Sunday, June 25, 2017

Lawyer Faces Charge Of Breach Of Trust With Fraudulent Intent For Allegedly Pilfering $450K From Two Landlords; Money Meant To Be Used To Settle Now-Resolved Foreclosure Proceedings On 200+ Rental Units

In Charleston, South Carolina, The Post and Courier reports:
  • A suspended Charleston lawyer faces a felony charge for allegedly pocketing $450,000 from a real estate partnership that rents to low-income residents in North Charleston.(1)

    Two former clients of David Athell Collins watched during a bond hearing Thursday [June 8] as Collins said he’s focused on trying to repay them “to make this go away in a proper and legal manner.” The 55-year-old resident of Hoff Avenue in Charleston is charged with breach of trust with fraudulent intent.

    “This is something that’s been going on for almost a year now and we’ve finally gotten to the point where these gentlemen have pressed criminal charges against me, and I understand that,” Collins said via the video conferencing system at Charleston County Bond Court.

    Joseph Walters said he and his business partner, Tom Taylor, paid Collins $450,000 in February 2016 to settle foreclosure lawsuits involving properties they own in the Chicora-Cherokee neighborhood. They each paid $225,000. After four months of waiting for settlement documents, Collins told them he had taken the money, Walters said.

    A North Charleston Police Department incident report says Collins told investigators he invested the money in a business in Georgia.

    Collins took the men to a bank and repaid $63,000, but the remaining $387,000 is unaccounted for, Walters said.

    “We basically told him, ‘Look, all we really want is for our lawsuits to get handled. Give us our money back. Here’s a timeline on how you can do it,’ ” he said.

    In July 2016, Collins signed a confession of judgement agreeing to pay the men back. That same month, the S.C. Supreme Court placed Collins on interim suspension from practicing law.

    Walters said he’s not counting on seeing the money returned. A bigger issue, he said, is that Collins’ actions could have impacted the 200-something families he and Taylor rent to. The business partners eventually settled the civil action against them with the help of other attorneys.

    “What happened to us, that’s not the big picture. We were fortunate because we had good counsel that represented us and cleaned up this mess,” he said. "Somebody else, they may not be as fortunate as us."

    Collins’ attorney, Bill Thrower, said he didn't yet know how his client plans to repay the men.

    “It’s an ongoing civil matter, and I think these guys got — understandably so — I think they’re a little frustrated because restitution is going slower than what they’ve hoped for,” he said.

    Collins was released from jail on personal recognizance bond. He will be required to pay $25,000 if he doesn’t show up for his next court date.
Source: Suspended Charleston attorney charged after allegedly pocketing $450,000 from two clients.
(1) In South Carolina, the Lawyers Fund for Client Protection was established by the state Supreme Court and administered by the South Carolina Bar to reimburse clients for money or property mishandled by Bar members.

The Fund places a $40,000 maximum limit, per law client loss, on awards from the Fund. There is an aggregate maximum limit on awards involving one lawyer of $200,000.

For similar "attorney ripoff reimbursement funds" that sometimes help cover 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.