Attorney Grievance Commission v. Weiss

• Decision Date: 22 November 2005
• Docket Number: Misc. Docket AG No. 15
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Randy A. WEISS.
• Court: Maryland Court of Appeals

886 A.2d 606

389 Md. 531

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Randy A. WEISS.

Misc. Docket AG No. 15, September Term, 2004.

Court of Appeals of Maryland.

November 22, 2005.

Glenn M. Grossman, Deputy Bar Counsel (Melvin Hirshman, Bar Counsel, Atty. Grievance Com'n of MD), for Petitioner.

Abbe David Lowell, Washington, DC, for Respondent.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

CATHELL, Judge.

Bar Counsel, on behalf of the Attorney Grievance Commission, petitioner, pursuant to Maryland Rule 16-773(b),¹ filed a Petition for Disciplinary or Remedial Action against Randy A. Weiss, respondent, for violation of the Maryland Rules of Professional Conduct (MRPC).² The petition alleged that the respondent violated MRPC 8.4 sections (b), (c) and (d)³ by converting funds due to his law firm in fifty-four separate transactions from 1993 to 1996, in the total amount of $676,465.99.

In accordance with Maryland Rule 16-752(a)⁴ this Court assigned the matter to Judge Louise G. Scrivener of the Circuit Court for Montgomery County for an evidentiary hearing and to make findings of fact and conclusions of law. In accordance with Maryland Rule 16-757,⁵ Judge Scrivener held a hearing and issued findings of fact and conclusions of law. There is no dispute as to the facts of this case and neither party filed exceptions to Judge Scrivener's findings.

I. Facts

Respondent was admitted as a member of the Bar of this Court on May 1, 1982. He maintained an office in Washington, D.C. for the practice of law and presently works in the same firm in the position of a legal clerk. The Petition for Disciplinary or Remedial Action is based upon the District of Columbia Court of Appeals' finding that respondent violated the rules of professional conduct of that jurisdiction when he converted funds belonging to his law firm. That court suspended him from the practice of law in the District of Columbia.

Judge Scrivener's findings of fact and conclusions of law are as follows:

"At the hearing it was determined that the underlying facts leading to the suspension of Respondent, Randy A. Weiss, by the District of Columbia Court of Appeals are not in dispute. Also not in dispute are certain remedial actions taken by respondent both before and after the hearing before the District of Columbia Court of Appeals Board on Professional Responsibility, which made Findings of Fact relied upon by the District of Columbia Court of Appeals.

"FINDINGS OF FACT

"These findings of fact are based upon the undisputed Findings of Fact of the District of Columbia Board on Professional Responsibility, Respondent's Designation of Documents, and argument by counsel.

"1. Respondent was admitted to the District of Columbia Bar in December 1981. He also is a member of the Maryland, Virginia, Florida, and Colorado Bars. Respondent has not been subject to any prior disciplinary proceedings.

"2. At the time of the conduct at issue here, Respondent was a partner in the law firm [ ] (the `Firm'), where he specialized in real estate, refinancings, and real estate settlements. Respondent was also a licensed underwriting title attorney and serves as an agent for title insurance companies represented by the Firm.

"3. The misconduct found concerns the conversion of funds owed to the Firm as a result of Respondent's involvement as title insurance agent on real estate transactions. When Respondent served as counsel to a party in a transaction involving the sale of real property, his Firm was paid a fee for his work. The fee would be reflected on the settlement sheet summarizing the payments involved in the transaction. On some, but not all, real estate sale transactions on which he performed legal work, Respondent also served as the title insurance agent. On such transactions, Respondent was compensated by the title insurance company through the insurance premiums paid by the entity acquiring the insurance. These payments also were reflected on the settlement sheet. Under the agreements with the title insurance companies, Respondent retained 80% of the premium and 20% was passed on to the insurance company to cover the risk. Because the premiums were based on the selling price of the real estate, in large commercial transactions the amount was substantial. Respondent acknowledges that all of the legal fees and title insurance fees paid to Respondent were due and payable to the Firm.

"4. Starting in April, 1993, Respondent converted a portion of the title insurance fees in a number of transactions he handled to his own money market account. The record is not clear as to precisely how Respondent diverted the funds, since he indicated that at times checks were made payable to him personally, while other evidence indicates that the funds were placed in a Firm escrow account over which Respondent had effective control. Respondent further testified that, on several occasions, he deposited the title insurance fees into his own professional corporation operating account. The checks from the Firm were signed by Respondent and/or one of Respondent's partners in the Firm. During the period from 1993 to 1996, Respondent paid to the Firm the legal fees that resulted from the real estate transactions but retained for himself the title insurance fees in approximately one third of the transactions. The Firm's account receivable system did not tie into the system that produced the settlement sheets and title insurance premiums are negotiable and, therefore, vary by transaction. So, for example, on a real estate sale transaction on which Respondent performed legal work and served as the title insurance agent, if Respondent turned over to the Firm the check for the legal fees, the Firm would not detect a shortfall if Respondent simply kept a portion of the check for the title insurance fee. The Respondent testified that there was never a time that he took the entire title insurance premium for himself. The Respondent always gave the firm some of the premium and, according to the Respondent's testimony, the firm was `not able to determine, because of the volume of work, whether or not [he was] gypping them on that, whether or not [he was] not turning over the correct amount.' [Brackets in original.]

"5. Respondent took funds due to the Firm a total of 54 times from April 1993 through September 1996. The amounts covered ranged significantly, from under $1,000 to $128,745.21. According to the report of an auditor the Firm retained to examine Respondent's activities, the total converted equaled $676,465.99. None of the funds involved client funds; they were all funds due to the Firm.

"6. Respondent placed the converted funds in a money market account and paid taxes on the funds. The money market account in which Respondent deposited these funds also contained funds from other sources. Respondent stated that he never spent the money he diverted, although, it is not clear from the record [that] the Respondent was aware of the full amount taken. The Respondent testified that he was unable to readily identify the total amount that had been diverted from the firm as the account into which the diverted funds were deposited also contained other funds and from at least one of those accounts, withdrawals were made for living or other purposes.

"7. The record shows that he did not use the funds to change his lifestyle. He remained in the same house, drove the same car, took the same vacations and otherwise continued to live as he had prior to taking the money. His wife continued to work at the job she had prior to Respondent's conversion of funds. He, however, was secretive about the funds, and did not disclose to his wife the existence of the money market account. There is no evidence that Respondent has a drug, alcohol, or gambling addiction.

"8. After the Jewish High Holidays in 1996, Respondent began to come to terms with his conduct and why it was wrong. Respondent was an adult Bar Mitzvah in 1996, and has involved himself increasingly as an adult in the religious aspects of his Jewish heritage. After consultation with his Rabbi, in May 1997 he advised his Firm, through counsel, of his conversion of funds. The Firm was unaware of Respondent's misconduct. Respondent also suggested that the Firm advise D.C. Bar Counsel. Upon learning of his conduct, the Firm retained an accountant, paid for by Respondent, to audit the relevant books and an outside counsel to advise the Firm. On May 27, 1997, Respondent and the Firm advised Bar Counsel of Respondent's misconduct.

"9. When Respondent advised the Firm of his diversion of funds, he expressed his intention to return the money. He believed, based on his own limited review of his records, that he had taken between $300,000 and $450,000. He immediately returned $450,000 to the Firm in May 1997, pending the audit results. The audit revealed, however, that he had taken an additional $226,465.99, which Respondent promptly paid in August and October 1997. He also paid for the costs of the audit and the fees of the Firm's outside counsel. Respondent also did not retain the 17.2% to which he would have been entitled as his partner share if he had paid the money into the Firm initially.

"10. After advising the Firm of his conversion of funds, Respondent was instrumental in revising the Firm's financial practices to reduce the risks that similar conduct might occur again. Respondent insisted the Firm adopt a two-signature practice for checks and took the steps necessary to make that change when others in the Firm were slow to do so. Respondent no longer has check signing authority with the Firm.

"11. In January 1998, as the result of the events, Respondent ceased to be a partner in the Firm. He has remained associated with the Firm since the day he gave notice to his partners....

. . .

"13. According to the Report of Dr. Thomas C. Goldman, a psychiatrist retained by Respondent, Respondent's decision to confess

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