Failing To Remit Mortgage Payments Collected From Client, Allowing Home To Be Lost To Foreclosure Among Acts That Lead To Disbarment For SC Attorney

In a recent ruling by the South Carolina Supreme Court, an attorney licensed in the state was disbarred over seven separate incidents of misconduct and was ordered to pay full restitution to all clients, banks, and other persons and entities, including the Lawyers' Fund for Client Protection (ie. South Carolina's "attorney ripoff reimbursement fund"),(1) who have incurred losses as a result of her misconduct and reimburse the Commission on Lawyer Conduct and Office of Disciplinary Counsel for costs incurred in this matter.

Among the matters was one incident (designated in the ruling as Matter 1) where the attorney ("Respondent") received checks and money orders from clients for payments to the clients' mortgage lender.

• Respondent admits she failed to make the mortgage payments for the clients, used the checks and money orders entrusted to her for purposes other than payment of the clients' mortgage, made material misrepresentations to the court at the foreclosure hearing regarding her clients' home, and that her failure to make her clients' mortgage payments resulted in the clients' home being sold at foreclosure.

• Respondent acknowledges she failed to communicate with her clients regarding the foreclosure action. Respondent's clients only learned that their home was sold at the foreclosure sale when approached by the lender's real estate agent. Due to respondent's misconduct, her clients had to obtain new counsel in an effort to save their home.(2)

• Respondent admits she failed to safeguard her clients' funds. Further, she admits she wrote checks from her trust accounts for expenses such as employee payroll, her children's school programs, parking tickets, and restaurant charges.(3)

For the full laundry list of escapades that left a slew of other screwed over clients in her wake, see In the Matter of Sherry Bingley Crummey, No. 26840 (S.C. July 26, 2010).

(1) For similar funds established to reimburse clients who have suffered a loss due to the dishonest conduct of attorneys in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

(2) The court noted that clients' new counsel was able to persuade the court to set aside the foreclosure sale.

(3) In addition, the Respondent acknowledged that her trust accounts were completely out of whack. She carried a negative balance and she had trust account checks returned for insufficient funds. She admitted she did not reconcile her trust accounts, did not keep individual client ledgers, and did not retain the bank statements for her trust accounts, all of which are required by state bar rules. In addition, she admitted her records were such a disaster that the trust accounts cannot be reconciled. She also acknowledged that she failed to cooperate with Office of Disciplinary Counsel as she failed to respond to the Notice of Full Investigation in this matter.