Opinion ID: 1536896
Heading Depth: 3
Heading Rank: 3

Heading: Unauthorized Use of Settlement Proceeds

Text: 11. Although the May and June Signet Bank account statements fail to show payments to three of the four medical providers, they clearly reflect the impermissible depletion of withheld settlement funds from the account. Checks 1061 and 1062 cleared on June 21, 1996, bringing the account balance to $670.20, well below the $2,330.12 (i.e., the $2,450.12 withheld minus the discharged $120.00 obligation to Capital Emergency Associates) Respondent was required to hold in trust to pay Ms. Fisher-Hammond's medical providers, plus the $24 he owed to Ms. Fisher-Hammond on account of the reduction of the Capital Emergency Associates payment. [4] Tr. 29-32; BX 6 at 1; But cf. Tr. 39-40 (evidence does not foreclose possibility that smaller invoices from P.G. Radiodiagnostic and Laurel Regional Hospital were paid after June 24, 1996 from remaining $670.20 of withheld settlement proceeds). 12. The disbursements leading to this shortfall were clearly for Respondent's own purposes rather than Ms. Fisher-Hammond's, with a number of checks made out to Cash or to third parties with no apparent relation to the case. BX 5, 6. By Respondent's own admission, the two checks (1061 and 1062) that immediately precipitated the shortfall pertain to another case. Tr. 239-242. Check 1061 is payable to an Antoine Thompson for Settlement in the amount of $900. BX 11-12. Check 1062 is made out to Cash in the amount of $1,600.00, with the notation Thompson-Reduced Fee in the Memo section. BX 6 at 13-14; see also Tr. 239-241 (Respondent's statement that $1,600.00 was fee relating to another case). 13. Ms. Fisher-Hammond had not authorized Respondent to use the funds for any purpose other than paying her medical providers. Tr. 59-61. [5] 14. Respondent concedes that these transactions resulted in a misappropriation of funds, Resp. Post-Hrg. Br. 7 (There is no dispute that Respondent misappropriated funds. . . .), and the Committee found and the Board affirms that Bar Counsel has established misappropriation by clear and convincing evidence. 15. In parts of his testimony, Respondent was adamant that he had actually paid Ms. Fisher-Hammond's medical providers. Tr. 238 (I remember writing these checks.), 239 (I wrote those checks. I know I wrote them.), 241 (At the time I wrote [the check that depleted the withheld funds], I had paid Ms. Hammond's providers.). In other parts of his testimony he appears to concede that that he might be mistaken in this regard or contends that clerical error may be at fault. Tr. 237-241, 281. He acknowledged that his bookkeeping practices were seriously inadequate, Tr. 242 (Well, I didn't really have a real bookkeeping system, because, one, I was really trying to do sports and entertainment.), and that he did not maintain any written record of his receipts and expenditures in respect of entrusted funds, Tr. 243 (So I was sort of more or less  I was tracking these in my head.). 16. The Committee found and the Board affirms that Respondent did not pay Maryland Orthopedics until his settlement of their invoice on February 14, 2006, two weeks prior to the evidentiary hearing in this matter, RX 4 at 2 (debt settled for $1,250.00, or roughly 50%), and has not paid Laurel Regional Hospital at all. [6] Respondent acknowledges that he failed to record any such payment, Tr. 282; could not identify the check number for any such payment, Tr. 281-283; could not produce a cancelled check reflecting such a payment, Tr. 281-283, 323-324, 338-340; and failed to maintain sufficient funds in the account to cover the payments if he had made them, Tr. 320-322. Although Respondent contends that the [Signet Bank] account was never in overdraft, Resp. Post-Hrg. Br. 13, it clearly would have been in overdraft if Respondent, having made the payments discussed above through checks 1061 and 1062, had also made the required payments to Ms. Fisher-Hammond's medical providers.