The Fla. Bar v. Bander
| Decision Date | 11 May 2023 |
| Docket Number | SC2021-0011 |
| Parties | THE FLORIDA BAR, Complainant, v. STEPHEN MATTHEW BANDER, Respondent. |
| Court | Florida Supreme Court |
THE FILING OF A MOTION FOR REHEARING SHALL NOT ALTER THE EFFECTIVE DATE OF THIS DISBARMENT.
Original Proceeding - The Florida BarJoshua E. Doyle, Executive Director, The Florida Bar, Tallahassee Florida, Patricia Ann Toro Savitz, Staff Counsel, The Florida Bar, Tallahassee, Florida, Mark Mason, Bar Counsel, The Florida Bar, Tallahassee, Florida, and Jennifer R. Falcone Bar Counsel, The Florida Bar, Miami, Florida; and Kevin W Cox, Tiffany Roddenberry, and Kathryn Isted of Holland &Knight, LLP, Tallahassee, Florida, for Complainant
D. Culver Smith III of Culver Smith III, P.A., West Palm Beach, Florida, for Respondent
Respondent Stephen Matthew Bander, seeks review of a referee's report recommending that he be found guilty of professional misconduct and disbarred for failing to place client funds in his trust account, failing to timely provide refunds to his clients for double payment of attorney's fees, and using the fees to pay firm operating expenses.[1] Bander challenges the referee's findings of fact and recommendations as to guilt, arguing that his conduct did not violate any of the Rules Regulating The Florida Bar (Bar Rules). He also asserts that if he violated the rules, disbarment is a disproportionate sanction. We disagree, and for the reasons discussed below, we approve the referee's report in its entirety and disbar Bander from the practice of law.
Bander represented three clients-identified as clients N, A, and F-who sought U.S. residency through the Immigrant Investor Program (IIP). The three clients invested through an EB-5 Regional Center, Miami Metropolitan Regional Center, in a project called Skyrise Miami Tower Investors, LLC (Skyrise). Skyrise offered to pay the clients' legal fees for the representation related to the visas up to $40,000 per client. Bander billed each of the clients a total of $25,000 for the representation. Half of the fee was due at the time the client signed the engagement agreement with Bander, and the second half was due after United States Citizenship and Immigration Services (USCIS) made a determination on the clients' visa applications. Bander sent the invoice for his legal services to each client at the prescribed time. He also sent an invoice for the legal services to Skyrise. Both the clients and Skyrise promptly paid the invoiced fees.
Between 2015 and 2017, Bander received $90,000 in payments for legal fees from Skyrise. Each of the Skyrise payments occurred after the clients had already paid the legal fees. For example, Client N was billed for the initial fee on May 22, 2015, and paid on July 8, 2015. Skyrise was billed for the same portion of the fee on October 14, 2015, and paid Bander on November 2, 2015. USCIS approved Client N's application on November 14, 2016, and the next day, both the client and Skyrise were billed for the remainder of the fee. The client paid Bander on November 17, 2016, and Skyrise paid on November 23, 2016. However, the client was not informed of the Skyrise payments until February 27, 2017, and the refund was not sent to the client until March 14, 2017. Bander followed a substantially similar pattern with Clients A and F.
Because the clients had already paid the legal fees, the Skyrise payments were reimbursements of the legal fees to be given back to the clients. Instead of placing these funds in his trust account and sending refunds for the double payments promptly to the clients, Bander put these monies in his operating account and used the funds for firm expenses. Eventually, Bander refunded the legal fees to the clients, but only after he received a subpoena for testimony before the United States Security and Exchange Commission (SEC) in February 2017. According to Bander, he was concerned that the SEC would require disgorgement of the funds and, as a result, his clients would not be able to receive the reimbursements. Because of this concern, Bander provided refunds of the legal fees to his clients prior to providing testimony to the SEC.
The SEC had previously investigated Bander's firm and Bander's father for acting as an unregistered broker-dealer in connection with representation of clients seeking residency through the IIP program. The firm was receiving unauthorized commissions from the Regional Centers for the investments facilitated by the firm's clients. Bander on behalf of the firm signed a cease-and-desist order as part of a settlement agreement that involved disgorgement of the fees. In 2017, the SEC reopened the investigation of Bander's law firm. Because of the Skyrise payments, the SEC was concerned that the firm was again receiving commissions from the investment entities. In his testimony to the SEC, Bander admitted that he did not hold the Skyrise reimbursements in his trust account, did not notify the clients about the reimbursements, and used the reimbursements for firm expenses. This prompted the SEC to file a Bar grievance against Bander.
After the final hearing in this case, the referee filed a report with findings of fact and recommending that Bander be found guilty of violating five Bar Rules: 4-1.4 (Communication); 4-1.7 (Conflict of Interest; Current Clients); 4-1.8 (Conflict of Interest; Prohibited and Other Transactions); 4-8.4(c) (Misconduct); and 5-1.1 (Trust Accounts).
The referee found the following seven aggravating factors: dishonest or selfish motive; pattern of misconduct; multiple offenses; submission of false evidence, false statements, or other deceptive practices; refusal to acknowledge the wrongful nature of the conduct; vulnerability of the victim; and substantial experience in the practice of law. See Fla. Std. Imposing Law. Sancs. 3.2(b). The referee found three mitigating factors: absence of a prior disciplinary record; personal or emotional problems; and timely good faith effort to make restitution or to rectify the consequences of the misconduct. See Fla. Std. Imposing Law. Sancs. 3.3(b). Based on his misconduct, the Standards for Imposing Lawyer Sanctions (Standards), and existing case law, the referee recommends that Bander be disbarred and that he be assessed the Bar's costs. Bander filed a notice of intent to seek review of the referee's report and challenges the findings of fact and each recommendation as to guilt.
Though Bander claims he is challenging the referee's factual findings, Bander does not dispute that he engaged in the underlying conduct, nor does he take issue with any specific findings by the referee. Our review of the record reveals no error with any of the referee's factual findings and we approve them entirely. Regarding the referee's recommendations as to guilt, Bander believes that his conduct does not amount to violations of the Bar Rules. We disagree.
Our review of a challenge to the referee's findings of fact is limited; if the findings of fact are supported by competent and substantial evidence in the record, we will not reweigh the evidence and substitute our judgment for that of the referee. See Fla. Bar v. Alters, 260 So.3d 72, 79 (Fla. 2018) (citing Fla. Bar v. Frederick, 756 So.2d 79, 86 (Fla. 2000)). To the extent a party challenges the referee's recommendations as to guilt, the referee's factual findings must be sufficient under the applicable rules to support the recommendations. See Fla. Bar v. Patterson, 257 So.3d 56, 61 (Fla. 2018) (citing Fla. Bar v. Shoureas, 913 So.2d 554, 557-58 (Fla. 2005)). The burden is on the party challenging the referee's findings of fact and recommendations as to guilt to demonstrate that there is no evidence in the record to support the findings or that the record evidence clearly contradicts the conclusions. See Fla. Bar v. Germain, 957 So.2d 613, 620 (Fla. 2007).
The referee recommends that Bander be found guilty of violating Bar Rules 4-1.4, 4-1.7, and 4-1.8. In certain circumstances a lawyer must obtain written informed consent from a client before entering into or continuing a representation. Specific to this case, a lawyer is prohibited from accepting compensation for the representation from a third party unless the client gives informed consent. See R. Regulating Fla. Bar 4-1.8(f)(1). Further, a lawyer must "promptly inform the client" of any circumstance that requires informed consent. R. Regulating Fla. Bar 4-1.4(a)(1). Finally, informed consent must be given and "confirmed in writing." R. Regulating Fla. Bar 4-1.7(b)(4). Here, the three clients' legal fees were paid by a third party, Skyrise. Bander did not inform the clients that this created a conflict of interest and did not obtain the required written informed consent from the clients. Instead, Bander argues that he was not required to obtain informed consent from the clients because there was not a substantial risk that his representation would be limited by the third-party payment arrangement. However, the rule clearly states that informed consent is always required when a third party is paying the attorney fees. See R. Regulating Fla. Bar 4-1.8(f)(1). Whether there is a risk to the client-lawyer relationship is an additional consideration used to determine if the representation can continue; however, it is not a consideration for determining when informed consent is required. Id. Bander was required to inform the clients of the conflict of interest associated with the payment of legal fees by a third party and receive written informed consent for the arrangement. He did neither.
Accordingly we approve the referee's recommendation that Bander be found guilty of...
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