Appellate Division: Second Judicial Department

M274341

E/sl

ALAN D. SCHEINKMAN, P.J.

WILLIAM F. MASTRO

REINALDO E. RIVERA

MARK C. DILLON

RUTH BALKIN JJ.

2020-05649 In the Matter of Jeffrey Alan Fleischman, an attorney and counselor-at-law. Grievance Committee for the Second, Eleventh, and Thirteen Judicial Districts, petitioner; Jeffrey Alan Fleischman, respondent. (Attorney Registration No. 2603215)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Second, Eleventh, and Thirteen Judicial Districts to suspend the respondent from the practice of law, pursuant to 22 NYCRR 1240.9(a)(2) and (5), upon a finding that he is guilty of professional misconduct immediately threatening the public interest, and to refer the issues raised to a Special Referee, to hear and report. The Grievance Committee served the respondent with a notice of petition dated July 23, 2020 and a verified petition dated July 21, 2020, and the respondent filed a verified answer dated August 19, 2020. Subsequently, the parties filed a joint stipulation of disputed and undisputed facts signed by counsel for the Grievance Committee on September 1, 2020, and counsel for the respondent on September 8, 2020. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the First Judicial Department on January 31, 1994.

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

ORDERED that the motion is granted; and it is further, ORDERED that pursuant to 22 NYCRR 1240.9(a)(2) and (5), the respondent, Jeffrey Alan Fleischman, 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, Jeffrey Alan Fleischman, shall promptly comply with the 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, Jeffrey Alan Fleischman, 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, Jeffrey Alan Fleischman, 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 Honorable Patricia M. DiMango, 330 East 38th Street, Suite 23C, New York, NY 10016-2759, to hear and report, with the hearing to be completed within 60 days of the date of this decision and order, or as soon thereafter as practicable, and the report, which contains her 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.

Discussion

We find, prima facie, that the respondent, Jeffrey Alan Fleischman, is guilty of professional misconduct immediately threatening the public interest based on uncontroverted evidence that he misappropriated client funds entrusted to him.

Unit 3 Condominium Matter

In January 2019, the respondent, serving as escrow agent for the sale of a condominium located at 1525 43rd Street, Brooklyn, NY (hereinafter the Condominium Unit 3), received a $60,000 down payment from the purchaser. The respondent was required to hold the down payment in escrow until the closing on Unit 3 Condominium property, or until termination of the agreement.

On January 9, 2019, the respondent deposited $10,000 of the down payment into his escrow account held at Capital One Bank, entitled "Law Office of Jeffrey A. Fleischman Escrow Account," account number ending in 6637 (hereinafter the escrow account). Thereafter, the respondent made three transfers from the escrow account to his Capital One personal bank account, entitled "Jeffrey Fleischman," account ending in 4788 (hereinafter the personal account), as follows: $5,000 on January 11, 2019; $2,000 on January 17, 2019; and $3,000 on January 22, 2019. The respondent withdrew these funds for his own personal benefit, and, in doing so, depleted the escrow account's balance on January 22, 2019, to $77.16.

On January 30, 2019, the respondent made two additional deposits into the escrow account representing the remaining $50,000 of the Condominium Unit 3 down payment. Less than a week later, the respondent transferred $60,000 from the escrow account to the personal account for his own benefit, reducing the escrow account's balance to $3,827.16. The balance remained $3,827.16 through February 14, 2019, prior to the Condominium Unit 3 closing on March 29, 2019.

Unit 2 Condominium Matter

The respondent, serving as escrow agent for the sale of a second condominium located at 1525 43rd Street, Brooklyn, NY (hereinafter the Condominium Unit 2), on or about February 14, 2019, received the sum of $100,000 by wire to the escrow account, as down payment for the sale of that property. The respondent was required to hold the down payment in escrow until the closing on Unit 2 Condominium property, or until termination of the agreement. The closing on the Condominium Unit 2 was held on March 5, 2019. On February 15, 2019, the respondent transferred $100,000 from the escrow account to the personal account, reducing the escrow account's balance to $3,827.16.

Sea Girt Matter

The respondent, as attorney for the seller of a property in Sea Girt, New Jersey (hereinafter the Sea Girt property), received a $75,000 check from the buyer representing a down payment for the sale of the property. On or about November 7, 2018, the respondent deposited the down payment into the escrow account. Thereafter, multiple disbursements were made from the escrow account, including a $5,000 transfer to the personal account, reducing the escrow account's balance to $39,577.16. The closing for the Sea Girt sale occurred on December 11, 2018. Following the closing, the respondent issued a check, dated December 19, 2018, that represented the down payment funds, minus legal fees and expenses, from his personal bank account.

Riverside Matter

The respondent, as attorney for the seller of a property located at 11 Riverside Drive, New York, NY (hereinafter the Riverside property), received a $150,000 from the buyer. On February 27, 2019, the respondent deposited the down payment into his escrow account. Following this deposit, but prior to the closing for the sale of the Riverside property on May 1, 2019, the respondent made 10 disbursements totaling $101,645.98 unrelated to the Riverside sale, which cleared wholly or in part against the Riverside down payment.

Loan Transaction

In 2019, the respondent represented both the lender and the borrower in a loan transaction which provided for a $500,000 loan at a per annum interest rate of eleven percent, secured by a promissory note. On or about May 6, 2019, $500,000 was wired into the escrow account.

On May 7, 2019, the respondent disbursed $335,000 of the loan principal to the borrower, leaving $165,000 remaining on balance in the escrow account. Following this deposit, through July 31, 2019, the respondent made disbursements unrelated to the loan, for his personal use, which cleared wholly or in part against the remaining loan principal.

Conclusion

The respondent, although admitting to the above misconduct, opposes the application for an interim suspension arguing that he does not constitute an immediate threat to the public, and instead requests the matter be referred to a Special Referee for issues regarding mitigation.

We find that the Grievance Committee has sufficiently demonstrated that the respondent poses an immediate threat to the public interest based on his misappropriation of client funds.

Based on the foregoing, the motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 1240.9(a)(2) and (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 BALKIN, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court