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Attorney Grievance Commission v. Jerold K. Nussbaum, Misc. Docket, AG No. 3 8, September Term 2006. [Maryland Rules of Professional C onduct, 1.15 (a), (b) and (c) (Saf ekeep ing Pro perty), 8.1 (a) (Bar Admission and Disciplinary Matters), 8.4 (b), (c) and (d) (M isconduct); Maryland Rules 16-607 (Comm ingling of Fun ds) and 16 -609 (Pro hibited Tra nsactions); S ection 10-306 of the Business Occupations and Professions Article (Misuse of Trust Money); held: Respondent repe ated ly violated MRPC 8.4 (b), (c) and (d) by willfully misappropriating client funds. Respondent violated MRPC 8.1 (a) by submitting altered ledgers to Assistant Bar Counsel which purported to have been made contemporaneously with the transactions in the escrow account but which were actually made after the fact and did not accurately reflect Respondent's handling of client funds. Respondent repeatedly violated MRPC 1.15 (a) and (c), Maryland Rule 16-609, and Section 10-306 of the Business Occupations and Professions Article by improperly withdrawing client funds, including monies for legal fees or expenses, from his escrow account for his own use, for the use of other clients, or for use of a third party. Respondent violated MRPC 1.15 (b) and Maryland Rule 16-607 by depositing personal loans and rents into his escrow account. For these violations, Responden t shall be disbarred.]

IN THE COURT OF APPEALS OF MARYLAND

Misc. Docket AG No. 38 September Term, 2006

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. JEROLD K. NUSSBAUM

Bell, C.J. Raker Harrell Battaglia Greene Wilner, Alan M. (retired, specially assigned), Cathell, Dale R. (retired, specially assigned), JJ.

Opinio n by Batta glia, J.

Filed: October 15, 2007

The Attorney Grievance Commission of Maryland ("Petitioner"), acting through Bar Counsel and pursuant to M aryland Rule 16-751 (a), 1 filed a petition for disciplinary or remedial action a gainst R espon dent, Je rold K . Nussb aum, on September 6, 2006. Bar

Counsel alleged that R esponde nt violated M aryland Rule s of Profe ssional Conduct ("MRPC "), 1.15 (Safekeepin g Property), 2 8.1 (Bar Admission and Disciplinary Matters), 3

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Maryland Rule 16-751 (a) provides: (a) Comm encem ent of discip linary or remedial action. (1) Upon approval of [the Attorney Grievance] Commission. Upon approval or direction of the [Attorney Grievance] Commission, Bar Counsel shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals.

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Rule 1.15 provides in relevant pa rt: (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's ow n property. Fu nds shall be kept in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules. Other property shall be identified as such and appropr iately safeguarded. Complete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. (b) A lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for the purpose. (c) Unless the client gives inf ormed co nsent, conf irmed in writing, to a different arrangement, a lawyer shall de posit into a client trust account legal fees and expense s that have b een paid in advance, to be w ithdrawn by the lawyer only as fees are earned or expenses incurred. (d) Upon re ceiving fu nds or othe r property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise (contin ued...)

and 8.4 (Miscondu ct),4 as well as Maryland Rule 16-607 (Com mingling of Fun ds),5 Maryland Rule 16-609 (P rohibited Transactions), 6 and Section 10-306 of the Business

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(...continued) permitted by law or by agreement with the client, a lawyer sh all promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a ful l accounting rega rding suc h pro perty. Rule 8.1 p rovides in re levant part: An applicant for admission or reinstatement to the bar, or a lawyer in con nection w ith a disciplinary m atter, shall not: (a) kno wingly m ake a f alse state ment o f mater ial fact . . . .

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Rule 8.4 p rovides in re levant part: It is professional misconduct for a lawyer to: * * *

(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice . . . .
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Maryland R ule 16-60 7 provide s in relevant p art: (a) General prohibition. An attorn ey or law firm may depos it in an attorney trust account only those funds required to be deposited in that account b y Rule 16-60 4 or perm itted to be so deposited by section b. of this Rule.

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Maryland Rule 16-609 states: An attorney or law firm may not borrow or pledge any funds (contin ued...) 2

Occupations and Professions Article, Maryland Code (2000, 2004 Repl. Vol.) (Misuse of Trust Mone y).7 In accordance with Maryland Rules 16-752 (a) and 16-75 7 (c), 8 we referred the petition to Judge Barry Hug hes of the Circuit Co urt for Carroll County for an evidentiary hearing and to make findings of fact and recommend conclusions of law. Ju dge Hu ghes held

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(...continued) required by these Rules to be deposited in an attorney trust account, obtain any remuneration from the financial institution for depositing any funds in the account, or use any funds for any unauthorized purpose. An instrument drawn on an attorney trust account may not be d rawn payable to cash o r to bearer.

Section 10-306 of the Business Occupations and Professions Article, Maryland Code (2000, 2004 Repl. Vol.), provides: A lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer.
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Maryland Rule 16-752 (a) states: (a) Order. Upon the filing of a Petition for Disciplinary or Remedial Action, the Court of Appeals may enter an order designating a judge of any circuit court to hear the action and the clerk responsible for ma intaining the record. The order of designation shall require the judge, after consultation with Bar Counsel and the attorney, to enter a scheduling order defining the extent of discovery and setting dates for the completion of discovery, filing of motions, and hearing. Maryland R ule 16-75 7 (c) states in p ertinent part: (c) Findin g and conclu sions. The judge shall prep are and file or dictate into the record a statement of the judge's findings of fact, including findings as to any evidence regarding remedial action, and conclusions of law. 3

a hearing on April 26, 2007, and issued Findings of Fact and Conclusions of Law on June 7, 2007, in which he found by clear and convincing evidence that Respondent had violated MRPC 1.15 (a) and (b), 8.1 (a), and 8.4 (c) an d (d), Maryland Rules 16-607 and 16-609, and Section 10-306 of the Business Occupations and Professions Article: FINDINGS OF FACT 1. Testimony "The Respondent graduated from the George Mason Law School in 1979, and began his legal career drafting legislation for the Maryland Legislature. He then became a tax lawyer for the Internal Revenue Service, and left that employment in 1984 after obtaining his Masters degree in Taxation from Georgetown University Law School. Respondent was admitted to practice before the Maryland Court of Appeals on December 1, 1983. Since 1984, the Respondent has been in private practice in Annapolis, Maryland. He is presently 55 years of age. "From 1984 un til the present, his practice has remain ed the sam e, with approxim ately 80% of his time being spent on tax work and the balance being spent in estate s and trust, co rporate and Chapter 11 bankruptcy. Since 1984, the Respondent estimates that he has represented over 2000 clients, with about 5% of those representing ba nkruptcy clients and 95 % of tho se clients representing referrals from other attorneys. "The events giving rise to this case took place between the years of 4

2003 and 2005. During that time, the Respondent testified that he maintained a single attorney escrow account at the Bank of America. He also maintained an operating account and a payroll account for his law practice, which are referred to herein as "operating account(s)." In 2003 the Respondent began experiencing severe cas h flow d ifficulties w ith his practice, rend ering him unable to pay the normal operating expenses of his law prac tice. Spe cific ally, the Respondent testified that in 2003 over $150,000.00 in receivables became uncollectible by virtue of failed bankruptcy reor ganization plans. Genera lly, such fees are contingent upon the success of the reorganization, and, when unsucce ssful, the receivables earned in the reorganization effort become uncollectible. A second difficulty encountered by the Respondent was the delay in the Ba nkru ptcy C ourt approving earne d fee s. Or dina rily, bankruptcy fees are placed in escrow, bu t can only be dispersed upo n Bankruptcy Co urt approva l. Those disbursements took up to 120 days to be approved. As a result of these difficulties, the Respondent sought and exhausted financing assistance, but was still unable to meet the operating expens es of his law firm or to repay his personal loans. It should be noted that in the year 2003, the Respondent earned approximately $106,000.00 from the practice of law and was paying college tuition for two of his children. "What developed in 2003, and extended into 2005, was a practice whereby the Respondent would write checks from his escrow account, and 5

deposit the same in his operating accounts a s needed and with out legal auth ority. When funds were due to be remitted to proper payees fro m his escrow account, he would cover shortfalls with short term borrowing, by the deposit of rents he receive d for offic e space in his law bu ilding in An napolis and/or by using other clients' funds. The Respondent testified that all proper payments from his escrow accounts were made when due, and no client at any time suffered any financial loss as a result of this practice. "This misuse of escrow funds continued through 2004 and into 2005. The Respondent earned income of approximately $106,000.00 in 2003, $110,000.00 in 2004 and $90,000.00 in 2005 from the practice of law, and had assumed full responsibility for payment o f college ex penses fo r two of h is children. This misuse of escrow funds came to the attention of the Petitioner when a check drawn on the Respon dent's escro w accou nt was retu rned by his bank for insufficient funds. "Once contacted by the Petitioner, Respondent submitted to the Petitioner ledgers w hich he told the Petitioner had been contemp oraneou sly maintained by Respon dent and w hich accu rately docume nted his handling of client funds in th e escrow account. N either represe ntation was true. Eight months later, Respondent voluntarily made known to Mr. Botluk that he had made several entries after the fact, that the ledgers contained "multiple inaccuracies" and did not accurately reflect his handling of the client funds. 6

"When the Court contacted the parties to set the Scheduling Order, the Respondent indicated that he would work with Mr. Botluk to prepare a stipulation of facts. R esponde nt further ind icated that he would only present character witnesses at the judicial hearing. In addition to the Respondent, four individuals appeared at the hearing before this Court and testified on the Responden t's behalf. These individuals were Attorney John Newell, the Honora ble James F. S chneider, Ju dge of the U.S. Ban kruptcy Cou rt for the District of Maryland, Attorney Stephen Krohn, and the Honorable Joseph P. Manck, former Administrative Judge of the Circuit Court for Anne Arundel Cou nty. "Attorney John Newell testified that he has been an attorney since 1973, specializes in estates and has been a Court Auditor for the Circuit Court for Anne Arundel County since June of 1981. Mr. Newell testified that he has known the Respondent for approximately fourteen years; that he has referred work to the Respondent; that the Respondent's handling of those referred matters was "outstanding" and that Respon dent's char acter and in tegrity were "without blemish"; that Mr. Newell recruited the Respondent as Counsel to the Anne Arundel County Library Board, that the Res ponden t gave gen erously of his time, attended every meeting, and also devo ted much time as cou nsel to the Anne Arundel County Library Foundation. Notwithstanding having read the Stipulation (P etitioner's Ex hibit 1), Mr. Newell's opinion of the Respondent 7

has not chang ed. Mr. N ewell was of the opinion that the Respondent has the capacity to do a lot of good for a lot of people in the future, even if he is not practicing law. "The Honorable James F. Schneider, Judge of the U.S. Bankruptcy Court for the District of Maryland has been a judge for twenty-five years. Judge Schneider testified he knows the Respondent from his bankruptcy practice, and he evaluated the Respondent's competence as being within the top 25% of b ankruptcy attorneys appearing bef ore him. Based on numerous professional contacts with the Respondent, Judge Schneider opined that the Responden t's character an d integrity were the "highe st" and that h is trustworthiness was "paramount." The Judge could not recall any complaint from anyone concerning Respondent's legal work. Notwithstanding having read the Stipulation, Judge Schneider stated that he still trusts the R esponde nt. "Attorney Stephen Krohn testified that he has been an attorney for 29 years and is a fellow of the American Academy of M atrimonial Lawyers. Mr. Krohn has known the Respondent for 30 years, and developed a personal friendship with the Respondent approximately 20 years ago . Since knowing the Respondent, Mr. Krohn has referred tax and bankruptcy matters to him, and has neve r received a ny complain t concernin g the Resp ondent's legal performance. Mr. Krohn testified that he has never had an occasion to be concerned about Respondent's character or integrity. 8 Having read the

Stipulation in this case, Mr. Krohn offered the opinion that while he still has trust in the character and integrity of the Respondent, he believes that some trust needs to be rebuilt. He characterized the Respondent as a good, caring and lov ing fath er. "Also testifying was the Honorable Joseph P. Manck former Administrative Judge of the Circuit Court for Anne Arundel County. Judge Manck has b een o n the bench since 1 989, and he perso nally k new th e Respondent as a child, lost contact, bu t then becam e reacqua inted with h im while both practic ed law. A s a lawyer, Jud ge Man ck referred clients to the Respon dent, and opined that the Respondent's character and integrity were of the highest order. Having read the Stipulation, Judge Manck affirmed the same level of trust in the Respondent and offered the opinion that the Respondent can still b e of b enef it to th e public a s an a ttorn ey. 2. Stipulation (Exhibit 1) "What follows are stipulated facts. For convenience in referencing individual transactions, each is abbreviated by the client or da te designatio n in bold type. "Respondent deposited $ 30,000.00 in escrow on November 13, 2003, belonging to client, the B ankruptcy E state of Le onard an d Ronn ie Canto r. He withdrew the $30,00 0.00, transfe rring the fun ds to his operating a ccount, between November 13 and December 9, 2003 (Cantor I) . He paid $28,000.00 9

to the Cantor bankruptcy estate on December 24, 2003, using funds belonging to an unrelated client, Mount Oak, LLC (Mount Oak I). "Funds for client Mount Oak, LLC were received by wire on December 18, 2003. Fo llowing th at deposit of $104,026.07 in his escrow account, the balance fell to $81,131.20 on December 22, 2003 (Mount Oak II). The full amount of the original deposit was wired out on Ap ril 19, 20 04. Respondent used funds belonging to an unrelated client, Richard Brien (which was deposited in the escrow account on March 3, 2004), to fund the disbursement to Mo unt Oa k, LLC . "On January 9, 2004, Respondent deposited $8,000.00 belonging to the Cantor bankrup tcy case in escrow. A lthough h e made n o disbursem ent to or on behalf of Cantor, the balance in his escrow account was $2,240.06 on February 5, 2004 (Cantor II) . He deposited an additional $6,000.00 on February 9, 2004, for a total of $14,000.00. His escrow account balance subseque ntly fell below $14,000.00 before he made any disbursements to or on behalf of Cantor. When he distributed funds to the Bankruptcy Trustee which was paid to the Cantor creditors, on June 28, 2004, he drew a check for $14,511.71, which exceeded the amount he was supposed to be holding for the client (Cantor III) . "Respondent received a wire deposit of $342,702.95 on behalf of client Richard T. Brien in his escrow account to Brien on March 3, 2004. That 10

amount was wired out of the escrow account on April 26, 2004. From March 29 th until April 21, 2004, Respondent did not maintain the full amount of Brien's deposit in his escrow a ccount (Brien). A deposit of $135,000.00 on April 22 nd on behalf of an unrelated client, James Riggleman, gave the account sufficient funds to permit R esponde nt to disburse Brien's fu nds on A pril 26 th (Riggleman). "On April 6, 2004, Respondent deposited $1,500.00 in his escrow account from client Karen Lynn Jenkins. Respondent's escrow account

balance was $510.48 on May 10, 2004 (Jenkins) . Respondent returned $1,500.00 to Jenkins on October 19, 2005 by check nu mber 60 8 drawn on his escrow accou nt. "Respondent deposited in his escro w accou nt $1,086.0 0 belongin g to client Tidew ater Ele vator o n Apr il 9, 200 4. By May 10, 2004, the balance in his escrow account was $510.48 (Tidewater I) , even though there were no withdraw als related to this client. Respondent ha d transferred a total of $9,800 .00 from his escrow account to his operating account f rom M ay 3 to May 10, 2004 (May 2004) . Betwee n April 9 and July 23, 2004, Respondent deposited a total of $1,517.11 in his escro w account fo r Tidewater Elevator. There are times when the escrow account balance fell below $1,517.11 (Tidewater II) after the last deposit and before Respondent returned the funds to the client on September 2, 2004. 11

"When Respon dent transfe rred $35,0 00.00 fro m his escro w accou nt to his operating account, on April 2 0, 2004, he used funds held on behalf of clients Richard T. Brien and John McKenna (McKenna) . "As of April 26, 2004, Respondent was supposed to be holding $26,863.83 in his escrow account for client John McKenna. By May 10, 2004, after Resp ondent ha d transferre d $9,800 .00 to his own accounts, the balance in the escrow account was $510.48. In August and October 2005, Respondent paid Mr. McKenna using fund s belonging to other clients (August-October 2005). "Respondent was supposed to be holding $ 2,500.00 b elonging to Excell Management from M ay 20, 20 04 unti l April 7 , 2005. Respon dent failed to maintain that balance in his escrow account (Excell) . Respondent returned the $2,500.00 to Ex cell M anag eme nt by a check dated March 31, 2005, using funds received from an unrelated client, Black Hawk Security, on tha t date (Black Hawk). "Respondent deposited $30,000.00 in his escrow account on July 6, 2004, for client Allan Percival (Percival I).1 The following day, the balance

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Respondent testified that loans from family and friends were placed in escrow to replenish client shortages (hereinafter referred to as "personal loans deposited in escrow "); that one such loan was in July of 2004 from a friend, Allan Per cival, whose $30,000.00 loan was deposited to escrow to cover 12

shortfalls. It therefore appears that the Stipulation mischaracterized this deposit as a client deposit, w hen in fac t it was a pe rsonal loan from A llan Perciva l.

in Respondent's account was $12,923.28, although he made no disbursem ents related to Mr. Percival. On September 21 and 22, 2004, he disbursed two checks totaling $30,526.03 to Percival. Respondent had held no other funds on behalf of Percival to account for the additional $526.03 (Percival II). "On July 7, 2004, Respondent deposited into the escrow account $25,000.00 belonging to Eastport Analytics (Eastport I).2 The follo wing day, the balance in the account was $12,923.28, although he had not made disbursem ents related to this clien t. On July 7 th, he transferred a total of $7,300.00 from his escrow account to his operating accounts. By July 31, 2004, the escrow account had a negative balance (Eastport II). He paid $25,00 0.00 to E astport A nalytics on Januar y 3, 2005 . _______________________ Despite the Stipulation, Respondent testified that this money was actu ally a loan from a friend w ho own ed Eastpo rt. ________________________ "On Augu st 6, 2004, Respondent deposited $13,000.00 in his escrow account belonging to his client, Liberty Metal, Inc.3 On August 10 th, _______________________
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Respondent testified that a "small part" of monies received from this client were for attorney's fees, but it is unclear whether such 13

fee had been earned. ________________________ Respondent transferred a portion of the Liberty Metal funds to his operating account. By Augu st 26, 2004 , Respon dent had a negative b alance in his escrow account. Funds belonging to Liberty Metal were disbursed to Horace Davis (August 11, 2004) (Liberty I) and J. Rigg leman (A ugust 25, 2004) (Liberty II) for matters unrelated to Liberty Metal. On December 6, 2004, Respondent paid $13,000.00 to U.S. Treasury for Liberty Metal fro m fund s in his escrow account. "When Respondent transferred $1,000.00 to his operating account on August 10, 2004, he used funds belonging to Liberty Metal and Tidewater Elevator (Tidewater III) . "The transfer of $1,3000.00 from Respo ndent's escrow account to his operating account4 used funds he was to be holding for Olmo Brothers (Olmo) , Allan Percival and Eastport Analytics. _______________________
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Which occurred on July 7, 2004 p er p. 4 of P etitioner's Ex hibit 2. ________________________ "Respondent deposited in his escrow account $32,000.00 on June 8,

2005 on behalf of client Inez Brown from C arole S chwa rtz. Two days later, the balance in the escrow account was $13,946.26 (Brown I) . On June 30,

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2005, the balance was $18.46 (Brown II) . The escrow account had a negative balance on July 14th (Brown III). Respondent had not disbursed the funds on behalf of his clients. On September 8, 2005, the $32,000 .00 was d isbursed to the United States Treasury on behalf of Brown. Respondent used funds belonging to clients Richard Epstein (Epstein) and Dennis Hayden (Hayden). "Respondent transferred $1,000.00 to his operating account on June 30, 2005, leaving a balance of $18.43 in the escrow account when he was supposed to be holding $32,000.00 for Inez Brown (Brown II) . "On several occasions, Respondent deposited in his escrow account funds received for rent from othe r atto rneys using space in his office, Douglas Hollmann and Carolyn Krohn (personal rent) . "Respondent deposited $20,000.00 in his escrow account on August 18, 2005. Those funds belonged to client, Precision Signs. On August 31, 2005, Responden t's escrow account balance was $654.69 (Precision). There were no disbursements from Respondent's escrow account related to Precision Signs between August 18 and August 31, 2005. Respondent disbursed

$20,000.00 to Precision Signs on October 6 , 2005, usin g funds b elonging to an unrelate d client, Terry A ult (Ault I). "Funds belonging to client Terry Ault in the amount of $55,469.39 w ere deposited in Respondent's escrow account on October 6, 2005. The balance in Respondent's account fell below tha t level on O ctober 13, 2 005. Terry A ult 15

was paid $55,469.39 on November 15, 2005, partially using funds belonging to Mid-Atlantic Nursing (Mid Atlantic). While Respondent was holding the funds for Terry Ault, he transferred a total of $30,200.00 to his own accounts. The transfer of $1,000.00 (Ault II) on October 17, 2005 and $1,500.00 on November 9, 2005 (Ault III) from Respo ndent's escrow account to his operating account was a use of Terry Ault's funds. "In response to Bar C ounsel in this matter, Respondent submitted documents which he purported to be ledgers contemporaneously maintained by him documenting his handling of client f unds in his e scrow ac count. Respondent later acknowledged to Assistant Bar Counsel on the date of the Peer Review meeting in this matter that he had made several entries after the fact and that it did not accurately reflect his handling of client funds. "Petitioner's review an d analysis of the bank reco rds pertaining to Responden t's escrow account did not establish that any client received less money than they we re entitled to rec eive. No c lients have f iled complaints alleging that they have not received all the funds to which they were entitled. CONCLUSIONS OF LAW "1. Safekee ping Prop erty. "MR PC 1.15 provides th at: (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept 16

in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. "The Court finds by clear and convincing evidence that the Respondent failed to hold clients' property by improperly withdrawing client funds from his escrow account for his own use, for the use of other clients, or for use of a third party in the following transactions: Cantor I, II and III; Mount Oak I and II; Brien; Rig gleman; Je nkins; Tid ewater I, II and III; May, 2004; McKenna; August-Octo ber 2005; Exce ll; Black Hawk ; Percival II; Eastport II; Liberty I and II; Olmo; Brown I, II and III; Epstein; Hayden; Precision; Ault I, II and III; and Mid Atlantic. (b) A lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that accou nt, but only in an amount necessary for the purpose. "The Court find s by clear and c onvincin g evidence that the personal loans deposited in escrow, including Percival I and Eastport I, as well as personal rent violate this subsection. (c) Unless the client gives infor med co nsent, confirm ed in writing, to a different a rrangem ent, a lawy er shall dep osit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred. "This record does not sup port a finding that any of the monies received

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by the Respondent from his escrow account were for legal fees or expenses. Therefore, the Court cannot conclude by clear and convincing evidence that the Respondent violated this subsection. (d) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agree ment w ith the client, a law yer shall promp tly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person , shall promptly render a full accounting regarding such property. "The Court cannot conclude by clear and convincing evidence that any of the prohibitions of this subsection have been violated. (e) When in the course of represen tation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate b y the lawy er until the dis pute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute. "There is no clear and convincing evidence that the Respondent ever received property in which two or more persons claimed interest. Therefore, this sub section has no t been v iolated. "2. Bar Admission and Disciplinary Matters. "MR PC 8.1 p rovides tha t: . . . [A] lawyer in connection with . . . a disciplinary matter, shall not: (a) know ingly m ake a fa lse statem ent of m aterial fa ct . . . . "The Court concludes by clear and convincing evidence that the 18

Respondent has violated this Rule by submitting altered ledgers to Assistant Bar Counsel which purported to have been made contemporaneously by Respondent with the transactions in his escrow account, when in fact the ledgers had been made after the fact and the ledgers did not accurately reflect Respondent's handling of client funds. "3. Miscon duct. "MR PC 8.4 p rovides tha t: It is professional misconduct for a lawyer to: (b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; "The Petition does not specify the criminal a ct the Resp ondent is alleged to have committed. At oral argument, the Petitioner argued only that this subsection "dove tails" with the Business Article "de aling with misuse of trust money, using money belonging to clients that he had in his escrow accou nt for an unauth orized p urpose ." "As set forth in paragraph 6 below, the Respondent did violate the Business Article, but tha t is not a crimin al statute, and th erefore a v iolation is not necessarily a criminal act. The misuse of trust money in this case does not, by clear and convincing evidence, meet the statuto ry elements of theft or embezzlement; thus, this subsection has not been violated. (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; 19

"The Court finds by clear and convincing evidence that the Respondent engaged in dishone sty and dece it/misrepresen tation by implicitly or ex plicitly misrepresenting to his clients that their escrow funds would be safeguarded, and that escrow funds disbursed were those being held by the Respondent on their behalf, when in fact they were not. In addition, the knowing submission of false ledgers violated this subsection. "The follow ing tran saction s violate d this su bsectio n: Can tor I, II and III; Mount O ak I and II; Brien; Rigglem an; Jenkins; Tidew ater I, II and III; May, 2004; McKenna; August-October 2005; Excell; Black Hawk; Percival II; Eastport II; L iberty I and II; Olmo; Brown I, II and III; Epstein; Hayden; Precision; Ault I, II and III; and Mid Atlantic. "The Court does not find that Respondent's conduct involved fraud. (d) engage in conduct that is prejudicial to the administration of justice; "Conduct is prejudicial to the administration of justice whe n it tends to bring the legal profession into disrepute. By clear and convincing evidence, the Court finds that the following transactions violated this subsection: Cantor I, II and III; Mount Oak I and II; Brien; Riggleman; Jenkins; Tidewater I and II; August-October 2005; Excell; Black Hawk; Pe rcival II; Eastport II; Liberty I and II; Tidewater III; Olmo; Brown I, II and III; Epstein; Hayden; Precision; Ault I, II and III; and Mid Atlantic.

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"4. Commingling of Funds. "Rule 16-607 provides: a. General Prohibition. An attorney or law firm m ay depos it in an attorney trust account only those funds required to be deposited in that account by Rule 16-604 or permitted to be so deposited by section b. of th is Rule. "By clear and convincing evidence the Court finds that the following transac tions vio lated this Rule: P ercival I ; Eastpo rt I; and p ersona l rent. "5. Prohibited Transactions. "Rule 16-609 provides: An attorney or law firm may not borrow or pledge any funds required by these Rules to be deposited in an attorney trust account . . . or use any funds for any unauthorized purpose. "The Court finds by clear and convincing evidence that the following transactions violated this Rule: Cantor I, II and III; Mount Oak I and II; Brien; Riggleman; Jenkins; T idewater I, II a nd III; Ma y, 2004; Mc Kenna ; AugustOctober 2005; Excell; Black Hawk; Pe rcival II; Eastport II; Liberty I and II; Olmo; Brown I, II and III; Epstein; Hayden; Precision; Ault I, II and III; and Mid Atlantic. "6. Mis use o f Tru st M oney. "Md. Code An n., Bus. Occ. & Prof.

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