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Indiana Supreme Court suspends lawyer for one year with reinstatement for, inter alia, multiple unauthorized transfers from trust account

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Indiana Supreme Court opinion suspending a lawyer for not less than one year and without automatic reinstatement for multiple unauthorized withdrawals from his trust account and holding client funds in a PayPal account. The opinion is In the Matter of Jeffrey D. Heck, SC No. 29S00-1311-DI-736 (Ind. SC June 30, 2013) and the opinion is here: https://www.in.gov/judiciary/files/order-discipline-2014-29s00-1311-di-736.pdf.

According to the short disciplinary opinion, the lawyer and the Indiana Disciplinary Commission stipulated to the following facts: lawyer maintained a client trust account and, at least as early as December 2005, the lawyer had a negative balance in the trust account. The Commission sent him a request for an explanation on March 31, 2006; however, “from that date through 2013, the lawyer failed to respond to or made incomplete responses to 25 demands for information by the Commission. On three occasions, the Commission filed petitions to show cause why the lawyer should not be suspended for noncooperation. In two cases, the lawyer cooperated before entry of a suspension order. In the third case, the Court suspended him before he cooperated sufficiently with the Commission to be reinstated.”

“The lawyer made disbursements from the Trust Account using a check-by-phone system. He made disbursements from the Trust Account for personal purposes; for example, paying for his child’s private school tuition. From December 16, 2006, through March 3, 2010, the lawyer made approximately 47 transfers from the Trust Account which were not based on written withdrawal authorization or that were made payable to ‘cash.’ He failed to create and maintain sufficient records and a contemporaneous ledger for his Trust Account. In addition, the lawyer held money on behalf of clients in a PayPal account, which was not an IOLTA account.”

Bottom line: From the language of the stipulated facts, it appears that this lawyer may have been using his client trust account as a personal ATM and he also held client money in a PayPal account. He also failed to respond to or made incomplete responses to 25 demands for information and, on three occasions, petitions to show cause as to why the lawyer should not be suspended for noncooperation were filed. Based on these facts, the one year suspension requiring reinstatement is somewhat surprising, to say the least.

Let’s be careful out there.

Disclaimer: this Ethics Alert blog is not an advertisement and 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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