Saturday, July 23, 2016

Another Aging Attorney Bows Out On Career-Ending Low As Feds Unseal Indictment Against Him Three Days After Bar Grievance Committee Yanks Law License; Theft/Income Tax Charges Center Around Alleged Pilfer Of An $850K Real Estate Deposit From Prospective Buyer

From the Office of the U.S. Attorney (White Plains, New York):
  • Preet Bharara, the United States Attorney for the Southern District of New York, [and two other high-ranking Feds], announced [] the unsealing in White Plains federal court of a six-count Indictment of former Orange County Attorney JOSEPH G. SCALI for mail fraud, structuring cash transactions, obstructing the IRS, tax evasion, obstruction of justice, and perjury. SCALI was arrested this morning and is expected to be arraigned in federal court in White Plains this afternoon.
    According to the Indictment and other court filings related to this matter:

    From January of 2011 through August 28, 2012, SCALI, who represented the seller of two tracts of land in Pennsylvania, schemed to defraud the prospective purchaser of that real estate of the $850,000 the latter had given to him to hold in escrow by misappropriating those funds from his attorney trust/escrow account.(1)  Additionally, the Indictment charges SCALI with structuring approximately $32,000 of cash deposits to that account.
    SCALI, 67, of West Hartford, Connecticut, is charged with one count of mail fraud, which carries a maximum sentence of 20 years in prison; on count of structuring cash transactions, which carries a maximum sentence of five years in prison; one count of obstructing the IRS, which carries a maximum sentence of three years in prison; one count of tax evasion, which carries a maximum sentence of five years in prison; one count of obstruction of justice, which carries a maximum sentence of 10 years in prison; and one count of perjury, which carries a maximum sentence of five years in prison.

See also, the Times Herald-Record: Town of Wallkill lawyer disbarred for professional misconduct:
  • A judicial grievance committee has disbarred Town of Wallkill lawyer Joseph G. Scali, issuing a scathing decision [] that sustained 49 charges of professional misconduct against him.

    The Grievance Committee for the Appellate division, Second Department of state Supreme Court rejected Scali's January attempt to resign from the bar ahead of the disciplinary finding, choosing instead to disbar him. He is also ordered to refrain from practicing law in any form, appearing as a lawyer in any court. giving legal advice or holding himself out as a lawyer.

    The disbarment is the conclusion of a disciplinary process against Scali that's been ongoing since 2011.

    The Grievance Committee wrote that Scali engaged in serious misconduct, misappropriating client money from his escrow accounts, mingling client and personal funds, failing to keep or provide proper financial records, and failing to cooperate with the committee's investigation. Scali had already racked up eight admonitions and six letters of caution for similar misconduct, the committee wrote.
(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.

    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.

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