No. BD-2010-121
S.J.C. Order of Term Suspension entered by Justice Cordy on January 10, 2011, with an effective date of February 9, 2011. 1
SUMMARY2
The respondent was suspended for eighteen months for misconduct as a lender’s attorney in three real estate transactions from December, 2002, through March, 2004. For each transaction, the same mortgage broker, Leo Desire, referred the closing to the respondent. During the time period involved, Desire engaged in a series of “mortgage rescue” transactions with homeowners facing foreclosure, whereby the homeowners would convey their home to straws selected by Desire, Desire would obtain a loan to finance the transaction, and the homeowners would retain the right to repurchase their home pursuant to a formula set out by Desire.
For each of the three closings, the respondent prepared and signed, and had the purported buyers and sellers sign, a HUD-1 Disclosure Statement that he knew contained false and deceptive statements. Among other things, the HUD-1s misrepresented that a buyer’s deposit had been paid and that the buyer brought additional funds to the closing, failed to disclose payments to Desire (or his affiliates), and overstated the funds paid to the seller. The respondent submitted the false and deceptive HUD-1s to his lender clients.
The respondent was aware that the three transactions were straw transactions and that the original owners anticipated redeeming their ownership interests. He was also aware that the purported buyers had agreed that the original owners could continue to occupy the homes. The respondent did not inform his lender clients of these facts. He also had the purported buyers sign occupancy agreements, which he forwarded to his lender clients.
The respondent’s actions constituted dishonesty, fraud, deceit, and misrepresentation in violation of Mass. R. Prof. C. 8.4(c); and making false statements of material fact to his clients, and failure to disclose material facts to his clients when disclosure was necessary to avoid assisting criminal or fraudulent acts, all in violation of Mass. R. Prof. C. 4.1(a) and (b).
The respondent’s actions further constituted failure to keep his clients reasonably informed about the status of the matter in violation of Mass. R. Prof. C. 1.4(a); assisting clients in conduct the respondent knew was fraudulent, in violation of Mass. R. Prof. C. 1.2(d); and conduct that adversely reflects on his fitness to practice law, in violation of Mass. R. Prof. C. 8.4(h).
In aggravation, the Respondent had experience in the practice of law when he undertook each of the transactions and was the decision-maker for his firm. In mitigation, the Respondent realized no financial gain from the transactions, except for his normal legal fees.
On October 19, 2010, the parties submitted a stipulation to the Board of Bar Overseers in which the respondent acknowledged that the above material facts would be established by a preponderance of the evidence adduced at a hearing and agreed not to contest either the facts set forth or the rule violations charged. The parties recommended that the respondent be suspended from the practice of law for eighteen months.
On November 15, 2010, the Board of Bar Overseers voted to accept the stipulation of the parties and their proposed sanction.
On January 10, 2011, the Supreme Judicial Court for Suffolk County (Cordy, J.) ordered that the respondent be suspended from the practice of law for eighteen months, effective thirty days after entry.
FOOTNOTES:
1 The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.
2 Compiled by the Board of Bar Overseers based on the record filed with the Supreme Judicial Court.
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