Monday, March 07, 2016

Sticky-Fingered Real Estate Lawyer Gets Bar Boot For Pocketing Homebuyers' Purchase Deposits After Transactions Failed To Close, Refusing To Respond To Their Repeated Refund Requests

In Brooklyn, New York, the New York Law Journal reports:
  • A suspended Nassau County attorney who practiced for 31 years and who was the subject of six complaints to the grievance committee in 2013 and 2014 for mishandling client funds was disbarred [].

    According to court papers, Lester Mackey was suspended in July after he was found guilty of professional misconduct for misappropriating client funds;(1) conduct involving dishonesty, fraud, deceit and misrepresentation; and failure to cooperate with the grievance committee's investigation.

    In one complaint, a woman alleged that she was attempting to buy property in Queens from one of Mackey's clients in 2011, and that she put $50,000 down on the property, which was deposited in Mackey's Interest on Lawyer Account. After the seller was unable to abate several code violations against the property, she cancelled the contract, but Mackey did not respond to her requests to return the down payment.

    In another complaint, also in 2011, Mackey deposited a $20,000 down payment from Patricia Gayle, a prospective buyer of property owned by one of his clients. After the buyer was unable to obtain financing, she cancelled the sale and asked for repayment, but said Mackey did not respond to her repeated inquiries.

    After Gayle sued the seller, Mackey admitted that he used unrelated client funds from his IOLA to pay back Gayle's down payment.

    The Appellate Division, Second Department, wrote in Matter of Mackey, 2015-00808, that Mackey did not respond to three petitions filed against him by the Grievance Committee for the Tenth Judicial District.
Source: Attorney Who Admitted to Fraud Is Disbarred.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:
  • This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.

    There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.

    This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.
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(1) Clients found to have been victimized by a theft by a New York attorney may be able to seek some reimbursement for being screwed over by turning to the The Lawyers’ Fund For Client Protection Of the State of New York, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

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