Opinion ID: 2395150
Heading Depth: 1
Heading Rank: 8

Heading: Summary of Charges

Text: The charges in this matter arise from proceedings of the Attorney Grievance Commission of the State of Maryland. Acting pursuant to the provisions of Maryland Rule BV IX on behalf of the Commission, Bar Counsel filed a petition with the Court of Appeals of Maryland seeking disciplinary action against Ray Velasquez, a member of the Maryland Bar. The petition alleged that Velasquez violated DR 1-102(A)(1), (3), (4), (5), (6), which states that a lawyer shall not engage in illegal conduct involving moral turpitude, dishonesty, fraud, or misrepresentation, or conduct that is prejudicial to the administration of justice, or any other conduct that adversely reflects on his fitness to practice law, DR 9-102(A), which prohibits a lawyer from commingling funds of his separate clients, and DR 9-102(B)(3), (4), which requires that a lawyer maintain complete records with respect to the receipt and disbursement of clients' funds coming into his possession. The matter was referred for hearing to a trial judge of the Seventh Judicial Circuit of Maryland. The facts pertaining to Velasquez's activities are not in dispute. Respondent was admitted to the Maryland Bar in 1963 and the Bar of the District of Columbia in 1972. In 1974, Mr. Velasquez formed a partnership with Joseph A. Finlayson, Jr. Five years later, Mr. Finlayson developed a severe alcoholism problem. As Mr. Finlayson's drinking problem worsened, his absences from the firm became more frequent. His ability to contribute to the financial support of the law practice also declined. In 1982, Mr. Finlayson was brought before the Maryland Court of Appeals on charges of misconduct, including neglect of his clients' interests and was suspended indefinitely, with the Court taking note of the special circumstances of his alcoholism. See 293 Md. 156, 442 A.2d 565 (1982). During this period, Mr. Velasquez faced the difficult tasks of holding the partnership together, serving the firm's clients, and meeting financial responsibilities to the firm's creditors. The income of the partnership steadily decreased until regular payments to the firm's creditors became impossible. Respondent made attempts to negotiate payment plans with the firm's creditors to satisfy the indebtedness owed to them by Messrs. Finlayson and Velasquez. Some accepted his offer; others rejected it. In 1979 certain creditors placed a lien on the partnership's bank account as well as Mr. Velasquez's administrative account. In an effort to save the law firm and to continue his representation of existing clients, Mr. Velasquez deposited personal and business funds into his client's escrow account and used that account to carry on the firm's business. By 1984, Mr. Velasquez had succeeded in making full payment to virtually all of the firm's former creditors. The remaining creditors agreed to payment schedules. In November, 1982, Mr. Velasquez received a check from an insurance company in settlement of a client's claim. Mr. Velasquez deposited the proceeds of the check in the escrow account and wrote a check to the client for her share of the amount. He agreed with the client to pay her physician's bill out of the remaining amount. In December, 1982, Velasquez provided the doctor with a check drawn on the escrow account. At the time the check was presented to the bank for payment, however, the balance of the escrow account was insufficient to cover the check. Three months later Mr. Velasquez made full payment to the client's physician in the form of a treasurer's check. At no time did Respondent's client ask for the funds owed to the doctor nor did she request that Respondent pay the doctor prior to March, 1983. The record demonstrates that Respondent knowingly, albeit misguidedly, utilized the escrow account to carry out the firm's business. Although Respondent was successful in utilizing this scheme to satisfy outstanding debts with creditors and to keep the firm afloat, he admits, and the Court of Appeals found, that his actions clearly violated the disciplinary rules of Maryland. At the evidentiary hearing, the judge filed his findings of fact and conclusions of law based upon stipulations of facts and evidence presented at the hearing. Mr. Velasquez represented himself throughout the disciplinary proceedings. The trial judge found that, although Respondent had violated DR 9-102(A) by commingling his clients' funds and DR 1-102(A)(4) by concealing his firm's assets from its creditors, Respondent had not engaged in any act of fraud or moral turpitude. In addition, the trial judge concluded that Respondent had not violated DR 9-102(B)(3) or (4) since there was no evidence that payment had ever been demanded of Respondent by his client at any time.