Appellate Division: Second Judicial Department

M221896

E/ct

RANDALL T. ENG, P.J.

REINALDO E. RIVERA

MARK C. DILLON

RUTH C. BALKIN

HECTOR D. LASALLE, JJ.

2016-05585 In the Matter of Frank A. Racano, admitted as Frank Anthony Racano, an attorney and counselor-at-law. Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, petitioner; Frank A. Racano, respondent. (Attorney Registration No. 2074326)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, inter alia, (1) to suspend the respondent from the practice of law pending the consideration of charges of professional misconduct against him pursuant to former 22 NYCRR 691.4(l)(1)(ii) and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest based upon his 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 the allegations of professional misconduct alleged in a verified petition dated June 2, 2016; and (3) to refer the issues raised to a Special Referee, to hear and report. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the First Judicial Department on June 16, 1986, under the name Frank Anthony Racano.

Upon the papers filed in support of the motion and no papers having been filed in opposition or in relation thereto, it is

ORDERED that pursuant to former 22 NYCRR 691.4(l)(1)(ii) and (iii) the branch of the motion which is to suspend the respondent, Frank A. Racano, admitted as Frank Anthony Racano, is granted, and, Frank A. Racano, admitted as Frank Anthony Racano, 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 Frank A. Racano, admitted as Frank Anthony Racano, shall promptly comply with this Court's rules governing the conduct of disbarred and suspended attorneys (see 22 NYCRR 1240.15); and it is further,

ORDERED that pursuant to Judiciary Law § 90, during the period of suspension and until further order of this Court, Frank A. Racano, admitted as Frank Anthony Racano, 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 if Frank A. Racano, admitted as Frank Anthony Racano, 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 1240.15(f); and it is further,

ORDERED that the branch of the motion which is to authorize the institution and prosecution of a disciplinary proceeding is granted, and the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts is hereby authorized to institute and prosecute a disciplinary proceeding in this Court, against Frank A. Racano, admitted as Frank Anthony Racano, based on the verified petition dated June 2, 2016; and it is further,

ORDERED that Diana Maxfield Kearse, Chief Counsel, Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, Renaissance Plaza, 335 Adams Street, Brooklyn, New York 11201, is hereby appointed as attorney for the petitioner in such proceeding; and it is further,

ORDERED that the Grievance Committee shall serve Frank A. Racano, admitted as Frank Anthony Racano, with a copy of this decision and order on motion together with a notice of petition and the verified petition dated June 2, 2016, pursuant to 22 NYCRR 1240.8(a)(1), and file the notice of petition and the verified petition dated June 2, 2016, as well as proof of service, with this Court, within 20 days after receipt of a copy of this decision and order on motion; and it is further,

ORDERED that the branch of the motion which is to refer the issues raised to a Special Referee, to hear and report is granted, and the issues raised by the verified petition and any answer thereto are referred to the Honorable Charles J. Thomas, 50 East 89th Street, #10-F, New York, NY 10128, as Special Referee, to hear and report, with the hearing to be completed within 60 days of the date of this order, or as soon as practicable, 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 the motion by the Grievance Committee is otherwise denied as unnecessary.

We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest based upon his substantial admissions under oath that he committed acts of professional misconduct concerning his handling of estate funds and other uncontroverted evidence of professional misconduct.

The Estate of John L. Phillips. Jr.

On March 23, 2016, the respondent appeared before the Honorable Laura Jacobson, in the Supreme Court, Kings County, for a hearing concerning the estate of John L. Phillips. Jr. (hereinafter the Phillips estate). According to the transcript of that hearing the respondent testified that on February 25, 2013, he represented the Phillips estate at the closing of title for two properties it owned that were located on Fulton Street and on Halsey Street, in Brooklyn, New York. The respondent deposited the proceeds of sale in the sum of $466,533.92 into his escrow account (hereinafter the escrow account). From the sale proceeds, the respondent paid approximately $150,000 to numerous individuals and entities for estate-related expenses. The respondent testified that he improperly used the remaining estate funds to pay his personal expenses.

The Complaint of Alan Rashkover and Concetta Rashkover

In March 2016 the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts received a complaint of professional misconduct against the respondent from Alan Rashkover and Concetta Rashkover, which alleged that the respondent failed to account for the proceeds of a real estate transaction. According to the complaint, in or about March 2015, the respondent was retained by the Rashkovers to represent them in the sale of commercial property they owned in Bronx, New York. On or about May 29, 2015, the contract of sale was forwarded by the purchaser's attorney to the respondent, together with a down payment check in the sum of $76,300. It is uncontroverted that the respondent was required to hold the $76,300 down payment in escrow until the closing of title, which occurred on October 2, 2015.

Pursuant to subpoena, the Grievance Committee obtained the relevant bank records for the respondent's escrow account, which confirm that he deposited the $76,300 down payment check into his escrow account on June 2, 2015. Immediately after depositing this check, the respondent made three withdrawals from his escrow account, unrelated to the Rashkover transaction, which totaled $108,888. By virtue of these disbursements, the balance in the escrow account fell to $45.07 on June 12, 2015, well below the $76,300 he was required to hold for the Rashkovers' transaction.

On the day of the closing, October 2, 2015, the balance in the respondent's escrow account was $100.07. After the closing, the Rashkovers received an escrow check dated November 17, 2015, from the respondent, in the amount of $9,000, which bore the notation "Partial return of escrow." To date, the respondent has failed to deliver the remaining proceeds of the sale to the Rashkovers.

The Zayas-Vazquez Transaction

In March 2016 the Grievance Committee received a complaint of professional misconduct against the respondent from Lisandra Vazquez, which alleged that he failed to return a down payment entrusted to him in relation to a cancelled real estate transaction. According to the complaint, on or about November 11, 2015, Ms. Vazquez entered into a contract to purchase a cooperative apartment from the respondent's client. By letter dated November 11, 2015, Ms. Vazquez's attorney forwarded the executed contract of sale to the respondent, together with a down payment check in the sum of $11,000. Pursuant to the contract of sale, the respondent was required to hold the $11,000 down payment in escrow until the closing of title or the cancellation of the contract.

The bank records reflect that the respondent deposited the $11,000 down payment check into his escrow account on November 13, 2015. By November 18, 2015, the balance in respondent's escrow account fell to $500.07, well below the $11,000 he was required to hold for the transaction. On the day the contract was cancelled, February 8, 2016, the balance in the respondent's escrow account was $1,215.07. To date, the respondent has failed to return any portion of Ms. Vazquez's down payment.

The Parasram Singh Complaint

In March 2016 the Grievance Committee received a complaint of professional misconduct against the respondent from Parasram Singh, which alleged that certain checks the respondent issued in connection with a real estate sale were dishonored. In or about January 2016, the respondent received a $43,000 down payment from the purchaser in connection with the sale of certain property by Singh, the respondent's client. Pursuant to the contract of sale, the respondent was required to hold the $43,000 down payment in escrow until the closing of title or the cancellation of the contract.

The bank records reflect that respondent deposited the $43,000 down payment check into his escrow account on January 4, 2016. In the next month, the respondent issued 12 checks totaling $31,800, all payable to himself from his escrow account. As a result of the foregoing disbursements, the balance in the escrow account fell below, and remained below, the $43,000 the respondent was required to hold for the Singh transaction.

Based upon the foregoing, the branches of the motion which are to suspend the respondent pursuant to former 22 NYCRR 691.4(l)(1)(ii) and (iii) to authorize the institution and prosecution of a disciplinary proceeding, and to refer the issues raised to a Special Referee are granted and the respondent is immediately suspended from the practice of law, pending further order of this Court. Additionally, the Grievance Committee is authorized to institute and prosecute a disciplinary proceeding against the respondent based upon the verified petition dated June 2, 2016, and the matter is referred to a Special Referee, to hear and report.

ENG, P.J., RIVERA, DILLON, BALKIN and LASALLE, JJ., concur

ENTER:

Aprilanne Agostino

Clerk of the Court