties agree that the respondent did not steal or borrow money from the escrow account. While running a busy real estate practice, the respondent failed to detect that a money wire transfer had not been deposited into the escrow account before disbursing funds in that matter. He has now opened a new escrow account, and completed a continuing legal education program concerning Attorney Escrow Accounts. The parties agree that there are aggravating factors presented, including the fact that the misconduct herein occurred over a 2-year period, involved multiple instances of misappropriation, constituting a pattern; that the respondent failed to notice the deficiencies in his account until brought to his attention during the underlying investigations; and that he has a prior disciplinary history, having received one Admonition and three Letters of Caution. As to his disciplinary record, the respondent explains that since opening his practice in 2007, he has represented more than 9,000 clients, and in view thereof, he suggests that the four private letters over the course of 10 years represents a “microscopic number.”This case showcases the gravity of the consequences that can befall an attorney for even an unintentional mismanagement of client funds in their escrow account. Despite the fact that the attorney in this case did not steal or borrow any money, he still lost his license as a result of not properly handling the funds entrusted to him by his clients. Inadvertent misappropriation has very real consequences, and this case serves as a reminder of the importance of utmost care and precision when it comes to managing client funds, as even unintentional misappropriation can lead to severe disciplinary action. In this case, had the attorney retained an external accountant such as Law Ledgers to monitor his books, the situation would have likely been identified and addressed before it escalated to the point of disciplinary action.
