2-Month Law License Suspension For Attorney Who Gave Business Client The Jerk-Around In Response To Request For Return Of Over $400K In Cash That Was Supposed To Be Held In Escrow; Client Forced To File Lawsuit To Recover Money

In Somerset, Kentucky, the Commonwealth Journal reports:

• A local attorney has been suspended from practicing law for approximately two months following an order by the Supreme Court of Kentucky.
  
  Dan Thompson, a local personal injury attorney who also previously served as Burnside City Attorney earlier in the decade, was the subject of what was termed an “agreed upon disciplinary sanction” in the written opinion.
  
  The ruling was entered on Thursday, dated August 25, 2016, and signed by Chief Justice John D. Minton, Jr.
  
  The suspension is for 181 days; however, the order calls for 120 of those days to be suspended for a period of two years under the condition that Thompson commit no further ethical violations during that time, meaning Thompson is ultimately penalized only 61 days.
  
  According to the court document, Mabab Trade, LLC, entrusted Thompson with $775,000 to be used in connection with a proposed investment transaction between that company, an individual named Jason Castenir, and four other investors, placing the funds into Thompson’s office escrow account.
  
  “About seven weeks later, Mabab requested the return of the funds in their entirety,” reads the document. “An attempt to wire the escrow funds back to Mabab was unsuccessful due to a lack of funds in (Thompson’s) escrow account. At the time of the refund request, the escrow account contained a balance of approximately $373,131.13.”
  
  Thompson wired the company $300,000 about two weeks later and an additional $47,000 another two weeks or so after that, according to the document; the remaining amount of money, $427,500, was eventually returned to Mabab from an entity called Maverick Asset Management, which had originally received the funds from the escrow account via a transfer initiated by Castenir, it read.
  
  Thompson, according to the court, had given Castenir, who not an attorney, access to the account with instructions to obtain prior approval from him before making any transfers, but Castenir did not do so before initiating the fund transfer to Maverick, according to the document.
  
  The document stated that Thompson “falsely told the manager of Mabab that the funds were secure even though a portion of the funds had already been transferred to Maverick Asset Management; falsely told him that the escrow account could not be accessed temporarily due to an audit when, in fact, there was no audit; and falsely told him that the funds were ‘tied up’ due to a pending lawsuit in Texas when, in fact, there was actually no such lawsuit.”
  
  Mabab filed a lawsuit against Thompson and others in connection with the incident, and the case was eventually settled, with Thompson’s portion being $95,000, which he paid, according to the court. Thompson has fully complied with his obligations under the settlement.
  
  The document stated that the Inquiry Commission charged Thompson with violating multiple Supreme Court Rules (SCR), including SCR 3.130(1.15)(a) (failure to maintain funds in escrow); SCR 3.130(5.3(b) (inadequate supervision of a non-lawyer); and SCR 3.130(8.4)(c) (dishonest, fraud, deceit, or misrepresentation).
  
  “Thompson admits that his conduct as described above violates the rules as charged by the Inquiry Commission, and we accordingly hold that the Movant violated the rules as just described,” stated the court in the document.
  
  Thompson is also ordered to notify in writing all courts in which he has matters pending of his suspension, as well as notifying his clients of his inability to represent them and of their need to retain new counsel.
  
  The Commonwealth Journal attempted to contact Thompson for comment on Saturday, but did not receive a response by presstime.

Source: Local attorney agrees to suspension of practice.

For the court's opinion and order, see Thompson v. Kentucky Bar Association, 2016-SC-000262-KB (Ky. August 25, 2016).