Appellate Division: Second Judicial Department

M267048

E/mb

ALAN D. SCHEINKMAN, P.J.

WILLIAM F. MASTRO

REINALDO E. RIVERA

MARK C. DILLON

JEFFREY A. COHEN, JJ.

2019-05527 D In the Matter of Freddie J. Berg, an attorney and counselor-at-law. Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, petitioner; Freddie J. Berg, respondent. (Attorney Registration No. 2343838)

ECISION & ORDER ON MOTION Second, Eleventh, and Thirteenth Judicial

Motion by the Grievance Committee for the Districts (1) to suspend the respondent from the practice of law, pursuant to 22 NYCRR 1240.9(a)(5), upon a finding that he is guilty of professional misconduct immediately threatening the public interest; and (2) to appoint 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 May 7, 1990. The Grievance Committee commenced this proceeding pursuant to 22 NYCRR 1240.8 by the service and filing of a notice of petition dated May 20, 2019, and a verified petition dated May 17, 2019, and the respondent served and filed an answer dated June 17, 2019. Subsequently, the Grievance Committee served and filed a statement of a disputed and undisputed facts, dated August 1, 2019, which has not been challenged by the respondent.

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 1240.9(a)(5), the respondent, Freddie J. Berg, 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, Freddie J. Berg, shall promptly comply with this Court's rules governing the conduct of disbarred or 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, the respondent, Freddie J. Berg, 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 the respondent, Freddie J. Berg, 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 issues raised are referred to David I. Ferber, c/o Ferber Chan Essner Coller, LLP, 60 East 42nd Street, Suite 2050, New York, New York, 10165, as Special Referee, to hear and report, with the hearing to be completed within 60 days of the date of this decision and order on motion, or as soon thereafter as practicable, and the report, which contains his findings on the issues and charges, to be submitted within 60 days after the conclusion of the hearing or the submission of post-hearing memoranda.

We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest based on uncontroverted evidence that he engaged in a pattern and practice of misappropriating client funds with respect to the following matters:

Park

In September 2016, the respondent represented ZJS Holdings Corp. (hereinafter ZJS) in connection with the sale of two properties, located at 149-39 12th Avenue, Whitestone, New York and 149-43 12th Avenue, Whitestone, New York, respectively, to Byoung Hee Park. In mid-September 2016, the respondent received three cashier's checks from Park, totaling $400,000, representing the down payments for the transactions. Pursuant to the contracts of sale, the down payments were to be held by the respondent in "escrow in a segregated bank account." The respondent did not maintain an attorney escrow account, and, on September 19, 2016, Park's down payment checks were deposited into the respondent's operating account at Citibank, ending in 1835, entitled "Berg Law Firm LLC, Operating Account" (hereinafter the Citibank operating account), a non-escrow account. The ZJS closings never occurred. To date, Park has not received a refund of the down payments. The respondent no longer has Park's down payments.

Simpson

In February 2017, the respondent represented 4301 Church Ave. Corp. in the sale of real estate to Urban Equity Partners, Inc. Pursuant to the contract of sale, the down payment of $90,000 was to be held by the respondent "in escrow in a segregated bank account at Capital One Bank, Jamaica and Sutphin Branch until [c]losing or sooner termination of contract". On or about February 24, 2017, the $90,000 down payment was wired to the respondent's operating account at Capital One Bank, ending in 6342, entitled "Berg Law Firm, LLC" (hereinafter the Capital One operating account) a non-escrow account. Immediately prior to the deposit, the account balance in the Capital One operating account was negative. Upon deposit of the $90,000 down payment, the balance in the Capital One operating account was $89,079.19. By March 31, 2017, prior to any disbursements in the Simpson matter, the balance in the Capital One operating account had been depleted to $5,312.60. By November 30, 2017, prior to any disbursements in the Simpson matter, the balance in the Capital One operating account had been depleted to negative $403.74.

Murell-Baker

On April 3, 2017, a check in the amount of $149,899.53, representing settlement proceeds for the respondent's client, Murell-Baker, was deposited into the Capital One operating account. By April 4, 2017, prior to any disbursements on behalf of Murell-Baker, the balance in the Capital One operating account had been depleted to $138,490.42. By May 11, 2017, prior to any disbursements on behalf of Murell-Baker, the balance in the Capital One operating account had been depleted to negative $444.70.

Bruce

In August 2017, the respondent represented Jimmy Bruce in the purchase of real property owed by Orquida Bautista. On August 23, 2017, Bruce's down payment in the amount of $205,000 was deposited into the Capital One operating account, bringing the account's balance to $206,048. On August 24, 2017, $9,500 was transferred from the Capital One operating account into the Citibank operating account for purposes unrelated to the Bruce transaction. On August 24, 2017, there was a wire transfer from the Capital One operating account in the sum of $2,475 to Tony Bruce, Jimmy Bruce's son. On August 24, 2017, there was a second transfer from the Capital One operating account in the sum of $160,000 to Orquida Bautista. Most of the remaining $33,025 was used to pay for the respondent's office operating expenses, garnishments and court fees. Thereafter the Bautista/Bruce contract was cancelled. To date, Jimmy Bruce has not received a refund of any portion of his down payment.

Lin

On April 17, 2018, a $50,000 cashier's check was deposited into the Capital One operating account from Hui Lin. On April 18, 2018, another $40,000 was deposited into the Capital One operating account on behalf of the same transaction. On April 19, 2018, prior to disbursements on behalf of the Lin transaction, the balance in the Capital One operaring account had been depleted to $557.40.

Lu

On April 26, 2018, a check for $65,000 was deposited into the Capital One operating account from Xiao Chun Lu, representing a contract deposit for 181 Newport Street, Brooklyn, New York. By May 3, 2018, prior to any disbursements on behalf of the Lu transaction, the balance in the account had been depleted to $35.

Singh

In or about May 2016 and August 2016, the respondent received two checks from his client, Arjan Singh, in the amounts of $25,000 and $3,500, respectively, representing the down payment in a real estate transaction. Both checks were deposited into a non-escrow operating account belonging to the respondent.

In opposition to the motion, the respondent denies the charges, but admits the underlying factual allegations. The respondent advises the Court that he is prepared to assist in any effort to remedy the depletions in his accounts.

We find that the Grievance Committee has sufficiently demonstrated that the respondent poses an immediate threat to the public interest based on his admissions that he is no longer in possession of the Park and Singh funds, and Park and Singh have not been repaid. Moreover, the respondent admitted that he never opened an escrow account, that he allowed non-lawyers access to his operating account, that he allowed the funds to be depleted immediately, and that he used a portion of the deposited funds for personal expenses.

Based on the foregoing, the Grievance Committee's motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 1240.9(a)(5), pending further order of this Court, and the matter is referred to a Special Referee, to hear and report.

SCHEINKMAN, P.J., MASTRO, RIVERA, DILLON and COHEN, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court