Title: In re McGinn

State: vermont

Issuer: Vermont Supreme Court

Document:

In re McGinn  (2005-237); 178 Vt. 604; 877 A.2d 688

[Filed 28-Jun-2005]

                                ENTRY ORDER

                                2005 VT 71

                     SUPREME COURT DOCKET NO. 2005-237
     
                              JUNE TERM, 2005

  In re E. Michael McGinn, Esq.    }   Original Jurisdiction
                                   }
                                   }   APPEALED FROM:
                                   }
                                   }   Professional Responsibility Board  
                                   }
                                   }   PRB File Nos. 2005.069, 2005.080,
                                   }                 2005.094

       In the above-entitled cause, the Clerk will enter:

       ¶ 1.   The entry order issued on June 22, 2005, in the above-captioned
  case is withdrawn, and the following is issued in its place: 

       ¶ 2.   Attorney E. Michael McGinn has filed an affidavit of
  resignation pursuant to Rule 19(A) of Administrative Order No. 9.
  Disciplinary counsel has submitted an additional Statement of Facts and
  Memorandum of Law recommending acceptance of attorney McGinn's resignation. 
  Having reviewed the filings, the Court finds clear and convincing evidence
  that attorney McGinn violated Rules 8.4(b), (c), (d), and (h) of the
  Vermont Rules of Professional Conduct.  Accordingly, attorney McGinn's
  resignation from the Bar of the Vermont Supreme Court is accepted.  We
  hereby order that E. Michael McGinn is disbarred on consent from the office
  of attorney and counselor at law. 

       ¶ 3.   Attorney McGinn shall comply with the requirements of A.O. 9,
  Rule 23. 

       FOR THE COURT:

       _______________________________________
       Paul L. Reiber, Chief Justice 
       _______________________________________
       John A. Dooley, Associate Justice
     
       ________________________________________
       Denise R. Johnson, Associate Justice
    
       ________________________________________
       Marilyn S. Skoglund, Associate Justice

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77 PRB

[Filed 16-Jun-2005]
        
                              STATE OF VERMONT
                      PROFESSIONAL RESPONSIBILITY BOARD

  In re:    E. Michael McGinn, Esq.
            PRB Docket Nos. 2005.069, 2005.080, and 2005.094

                              Decision No.  77

       Upon receipt of the Affidavit of Resignation submitted to the Board
  and pursuant to Administrative Order No. 9, Rule 19, we recommend to the
  Court that the above referenced Respondent be disbarred.   Attached hereto
  are the Affidavit of Resignation, Disciplinary Counsel's Statement of
  Additional Facts, Disciplinary Counsel's Memorandum of Law and a Proposed
  Entry Order.

       Dated at Montpelier, Vermont this   16th   day of June, 2005.

  /s/
  _________________________
  Joan Loring Wing, Esq. - Chair

  attachments

  cc:   Peter F. Langrock, Esq., counsel for E. Michael McGinn, Esq.
        Michael Kennedy, Disciplinary Counsel

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                              STATE OF VERMONT
                      PROFESSIONAL RESPONSIBILITY BOARD

  In Re:   E. Michael McGinn, Esq., Respondent
           PRB File Nos. 2005.069, 2005.080, and 2005.094

                        Statement of Additional Facts

       NOW COMES Michael Kennedy and, pursuant to Rule 19B of Administrative
  Order 9, submits this Statement of Additional Facts.

  I.   Criminal Conduct
  
       1.   The Respondent, E. Michael McGinn, is an attorney licensed to
  practice law in the State of Vermont.  Attorney McGinn's license to
  practice law was suspended on an interim basis in October of 2004.
  
       2.   On May 4, 2005, the United States Attorney for the District of
  Vermont filed  an Information that charged Attorney McGinn with committing
  mail fraud in violation of 18. U.S.C. § 341.  The crime is a felony.  A
  copy of the
  
       Information is attached as Exhibit A. 3.   The Information alleged
  that as "an attorney who represented clients in real estate transactions,
  MCGINN frequently received funds that represented the proceeds of those
  transactions."  (Exhibit A, para. 2).
  
       4.   The Information goes on to allege that: 

       "Beginning in approximately 1998, and continuing until
       October 2004, MCGINN misappropriated and diverted to his own
       use and benefit a portion of the funds that were entrusted to
       him in the course of his real estate practice.  In an attempt
       to cover up these embezzlements, MCGINN used funds he
       received in connection with later transactions to pay out
       moneys owed on earlier transactions.  In the course of 
       executing this scheme, MCGINN used the United States mails
       and commercial carriers."  (Exhibit A, para. 3).
  
       5.   The Information concludes by alleging that when Attorney McGinn's
  license to practice law was suspended on an interim basis, there was a
  shortfall in hist trust account of approximately $650,000.00.  (Exhibit A,
  para. 4).
   
       6.   On May 4, 2005, Attorney McGinn filed a plea agreement in which
  he pled guilty to the Information. A copy is attached as Exhibit B.
  
       7.   In entering into the agreement, Attorney McGinn acknowledged that
  he understood that he was pleading guilty to mail fraud and, in addition,
  that he was guilty of mail fraud.  (Exhibit B, paras. 2-3).  
  

       8.   Attorney McGinn has yet to be sentenced.
  
       9.   Each of the transactions described below took place in the course
  of  Attorney McGinn's scheme to misappropriate and divert funds that were
  entrusted to him in the course of his real estate practice.  Attorney
  McGinn's misconduct is exemplified by, but not limited to, the transactions
  described below.
  
  A.   The Dudley/Hebert Transaction

       10.   In 2004, William & Kathy Dudley agreed to purchase a home from
  Chris and Daffney Hebert for approximately $234,000.  The closing took
  place on September 27, 2004.  Attorney McGinn represented the Dudleys. 

       11.   In advance of the closing, the Dudleys provided Attorney McGinn
  with a check for $234,9000.  Attorney McGinn deposited the check into an
  account at the Peoples Trust Company.  12.   At the time of the closing,
  the Chittenden Bank held a mortgage on the Heberts' property.  The Heberts
  owed the bank approximately $103,000.  

       13.   The closing was held on September 27, 2004.  At the closing,
  Attorney McGinn issued several trust account checks, including (1) a check
  to Mr. Hebert in the amount of $58,160.19 (his net proceeds from the sale);
  (2) a check to Mrs. Hebert in the amount of $58,160.19 (her net proceeds
  from the sale); (3) a check to the Chittenden Bank in the amount of
  $103,979.55 (intended to payoff the Dudleys' mortgage); and (4) a check to
  Coldwell Banker Choice Properties for $9,004 (the amount owed to the real
  estate broker).  

       14.   Each of the checks was issued against Attorney McGinn's trust
  account at Charter One Bank.  That is, he did not issue the checks against
  the same account into which he had deposited the Dudleys' funds.

       15.   Each check bounced and was not paid due to insufficient funds. 

       16.   Attorney McGinn misappropriated the funds advanced to him by the
  Dudleys. To date, Attorney McGinn has not accounted for the Dudleys' funds
  and has not made good on any of the checks issued at the closing.

  B.   The Miner/Bailey Transaction

       17.   Attorney McGinn represented John Bailey in connection with three
  real estate closings that took place on August 6, 2004.  In the first two,
  Mr. Bailey sold property, earning net proceeds of $76,000. 

       18.   At the closing, Attorney McGinn issued Mr. Bailey a trust
  account check for $35,000.  Upon presentation, the check was honored.   Mr.
  Bailey left the remaining $41,000 with Attorney McGinn to use as a down
  payment on a home that he was to purchase later that day from Rick Miner.  

       19.   Mr. Bailey had agreed to purchase Mr. Miner's property for
  $275,000.  He intended to use $41,000 from the proceeds of the morning
  sales as a down payment.  Mr. Bailey took out a mortgage for the balance -
  $234,000.  Mr. Bailey caused his lender to wire $234,000 to Attorney
  McGinn's trust account. 

       20.   The closing on the Bailey/Miner transaction took place on August
  6, 2004. At the time, Mr. Miner owed approximately $218,000 on the
  property.  Wells Fargo held a first mortgage in the amount of $193,000, and
  a home equity loan in the amount of $25,000.  Attorney McGinn was to pay
  off each note with the funds advanced to him by Mr. Bailey, with the
  balance to be paid to Mr. Miner.

       21.   At the closing, Attorney McGinn issued Mr. Miner a trust account
  check in the amount of $39,000 - his net proceeds from the sale.  The check
  was honored.  Attorney McGinn eventually issued trust account checks to
  Wells Fargo that were intended to pay off Mr. Bailey's mortgage and home
  equity loan.  Each check bounced and was not paid due to insufficient
  funds. 

       22.   Attorney McGinn misappropriated the funds that had been advanced
  to him by Mr. Bailey to pay off Mr. Miner's mortgage and home equity loan. 
  He has yet to make good on the funds. 

  C.   Attorney McGinn's Representation of Jim Lewis

       23.   Attorney McGinn represented Jim Lewis in connection with Mr.
  Lewis' purchase of real estate from Patricia and Steven O'Dell.  A closing
  was held on August 3, 2004.

       24.   In advance of the closing, Mr. Lewis issued a check made payable
  to  Attorney McGinn in the amount of $73,355.59.  Attorney McGinn was to
  use the funds to pay of the sellers' mortgage and other costs associated
  with the closing.  At the time of the closing, the United States Department
  of Agriculture (hereinafter "USDA") held a mortgage on the O'Dells'
  property in the amount of $69,301.98.

       25.   At the closing, Attorney McGinn issued a trust account check in
  the amount of $69, 301.98 made payable to the USDA.  The check was drawn on
  Attorney McGinn's trust account at Charter One.  The check bounced and was
  not paid due to insufficient funds.     26.   Attorney McGinn
  misappropriated the funds that Mr. Lewis advanced to him. To date, Attorney
  McGinn has not accounted for, or made good on, the funds that Mr. Lewis
  advanced to him.
   
       27.   Eventually, the USDA threatened to foreclose on the property
  that Mr. Lewis had purchased from the O'Dells.  Despite having previously
  advanced over $70,000 to Attorney McGinn, Mr. Lewis was forced to secure
  additional financing in the amount of $69, 301.98 in order to pay off the
  USDA and avoid foreclosure.

  D.   Tony Neyto & The Estate of Gabrielle Tynauer

       28.   Attorney McGinn represented Tony Neyto in connection with Mr.
  Neyto's purchase of real estate from the Estate of Gabrielle Tynauer.  In
  anticipation of the purchase, Mr. Neyto took out a loan against property
  that he owned in Massachusetts.  Then, Mr. Neyto entrusted $144,253.00 to
  Attorney McGinn.  The funds were to be used to pay off an existing mortgage
  held by Wendover Financial Services Corporation (hereinafter "Wendover")
  and other costs associated with the closing.  At the time of the closing,
  the amount due to pay off Wendover's mortgage was $80,647.96.

       29.   The closing took place on August 11, 2004.  At the closing,
  Attorney McGinn issued several checks drawn on his account at Charter One
  to pay certain costs associated with the transaction.  With the exception
  of a trust account check made payable to Wendover, each check was good. 
  However, a trust account issued to Wendover in the amount of $80,647.96
  bounced and was not paid due to insufficient funds.  

       30.   On September 21, 2004,  Attorney McGinn issued another trust
  account check made payable to Wendover in the amount of $80,647.96.  The
  check bounced and was not paid due to insufficient funds.

       31.   On October 15, 2004, Attorney McGinn issued yet another trust
  account check made payable to Wendover in the amount of $80,647.96.  The
  check bounced and was not paid due to insufficient funds.
   
       32.   Of the funds entrusted to him by Mr. Neyto, Attorney McGinn
  misappropriated the $80,647.96 that was intended to pay off the mortgage
  that Wendover held on the property owned by the Estate of Gabrielle
  Tynauer.  To date, Attorney McGinn has neither accounted for nor made good
  on the funds.

  E.   Smith/Smith Transaction

       33.   Attorney McGinn represented Terrence Smith in connection with
  Mr. Smith's purchase of real estate from his sister, Fern Smith.  

       34.   At closing, the parties agreed that $35,000 would be placed in
  escrow.  The parties agreed that Attorney McGinn would act as the escrow
  agent and that the funds would be released to Ms. Smith upon such time as
  she vacated the property and requested the funds. 35.   Ms. Smith has
  vacated the property and requested the funds. Attorney McGinn
  misappropriated the $35,000 his own use.  The entire amount has been
  dissipated and is not available to be paid to Ms. Smith. 

  F.   Gervais/Gendron Transaction

       36.   Attorney McGinn represented Marcel and Donna Gervais in
  connection with their purchase of property from Armand and June Gendron.

       37.   At the closing, an issue arose relating to whether the Gendrons
  owed money to the Vermont Department of Taxes.

       38.   The parties agreed that $5,000 would be placed in escrow and
  would be held by Attorney McGinn pending resolution of the question as to
  whether the Gendrons owed money to the Department of Taxes.

       39.   Attorney McGinn misappropriated the $5,000 for his own use.  The
  money is not available to be paid either to the Gendrons or the Department
  of Taxes.
   
  G.   Shortfall in the Trust Account

       40.   At the time that Attorney McGinn's license to practice law was
  suspended on an interim basis, there was a shortfall in his trust account
  of approximately $650,000.

       41.   The shortfall resulted from the fact that Attorney McGinn
  misappropriated approximately $650,000 in funds that had been entrusted to
  him by clients or on their behalf.

       DATED at Burlington, Vermont, on July 7, 2005

       /s/
  _________________________         
  Michael Kennedy               
  Disciplinary Counsel
  32 Cherry Street, Suite 213
  Burlington, Vermont 05403    
  (802) 859-3000
   
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                              STATE OF VERMONT
                      PROFESSIONAL RESPONSIBILITY BOARD

  In Re:   E. Michael McGinn, Esq., Respondent
           PRB File Nos. 2005.069, 2005.080, and 2005.094

                              Memorandum of Law

       NOW COMES Disciplinary Counsel Michael Kennedy and submits this
  Memorandum of Law in support of his position that the Statement of
  Additional Facts, which is incorporated by reference herein, supports a
  finding that the Respondent violated the Vermont Rules of Professional
  Conduct.

  I   Rule 8.4(b) of the Vermont Rules of Professional Conduct

       Rule 8.4(b) prohibits attorneys from engaging in conduct involving a
  serious crime. The Rule defines a "serious crime" as "illegal conduct
  involving any felony", as well as certain types of lesser crimes. In May of
  2005, the United States Attorney charged Attorney McGinn with committing
  mail fraud mail fraud in violation of 18. U.S.C. § 1341.  (Exhibit A).  The
  crime is punishable by up to twenty years in prison.  18 U.S.C. § 1341.  As
  such, mail fraud is a felony.  See  18 U.S.C § 3559(a). Rule 8.4(b)
  prohibits "conduct".  As such, neither a conviction nor criminal charges
  are necessary for there to be a violation of Rule 8.4(b).  See People v.
  Odom,