3 Lessons From an Elder Law Attorney's Disbarment Over Client Funds
Remember that 2011 movie "Win Win," where probate attorney Paul Giamatti tells the court that he'll become an elderly man's caretaker, and in return he'll receive money for doing so from the man's estate? Then he sticks the guy in a home and pockets the cash.
Ah, how life imitates art. That sort of happened to a Maryland elder law attorney, except, unlike Paul Giamatti, he got disbarred. What are some of the obvious professional responsibility lessons to come from this? Here are three:
1. Don't Intermingle Your Business With Your Client's Business.
Though a skilled lawyer recognized by many bar associations, Michael C. Hodes' downfall began with a will executed by client Gloria Ominsky. In 2009, Hodes' firm drafted a will naming Hodes her personal representative, trustee, and giving him durable power of attorney.
As Ominsky's health got worse, her life and Hodes' intersected more and more. Paralegals at the law firm ran errands for her, and when that became expensive (he was billing them out at $275 an hour to pay her bills and handle her pharmacy visits), he billed out his wife at $25 an hour. Prior to Ominsky's death, a few transactions raised suspicion: Hodes reimbursed himself for buying gas, and Mrs. Hodes got reimbursed for a parking ticket -- though she claimed she out on behalf of Ominsky when she got the ticket.
After Ominsky's death in 2011, things got shadier. Hodes wrote two checks to himself after Ominsky's death, then backdated them to make them appear to have been written before her death on February 20. These checks were to a separate entity, Hodes' financial consulting company, even though Ominsky never agreed to do business with that company.
2. Don't 'Loan' Money to Yourself From Client Funds.
The residue of the estate went to a testamentary trust. If Ominsky's sister, Elaine, predeceased her, then the will required Hodes to establish a charitable foundation and distribute the trust to the foundation. Hodes named himself president and treasurer of the foundation and his wife the only other board member. Hodes then liquidated the trust and placed it into his escrow account because ... well, no one's sure.
The trust then "loaned" $270,000 to an art gallery Hodes and his wife owned. Hodes then transferred this loan money from the art gallery account to his and his wife's personal checking account, which at the time had a negative balance. This little tidbit allowed the court to infer that the "loan" was unrelated to the trust's activity and super related to paying Hodes' debts.
3. You're a Lawyer 24/7.
The court was utterly unpersuaded by the argument that, even if Hodes had wrongfully taken money from the trust, he did so in his personal capacity as the trustee and not in his capacity as a lawyer. Attorneys who have taken personal responsibility class (which is to say, all of us) will recognize this argument as unconvincing. Licensed attorneys are required to adhere to the rules of professional responsibility in all aspects of their professional lives, even when they're not acting as lawyers.
The court sustained Hodes' disbarment, finding that his case was particularly egregious given that he "had embodied a dishonest and selfish motive, engaged in a pattern of misconduct, [and] committed multiple offenses." So that's how you get disbarred.
- Maryland Court of Appeals Confirms Disbarment of "Elder Law" Attorney (Elder Law Prof Blog)
- Hodes: Disbarment Didn't Matter (The Daily Record)
- L.A. Deputy City Atty. Faces Child Porn Charges, Still Licensed (FindLaw's Strategist)
- Defense Lawyer Dresses as Thomas Jefferson for Discipline Hearing (FindLaw's Greedy Associates)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.