Appellate Division: Second Judicial Department

M216391

E/ct

RANDALL T. ENG, P.J.

WILLIAM F. MASTRO

MARK C. DILLON

RUTH C. BALKIN

THOMAS A. DICKERSON, JJ.

2016-04176 In the Matter of Darrell J. Conway, admitted as Darrell John Conway, an attorney and counselor-at-law. Grievance Committee for the Tenth Judicial District, petitioner; Darrell J. Conway, respondent. (Attorney Registration No. 1784925)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Tenth Judicial District: (1) to suspend the respondent from the practice of law pending the consideration of charges of professional misconduct against him pursuant to 22 NYCRR 691.4(l)(1)(i), (ii), and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest based upon his failure to cooperate with the lawful demands of the Grievance Committee, substantial admissions under oath that he committed acts of professional misconduct, and other uncontroverted evidence of professional misconduct; (2) to authorize the institution and prosecution of a disciplinary proceeding against the respondent based upon allegations of professional misconduct set forth in a verified petition dated April 13, 2016; and (3) to direct that a hearing be held before a Special Referee appointed to hear and report with respect to each of the issues raised by the charges set forth in the verified petition dated April 13, 2016, and any answer thereto. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on March 10, 1982, under the name Darrell John Conway.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is

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

ORDERED that pursuant to 22 NYCRR 691.4(l)(1)(i), (ii), and (iii), the respondent, Darrell J. Conway, admitted as Darrell John Conway, is immediately suspended from the practice of law in the State of New York, pending further order of the Court; and it is further,

ORDERED that the respondent, Darrell J. Conway, admitted as Darrell John Conway, 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, Darrell J. Conway, admitted as Darrell John Conway, 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 or 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 Grievance Committee for the Tenth Judicial District is hereby authorized to institute and prosecute a disciplinary proceeding in this Court, against Darrell J. Conway, admitted as Darrell John Conway, based on the verified petition dated April 13, 2016; and it is further,

ORDERED that Mitchell T. Borkowsky, Chief Counsel to the Grievance Committee for the Tenth Judicial District, 150 Motor Parkway, Suite 102, Hauppauge, NY 11788, is hereby appointed as attorney for the petitioner in such proceeding; and it is further,

ORDERED that within 20 days after service upon him of a copy of this decision and order on motion, the respondent, Darrell J. Conway, admitted as Darrell John Conway, shall serve a copy of his answer to the verified petition upon the Grievance Committee and the Special Referee, appointed herein, and file the original with the Court; and it is further,

ORDERED that the issues raised by the verified petition and any answer thereto are referred to the Honorable Arthur J. Cooperman, 110-11 Queens Boulevard, Apt 10H, Forest Hills, NY 11375, as Special Referee, to hear and report, and to submit a report, which contains his findings on the issues, within 60 days after the conclusion of the hearing or the submission of post-hearing memoranda; and it is further,

ORDERED that if the respondent, Darrell J. Conway, admitted as Darrell John Conway, 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 based upon his failure to cooperate with the lawful demands of the Grievance Committee for the Tenth Judicial District, substantial admissions under oath that he committed acts of professional misconduct, and other uncontroverted evidence of professional misconduct.

This motion emanates from an investigation commenced by the Grievance Committee for the Tenth Judicial District following its receipt of a notice from the Lawyers' Fund for Client Protection (hereinafter the LFCP) that a check drawn against an account maintained by the respondent at JP Morgan Chase Bank, entitled "DARRELL J. CONWAY, P.C. ATTORNEY TRUST ACCOUNT IOLA," account number ending 0392 (hereinafter the Chase IOLA account), had been dishonored. By letter dated November 18, 2014, the respondent was notified that an investigation had been initiated based upon the dishonored check report from the LFCP, which indicated that his Chase IOLA account check no. 1024 in the sum of $15,880 had been returned for insufficient funds on September 30, 2014, as the balance in the account was approximately $4,900 at that time. Although the respondent was directed to submit a written answer, within 20 days of his receipt thereof, explaining the circumstances which caused the subject check to be dishonored, and to produce required bank and bookkeeping records for his Chase IOLA account, he failed to do so. The Grievance Committee made two additional requests for the respondent's answer and records by letters dated January 21, 2015, and February 13, 2015. No response was forthcoming from the respondent.

On June 25, 2015, the respondent was personally served with a judicial subpoena and a judicial subpoena duces tecum, directing him to appear at the Grievance Committee's office to produce his bank and bookkeeping records for the Chase IOLA account from the time of its opening on August 28, 2014, through March 31, 2015, and to give testimony at an examination under oath (hereinafter EUO).

When the respondent appeared at the Grievance Committee's office on July 8, 2015, he failed to produce all his bank and bookkeeping records. During the course of the EUO, the respondent testified that in August 2014, he opened a new IOLA account at JP Morgan Chase Bank, and transferred funds from his former escrow account at Citibank (hereinafter the Citibank escrow account) to the Chase IOLA account. Specifically, the respondent deposited an official check issued by Citibank, in the sum of $296,432.31, into the Chase IOLA account on August 29, 2014. However, the respondent was unable to identify the client matters which related to the transferred funds. Further, the respondent admitted that on or about September 8, 2014, he deposited $95,000 in personal funds into the Chase IOLA account. When asked why he had deposited these funds, the respondent stated, "I'm not certain of why. I think to bring the balance to where it should be." The EUO was adjourned to July 31, 2015, to give the respondent the opportunity to gather and provide documentation to assist him in explaining the transactions in his Chase IOLA account, for the period August 28, 2014, through March 31, 2015.

Prior to the continued EUO, the respondent created and produced ledgers for most of the transactions in his Chase IOLA account for the period under review. However, at the continued EUO on July 31, 2015, the respondent remained unable to fully itemize the client funds transferred from his Citibank escrow account to the Chase IOLA account. He claimed to have misunderstood the Grievance Committee's request. In any event, the respondent admitted depositing an additional $35,000 in personal funds in the Chase IOLA account on September 30, 2014, the same date that the respondent's Chase IOLA check no. 1024 was dishonored. The EUO was adjourned to August 6, 2015, at which time it was agreed that the respondent would produce all documentation necessary to account for the funds transferred from the Citibank escrow account to the Chase IOLA account, and provide an explanation of the circumstances leading to the September 2014 deficiency in the Chase IOLA account.

On August 6, 2015, the respondent appeared for his continued EUO and produced ledgers in connection with the Citibank escrow account. As to an explanation for the deficiency in the Chase IOLA account, the respondent admitted, among other things, that from in or about 2007 to 2013, he had disbursed client funds from the Citibank escrow account to pay personal and business expenses, inasmuch as his income was insufficient to meet his expenses. During this period, he admits that he was not aware of how much money was missing from the Citibank escrow account.

Thereafter, the Grievance Committee conducted a further review of the respondent's bank records, and discovered that there was a shortage in the Chase IOLA account, concerning two different client matters, namely, the Estate of William Krieger and the LaMendola real estate transaction. In view thereof, the respondent appeared for a continued EUO on November 23, 2015, during which he admitted that, notwithstanding his deposit of $130,000 in September 2014, a deficiency in the Chase IOLA account remained. Indeed, as of March 31, 2015, the balance in the Chase IOLA account was $244,451.68, far below the $341,513 he was required to maintain on behalf of the Krieger estate and the LaMendola real estate transaction. We further note that, notwithstanding the grievance investigation, the respondent admitted that there was a shortage of approximately $150,000 in the Chase IOLA account by the end of October 2015.

The respondent submitted an affirmation in opposition, in which he contends, among other things, that he does not believe his alleged professional misconduct poses an immediate threat to the public interest. He submits that he has been admitted to practice since 1982 without other allegations of misappropriation, and that he has received recognition for his many pro bono and volunteer services. The respondent states that when he discovered an "unfortunate accounting error[]" in the fall of 2014, he deposited personal funds to "rectify the miscalculation." However, these arguments are unpersuasive, inasmuch as the respondent's admissions under oath, as well as the bank records, provide uncontroverted evidence of the respondent's longstanding practice of misappropriating client funds for personal purposes.

Under the totality of the circumstances, the motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 691.4(l)(1)(i), (ii), and (iii), pending further order of this Court, the Grievance Committee is authorized to institute and prosecute a disciplinary proceeding against him, and the matter is referred to a Special Referee, to hear and report.

ENG, P.J., MASTRO, DILLON, BALKIN and DICKERSON, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court