Appellate Division: Second Judicial Department

M38514

K/nl

A. GAIL PRUDENTI, P.J.

ANITA R. FLORIO

HOWARD MILLER

ROBERT W. SCHMIDT

STEVEN W. FISHER, JJ.

2005-05339 In the Matter of Steven Pasternak, an attorney and counselor-at-law. Grievance Committee for the Tenth Judicial District, petitioner; Steven Pasternak, respondent. (Attorney Registration No. 1852805)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Tenth Judicial District for an order: 1) suspending the respondent from the practice of law on an interim basis, pursuant to 22 NYCRR 691.4(l)(1), (ii) and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest in that he misappropriated client funds entrusted to him; and 2) for such other and further relief as the court deems just and proper in connection with the notice pursuant to 22 NYCRR 691.3, which was previously served upon the respondent on May 20, 2005, and the respondent's demand for a hearing with respect to same, dated May 26, 2006. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on April 13, 1983. By decision and order on motion of this court dated January 11, 2006, the court held in abeyance the Grievance Committee's motion to impose reciprocal discipline upon respondent pending a hearing before John F. Mulholland, Esq., with respect to the findings of the New Jersey jurisdiction and the respondent's defenses to the imposition of reciprocal discipline.

Upon the papers submitted to the court and the papers submitted in response thereto, it is

ORDERED that the motion is granted; and it is further,

ORDERED that pursuant to 22 NYCRR 691.4(l)(1)(ii) and (iii), the respondent, Steven Pasternak, is immediately suspended from the practice of law in the State of New York, pending further order of this court; and it is further,

ORDERED that the respondent shall promptly comply with this court's rules governing the conduct of disbarred, suspended, and resigned attorneys (see 22 NYCRR 691.10); and it is further,

ORDERED that pursuant to Judiciary Law § 90, during the period of suspension and until further order of this court, the respondent, Steven Pasternak, is commanded to desist and refrain from (1) practicing law in any form, either as principal or agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law of its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and it is further,

ORDERED that the respondent appear for a hearing before John F. Mulholland, Esq., the Special Referee previously designated by this court, within 30 days, in accordance with this court's decision and order on motion dated January 11, 2006; and it is further,

ORDERED that if the respondent, Steven Pasternak, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR 691.10(f).

We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest in that he has misappropriated client funds entrusted to him.

The basis for the interim suspension motion is respondent's substantial admissions made under oath at the demand audit on August 15, 2001, before the Office of Attorney Ethics and at his New Jersey disciplinary hearing on April 21, 2004, as well as other uncontroverted evidence demonstrating that respondent misappropriated client funds entrusted to him.

The respondent represented Jerri Gaines with respect to a personal injury matter which was resolved through a two-part settlement. In April 2000, the respondent received a payment in the sum of $15,000, and in or about July 2000, he received a second payment in the sum of $80,000. The respondent admitted that he endorsed Ms. Gaines' checks and deposited them into his personal account. The respondent claimed that he had Ms. Gaines' permission to deposit the funds into his account but admits that he did not have permission to use the funds for his own purposes. The respondent also claimed that Ms. Gaines' financial advisor, Mira Mizrahi, authorized his use of the settlement monies to invest in his out-of-state business. The respondent admitted that he did not advise Ms. Gaines to seek the advice of independent counsel prior to investing her settlement monies in the out-of-state business. The respondent's bank statements reveal his disbursements of the settlement funds.

In or about July 2001, approximately one year after receiving the Gaines settlement proceeds, the respondent repaid Ms. Gaines by disbursing two checks to her from his First Union National Bank. He used the funds of another client, Brick Force Staffing, for this purpose and claimed that he had that client's consent to use their monies for his own purposes.

At the New Jersey disciplinary hearing, Jerri Gaines, Mira Mizrahi, and David Bricker of Brick Force Staffing, all denied authorizing the respondent to utilize settlement monies for his personal use. On that record, the Supreme Court of New Jersey disbarred the respondent for knowing misappropriation of trust funds.

The reply papers submitted by the respondent do not address the Grievance Committee's order to show cause but, rather, are an improper attempt by the respondent to relitigate the New Jersey proceeding. The scope of the hearing as set forth in the order dated January 11, 2006, is limited to the findings of the New Jersey jurisdiction as they relate to the defenses raised by the respondent to the imposition of reciprocal discipline.

Accordingly, the Grievance Committee's motion to immediately suspend the respondent on the ground that he represents an immediate threat to the public interest is granted and the parties are directed to proceed expeditiously with the previously ordered hearing with respect to the defenses raised by the respondent to the imposition of reciprocal discipline.

PRUDENTI, P.J., FLORIO, MILLER, SCHMIDT and FISHER, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court