66 East Main Street, 3rd Floor Little Falls, NJ 07424

Dishonest Lawyer – Stole Client’s Money, Filed False Reports and Files for Bankruptcy

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Background:

  • Lawyer represented a client in a divorce and a Chapter 13 bankruptcy.
  • Lawyer received $10,000 bank check payable to her client as part of divorce settlement.
  • Instead of turning the check over to her client, lawyer endorsed the check with her client’s name, kept more than $7,300 and sent a check to her client for the balance.
  • Now to make matters worse, lawyer files a false police report stating that her client had stolen $10,000 from her.
  • When asked during testimony, lawyer admitted she filed a false police report to cover her tracks of forgery.
  • The client was arrested based upon the false police report.
  • Client hired new counsel and filed an adversary complaint seeking to recover payments made to her former attorney and damages resulting from violation from automatic stay.

Court Ruling:

  • Initial attorney violated the automatic stay and awarded $12,500 in punitive damages to client.
  • Attorney violated Disciplinary Rules of Professional Conduct and was ordered to pay client $15,400 for the client’s wrongful imprisonment and other expenses she incurred.
  • To top all, the attorney filed for Bankruptcy.
  • Court ruled that the $27,920 was non-dischargeable in the lawyer’s bankruptcy,  keep in mind the Judge is the one overseeing the lawyer’s bankruptcy case.  
  • Court recommended that the attorney be disbarred and sent the matter to a further State Court.
  • Court issued writs of garnishment which led to a hold on funds Lawyer owed to client.
  • To add insult to injury, the lawyer decides to appeal the Judge’s ruling of her egregious conduct.  The lawyer also felt the Judge overstepped his bounds.
  • Appeal was denied.

Moral of story: lawyers are not above the law and be careful who you hire.   Hiring a Board-Certified lawyer is a good bar to set.