Siegel, Matter of

Decision Date23 July 1993
Citation627 A.2d 156,133 N.J. 162
PartiesIn the Matter of Steven G. SIEGEL, an Attorney-at-Law.
CourtNew Jersey Supreme Court

John J. Janasie, First Asst. Ethics Counsel, on behalf of Office of Atty. Ethics.

Justin P. Walder, Roseland, for respondent (Walder, Sondak, Berkeley & Brogan, attorneys; Mr. Walder and John A. Brogan, on the brief).


This matter arises from a grievance filed with the District XIV Ethics Committee by the law firm of McCarter & English (M & E) against one of its former partners, respondent, Steven G. Siegel. The complaint charged respondent with three counts of unethical conduct in violation of Rule of Professional Conduct 8.4(c), which prohibits "conduct involving dishonesty, fraud, deceit or misrepresentation." The first count charged respondent with fabricating disbursements and misappropriating funds of M & E, the second count with submitting false expenses against a client's account, and the third with improperly withdrawing M & E funds as a gift from a client to himself.

The Special Master found on the first count that respondent had submitted thirty-four false requests for disbursements from September 4, 1986, to November 21, 1989, and had received "$21,636.32 in either goods, services or cash to which he was not entitled." On count two, he determined that respondent had obtained $4,483.95 in false disbursements.

Count three involved a $53,450 gift to respondent from a client for respondent's diligent and successful efforts in handling one matter. The Special Master found that respondent had executed a check request for the $53,450 from M & E funds and had listed the reason as "for payment of closing proceeds." According to the Special Master, respondent did not reveal to M & E that this payment represented a gift from a client, and thus prevented the firm from considering whether it would prohibit the acceptance of the gift or whether the gift was the property of the partnership. The Special Master found that respondent's conduct constituted dishonesty, deceit, and misrepresentation in violation of Rule 8.4(c).


The Disciplinary Review Board (DRB) sustained the Special Master's finding that respondent was guilty of unethical conduct. The DRB, however, based its conclusion on the findings involving counts one and two, but not on those concerning count three. A majority of the DRB recommended a three-year suspension. The three lay members dissented. Citing respondent's "extensive ($25,000) and extended (three years)" theft from his partners, the dissent recommended disbarment.

Our independent review of the record leads us to agree with the DRB that respondent's acceptance of the gift, as alleged in count three, did not clearly and convincingly violate Rule 8.4(c). We find, however, that the evidence clearly and convincingly establishes that respondent knowingly misappropriated funds from his partners. Respondent's repeated deception compels disbarment.


The Decision and Recommendation of the DRB summarized the charges and relevant evidence relating to counts one and two as follows:

Beginning in 1986 and through the end of 1989, respondent converted in excess of $25,000 in funds belonging to M & E by submitting false requests for disbursements drawn against "unapplied retainers," [which are] monies collected and owned by M & E as legal fees, but not yet transferred from the clients' files to M & E's accounts. * * *

It was through the use of those unapplied retainers that respondent's carefully contrived scheme to divert M & E funds for his personal benefit succeeded, went undetected for three and one-half years and might have remained unexposed if not for M & E's discovery, soon after respondent's departure from the firm, of a questionable American Express charge to a client's file. * * *

By way of illustration of a personal expense paid by M & E's funds through artifice on respondent's part, on July 10, 1987 and June 15, 1989, respondent signed disbursement requests for $689 and $530 respectively, listing the purpose therefor as "surveyor charges" owed to Coviello Brothers, Inc. in two real estate matters. In reality, that business concern was a professional landscaping service that had landscaped respondent's residence. Other false disbursement requests (thirty-four in all) covered payments for respondent's personal tennis club fees (totalling $1,700), theatre tickets ($3,000), personal legal fees ($3,000), dental expenses ($645), mortgage service fee in connection with his mother-in-law's residence ($1,797.50) and sports memorabilia ($9,000). In every instance, the payees were not fictitious; only the stated purpose for the expense was illegitimate. * * *

Additional false expenses, totalling $4,483.95, are listed [in] * * * [c]ount [t]wo of the formal complaint. In that case, M & E represented Chemical Bank on various matters for which respondent was the billing attorney. Under M & E's bookkeeping system, each matter had an individual number. Between April 30, 1989 and December 31, 1989, respondent transferred unapplied retainers from various Chemical Bank matters to [a] single account, denominated Chemical General account, thereby creating a fund of unapplied retainers in the amount of $15,392.21. Thereafter, between June 1, 1989 and December 31, 1989, respondent [totally] depleted the $15,000 fund * * *.

Specifically, respondent submitted numerous false disbursement requests to M & E to cover the payment of $4,483.95 in personal expenses * * *. 1 * * *

Regarding the third count, the DRB found:

Count Three charged respondent with improperly keeping $53,450 that should have gone to M & E's accounts but that respondent, instead, disbursed to himself as a gift from a client, the Asbury Park Press ("The Press"). * * *

* * * From 1984 through 1988, respondent worked on a * * * complex and lengthy matter, which resulted in substantial profits to the Press * * *. [At the close of the matter, the Press] issued instructions to respondent on how to disburse 1.5 million in closing proceeds deposited in M & E's accounts. The disbursements included a $50,000 reward to respondent for his personal efforts * * *. The sum of $3,450 in accrued interest on the $1.5 million [in] funds was also to be disbursed to respondent as a gift. The $53,450 sum was not intended to be given to M & E * * *. In fact, were respondent unable to accept the gift because of any policy within the firm, the Press expected that the monies would be returned to it.

Consistent with the Press' directives, respondent signed disbursement requests for checks payable to all individuals named by the Press, including himself. * * * He labelled his own $53,450 check as "payment of closing proceeds."

Respondent neither sought approval from M & E to accept the gift nor informed the firm of the Press' wish to give him a monetary reward. [Also,] * * * he was not aware of any M & E policy requiring an affirmative duty to obtain the firm's approval to the gift. * * * [I]t is undisputed that there was no agreement governing the receipt of gifts by partners * * *.

Following the discovery of respondent's improprieties * * *, it was agreed that respondent's $165,000 share of the firm's capital account would be offset by certain sums unduly kept by respondent, including the $50,000 gift from the Press. Ultimately, respondent received $125,000 from his share in the capital account. [Footnote omitted.]

The DRB found that respondent's acceptance of the gift from The Press may have been imprudent, but in the absence of an established firm policy prohibiting such gifts did not clearly and convincingly demonstrate deliberate concealment. Thus, the DRB concluded that respondent's conduct in count three did not violate Rule 8.4(c).

In contrast, the DRB determined that respondent's repeated deceitful misappropriation of M & E funds, as enumerated in counts one and two, "was unethical and extremely serious." Although the DRB stated that theft by an attorney, irrespective of the source of the funds, must never be tolerated, it concluded for two reasons that disbarment was not appropriate. First, the majority reasoned, because this is a case of first impression in this State, respondent did not have notice that misappropriating funds from his partners could result in disbarment. Second, the majority pointed to respondent's outstanding record as an attorney. The majority concluded that respondent's actions warranted a three-year suspension.

The dissent disagreed:

We unhesitatingly vote to disbar.

* * * * * * [Respondent's] achievements and impeccable reputation as a lawyer, lecturer and law professor are undeniably impressive, but they should not serve to mitigate the extensive ($25,000) and extended (three years) swindle of his own partners' funds, just as nothing will serve to mitigate theft of clients' funds. In like manner, [respondent's] acknowledgment of his piracy and restitution to his partners should not merit great commendation, particularly in light of the unavoidable suspicion that contrition ensued only because he had the bad luck of being apprehended.

No one will deny that [respondent] committed an act of moral turpitude. He embarked on a prolonged deceitful scheme to plunder his partners' money, a scheme that ultimately put $25,000 in his pocket. And he did so surreptitiously, unlike the examples he cited of perceived abuses by other partners. While, arguably, some of his partners' conduct might have been irregular, it was not unethical, illegal or shrouded in secrecy, like his. To submit to the bookkeeper a receipt for a personal lunch and to say "pay it" is a far cry from fabricating disbursement requests that, on their face, give clear notice to the firm that the expenses had been incurred for the benefit of clients. The first example could be called an internal firm dispute; the second is called thievery.

* * * * * *

* * * It is our unshaken...

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27 cases
  • Greenberg, Matter of
    • United States
    • New Jersey Supreme Court
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    ...firm to his own use. We reaffirm the rule set forth in In re Wilson, 81 N.J. 451, 409 A.2d 1153 (1979), and extended in In re Siegel, 133 N.J. 162, 627 A.2d 156 (1993), that misappropriation of client or law firm funds will almost invariably result in disbarment. We hold that disbarment is ......
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  • State ex rel. NSBA v. Frederiksen
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    • September 21, 2001
    ...gain willfully defrauds a client and one who for the same untoward purpose defrauds his or her partners." Matter of Siegel, 133 N.J. 162, 167, 627 A.2d 156, 159 (1993). Accord Attorney Griev. Comm'n v. Nothstein, 300 Md. 667, 480 A.2d 807 (1984). The majority's holding sends the wrong messa......
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1 books & journal articles
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    • United States
    • Colorado Bar Association Colorado Lawyer No. 32-1, January 2003
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    ...gain willfully defrauds a client and one who for the same untoward purpose defrauds his or her partners." In re Siegel, 133 N.J. 162, 627 A. 2d 156, 167 (1993). Our perception that such of theft are morally equivalent does not derive from the relationships between attorneys and their client......

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