Opinion ID: 1959580
Heading Depth: 1
Heading Rank: 2

Heading: IRM-Signet Funds

Text: IRM became hard pressed for cash while owned by Donahoe, largely because it was in default on a secured loan to MNC Credit Corp. Donahoe was willing to make an assignment in lieu of foreclosure if he could arrange for a sale of IRM by MNC Credit Corp. to a buyer under terms that would protect Donahoe from personal liability. He turned to Joseph C. Wortley, Jr. (Wortley) of Liberty Corner, New Jersey. In connection with Wortley's effort to buy IRM, an escrow account, held by Tomaino and a partner at Piper & Marbury, was established at a financial institution. W & G's Ethics and Conflicts Committee approved having the escrow held outside of the W & G Clients' Fund Account because another law firm was also serving as escrow agent. Wortley was ultimately able to purchase IRM from MNC Credit Corp. under circumstances whereby $100,000 from the joint agents' escrow fund was released. The entity in which Wortley took the assets of IRM was Liberty Engineering, Inc., a corporation formed for Wortley by Tomaino. The $100,000 from the escrow fund thereby became an asset of Liberty Engineering. In late November 1990 these funds were wired to W & G which disbursed $25,000 each to Donahoe and Wortley. The balance of $50,000 was transferred by W & G to a new escrow account at Signet Bank. That account was titled, Marc M. Tomaino, IRM Escrow Account. In February 1991 Tomaino closed the account at Signet and transferred the funds, then totaling $50,641.18 to his personal account at Legg Mason. In March Tomaino caused $35,641.18 to be disbursed from that account on the check of Legg Mason to W & G where it was credited in the Clients' Fund Account as a retainer from Liberty Engineering. Of the $15,000 balance, $5,000 was disbursed by Legg Mason in June 1991 for purposes that do not appear in the record. The remaining $10,000 was disbursed by Legg Mason in December 1991, after Tomaino had moved to Rochester, where it apparently was deposited in Tomaino's account at Chase Bank in Rochester. Tomaino testified that Wortley told him not to put the $50,000 into the W & G trust account and told him that he could give the $15,000 balance of that $50,000 to his mother-in-law as far as Wortley was concerned. In his exceptions Tomaino points out that Wortley made no claim to the funds when notified of their existence by Tomaino's present counsel. This is one of the group of transactions in which Judge Angeletti found a misappropriation by Tomaino. As explained in the IRM-Insurance Funds transaction, Judge Angeletti's finding of violation of MRPC 1.15 and of BOP § 10-306 is supported by the record.