Opinion ID: 2559391
Heading Depth: 3
Heading Rank: 2

Heading: Use of Client Trust Accounts as Personal and Business Accounts

Text: We agree with the Hearing Committee and the Board that Daniel violated Rule 8.4(c) by making dishonest statements to the IRS in his April 9, 2003, letter, in which he professed to have no open accounts (personal or business). Like Bar Counsel, however, we do not believe that the April 2003 letter was Daniel's only violation of Rule 8.4(c). Rather, we agree with Bar Counsel that Daniel's use of his client trust accounts as personal and business accounts to conceal his own money from the IRS was a separate and additional violation of Rule 8.4(c). Bar Counsel's exceptions to the Hearing Committee's report gave Daniel sufficient notice that he was seeking to prove two distinct violations of Rule 8.4(c). See In re Kanu, 5 A.3d 1, 7 (D.C.2010). Designating the 329 account as an IOLTA account naturally gave rise to the inference that it would hold client funds. See Disciplinary Counsel v. Wise, 108 Ohio St.3d 381, 843 N.E.2d 1198, 1200 (2006). But not only did the 329 account largely not hold client funds, the Hearing Committee found that the reason the account held Daniel's own funds was so that the funds would not be seized by the Internal Revenue Service. The taxpayer information number (TIN) on an IOLTA account must not be the lawyer's TIN; all D.C. IOLTA accounts bear the TIN of the D.C. Bar Foundation. See D.C. Bar Found., Bank Frequently Asked Questions, http://www.dcbarfoundation.org/index.php/banking-on-justiceiolta-program/for-banks/bank-frequently-asked-questions (last visited Jan. 10, 2011). The TIN reporting structure for IOLTA accounts thus facilitated the concealment of Daniel's personal money, which is exactly the behavior we have noted can give rise to a Rule 8.4(c) violation, at least when committed with dishonest intent. Cf. In re Rivlin, 856 A.2d 1086, 1096 (D.C.2004) (Appendix, Board Report) (It is difficult to conclude that Respondent was using his trust account to hide funds from the IRS when he was using that same account to pay the IRS's lien.). Moreover, not only was Daniel's use of his IOLTA account to hide money from the IRS covert, but it clearly was done with a dishonest intent, here an intent to hide the lawyer's personal assets. Id. Thus, the key factor is dishonest intent, which the Hearing Committee found. Moreover, our agreement with Bar Counsel that Daniel committed two violations of Rule 8.4(c) through his (mis)use of accounts 329 and 676 to conceal his personal and business assets from the IRS is not double-counting. The violation found by the Hearing Committee and the Board was based on the single letter of April 9, 2003, that Daniel sent to the IRS and in which he claimed that he had no personal or business accounts even though both accounts 329 and 676 contained his personal and business funds. Beyond that single instance of violating Rule 8.4(c), however, Bar Counsel also introduced exhibits showing that Daniel violated the same rule by using these accounts for personal and non-client business as early as 2000 and continued to use his 676 trust account as a personal bank account until at least November 30, 2005.