Sunday, April 24, 2016

Upstate NY Lawyer Gets Bar Boot While Awaiting Sentencing For Pleading Guilty To Fleecing Over $1 Million From Clients

In Albany, New York, The Troy Record reports:
  • A local attorney who once worked for state Attorney General Eric Schneiderman has been formally disbarred after admitting to charges related to allegations she stole more than $1 million from clients.

    The Appellate Division of state Supreme Court issued an order [] confirming the disbarment of Marcia J. Doyle Stallmer, 51, after she pleaded guilty in Albany County Court in March to felony counts of third-degree criminal tax fraud and first-degree scheming to defraud. Under terms of the deal, she faces as much as three years in prison when she is sentenced May 4.

    According to the Albany County District Attorney’s Office, which prosecuted the case, Doyle Stallmer stole from clients, including family and friends, from 2008 to 2012 by asking for short-term loans — often in the name of her family’s Troy law firm, now known as Fowler, Doyle, Spain, Spiess & Florsch — for fictitious real estate transactions. She promised high returns and short turnaround times, prosecutors said, but began to use money stolen from some victims to repay others.
For the story, see Averill Park attorney disbarred after plea in embezzlement case.

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.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.
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(1) The Lawyers’ Fund For Client Protection Of the State of New York manages and distributes 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 New York 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.