Criminal Charges Catch Up With Disbarred Attorney Who Lost Bar Ticket For Pilfering $130K Settlement Proceeds From Now-Deceased Client

In Albuquerque, New Mexico, the Albuquerque Journal reports:

• A lawyer disbarred for taking a $130,000 settlement he received on behalf of a Gallup restaurant owner has entered a not guilty plea to an indictment charging him criminally for the same conduct.
  
  The settlement was for property damages related to a drainage retention pond next to the business by the city of Gallup.
  
  Cody Kelley, 45, of Albuquerque waived his appearance at a May 6 arraignment but showed up in person for a scheduling conference last week before 2nd District Judge Alisa Hadfield on the charge of embezzlement over $20,000, a second-degree felony that carries a potential sentence of nine years in prison.
  
  ***
  Kelley failed to show up for the hearing before the New Mexico Supreme Court seeking his disbarment in June 2015, but a prosecutor from the New Mexico Disciplinary Board presented the case.
  
  Besides telling him he couldn’t practice law, the court ordered Kelley to pay restitution of $130,000 in the Gallup case and $3,500 in another case, as well as $1,066 in costs to the disciplinary board.(1)
  
  Kelley also failed to respond to charges filed against him by a disciplinary hearing committee.
  
  According to documents filed by the disciplinary board, defendants in the restaurant case filed on behalf of Susan Yurcic led to a settlement and four checks sent to Kelley’s law office in December 2013. Yurcic still hadn’t received any of the money when she died in February 2014, and her nephew was appointed personal representative of the estate.
  
  Kelley told the nephew, William Mataya, that the funds were in his trust account, but records subpoenaed by disciplinary counsel showed that none of it went there and that Kelley instead spent it. Mataya had to pay for repairs to the property himself.

Source: Disbarred lawyer pleads not guilty.

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 Client Protection Fund of the State of New Mexico is intended to promote public confidence in the administration of justice and the integrity of the legal profession by reimbursing losses caused by the dishonest conduct of lawyers admitted and licensed to practice law in the courts of New Mexico.

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:

• Directory Of Lawyers' Funds For Client Protection (now includes a listing for Canadian client protection funds, 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.

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.