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New York lawyer suspended for 1 year for inter alia, making a paralegal signatory on her trust account, failing to supervise the paralegal who stole trust funds, lying, and covering up the theft

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of the New York Supreme Court Appellate Division suspending a lawyer for one (1) year for making her paralegal signatory on her trust account, failing to supervise a paralegal who stole trust funds and then covering up the theft, lying to a grievance committee, and conditioning payment of the funds to the withdrawal of the disciplinary complaint.  The opinion is: In the Matter of Yana Shtindler, 2013 NY Slip Op. 02583 (April 17, 2013).  The opinion is at: https://www.nycourts.gov/reporter/3dseries/2013/2013_02583.htm.

The lawyer was charged with 7 separate counts of misconduct, including failing to maintain proper trust (escrow) account records, failing to safeguard trust funds, making false and misleading statements to a grievance committee, improperly conditioning the payment of third party funds on the withdrawal of a pending disciplinary complaint, failing to supervise her paralegal, and improperly authorizing the paralegal to be a signatory on her trust account.  The paralegal apparently stole thousands of dollars from the trust account and the lawyer then tried to cover the theft up by making false statements, although the lawyer did ultimately make full restitution.

The opinion approved the grievance committee’s motion to approve its findings of guilt on all charges and suspended her for one (1) year.  The opinion stated that, in mitigation, “we have considered the (lawyer’s) remorse, her general reputation as an ethical and honest attorney, and the fact that she made full restitution to the client. However, the (lawyer) admitted that, had she reviewed her accounts in a timely fashion, she could have uncovered the fact that the subject funds had been stolen by her paralegal. The (lawyer) abdicated her responsibility in the most fundamental fashion-she made her paralegal a signatory to her attorney escrow account, she did not supervise or review the subject transaction, and she did not keep proper records, all of which the (lawyer)  conceded was wrong.”

Bottom line:  This case has some very important dos and don’ts for lawyers.  Don’t allow your paralegal or any other non-lawyer to be a signatory on your trust account!  Do closely supervise your paralegals and non-lawyer staff.  Don’t lie to a grievance committee or cover up your paralegal’s theft of funds!  Do keep proper trust account records and procedures.  Finally, don’t condition payment of funds on the withdrawal of a Bar complaint!  As an additional observation, the 1 year suspension in this case is very surprising since the misconduct for which the lawyer was found guilty was very serious and it may or would have resulted in a much longer suspension or disbarment in Florida and other jurisdictions.  

Be careful out there!

Disclaimer: this e-mail does not contain any legal advice 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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

[email protected]

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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