IN THE MATTER OF ROBERT EDMUND LA
This matter was certified to the Virginia State Bar Disciplinary Board by the Fifth District Committee, Section III, and was heard on July 26, 2002, by a duly convened panel of the Disciplinary Board consisting of Karen Gould, presiding chair, Robert L. Freed, Theophlise L. Twitty, H.Taylor Williams, IV, and V. Max Beard, lay member. The Respondent, Robert Edmund La Serte, was present and represented by Rajeev Khanna, Esquire. The Virginia State Bar (hereinafter referred to as the (Bar() was represented by Seth M. Guggenheim, Assistant Bar Counsel. The proceedings were transcribed by Valarie L. Schmit of Chandler & Halasz, P.O. Box 9349, Richmond, Virginia 23227, (804) 730-1222. This matter was also heard together with the consent of the parties with VSB Docket # 00-053-0760.
All required legal notices were properly sent by the Clerk of the Disciplinary System.
The Chair polled the panel members to determine whether any member had a personal or financial interest in this matter that might affect or reasonably be perceived to affect his or her ability to be impartial in this proceeding. Each member, including the Chair, responded in the negative.
FINDINGS OF FACT
Upon consideration of the testimony presented and exhibits received, the Board makes the following findings of fact:
At all times relevant to this proceeding, the Respondent, Robert Edmund La Serte has been an attorney licensed to practice law in the Commonwealth of Virginia.
In July 1999, the Respondent maintained an attorney trust account, Account Number 202756629, for his law practice, Robert E. La Serte & Assoc, LLC, at Crestar Bank, now doing business as Sun Trust Bank. On July 1, 1999, a check (check #1029) in the amount of Three Thousand Four Hundred Fifty Three Dollars ($3453.00) was written from this account to St. Paul Medical & Rehab on behalf of client Pham Diep (hereinafter known as the (St. Paul check(). (VSB Exhibit #9 and #12.)
On August 19, 1999, the Respondent closed the aforementioned account and withdrew the remaining funds, in the amount of One Thousand Seven Hundred Twenty Dollars and Forty-One cents ($1720.41) (VSB Exhibit # 10), leaving a zero balance. The Respondent testified that he deposited the $1720.41 in another account in his new law firm, but could not prove that he deposited the money in a trust account. The Board finds that even if he had properly closed the Crestar account, he did not have sufficient funds to cover the St. Paul Medical & Rehab check when it was presented to the Bank. Unbeknownst to the Respondent, an additional amount of interest was paid on the Lawyer(s Trust Account (IOLTA). This caused the account to remain open and the account was not actually closed until October of 1999, the end of the next billing cycle. On September 1, 1999, the Respondent(s check #1029, drawn on this account in the amount of $3453.00, dated July 1, 1999 and payable to St. Paul Medical & Rehab, was honored by the Bank, creating an overdraft in the trust account in the amount of the check.
From September 1, 1999, Crestar Bank made repeated attempts to contact the
Respondent regarding the payment of the overdraft of his trust account with the bank. On December 8, 1999, Crestar Bank sent the Respondent a certified letter return receipt requested again demanding payment of the overdraft. (VSB Exhibit #8.) The letter was received and signed for by J. Daniel Reaves, an associate attorney in the Respondent(s law office. When the Respondent did not respond to Crestar Bank(s letter, it filed a complaint with the Virginia State Bar in January 2000. During the course of the hearing on July 26, 2002, the Respondent admitted that he still had not paid Crestar Bank The Respondent also admitted to Virginia State Bar Investigator, James Dooley, Jr., that he failed to reconcile his trust account ledger with the monthly bank statements for the trust account and instead just called the bank periodically to determine the balance in the trust account. The Respondent also failed to reconcile the trust account ledger with the individual client ledger cards.
DECISION OF THE BOARD
Based upon the foregoing, the Board finds by clear and convincing evidence that Respondent had opened the trust account at Crestar Bank, that he had used the account, that he failed to keep accurate records, and that he failed to reconcile his account to insure that his trust account was in balance. The Board finds by clear and convincing evidence that check #1029 was signed by the Respondent and that he was responsible for the trust account being out of balance. The Board further finds by clear and convincing evidence that the Respondent failed to reimburse Crestar for the overpayment on the overdraft and that he repeatedly failed to respond to their demands for payment. We find the Respondent(s position that he was not responsible for his trust account being out of balance and for the Crestar situation with the St. Paul check to be disingenuous. The Board felt that the manner in which the Respondent dealt with his trust account and denied any accountability for it, in addition to his failure to respond to requests for payment from Crestar for the St. Paul check, to be egregious and reprehensible.
Accordingly, the Board finds that these actions violated DR 9-103(A)(1), (2) and (3) and DR 9-103 (B)(5) and (6) of the Virginia Code of Professional Responsibility:
DR 9-103, Record Keeping Requirements
Required Books and Records: As a minimum requirement, every attorney engaged in the private practice of law in Virginia, hereinafter called (attorney,( shall maintain or cause to be maintained, on a current basis, books and records which establish his compliance with Disciplinary Rule 9-102. These records including all the reconciliations and supporting records required under Section (B) hereof shall be preserved for at least five years following completion of the fiduciary obligation and accounting period. For this purpose, the following books and records, or their equivalent, are required.
A cash receipts journal or journals listing all funds received, the sources of the receipts and the date of receipts. Checkbook entries of receipts and deposits, if adequately detailed and bound, may constitute a journal for this purpose. If separate cash receipts journals are not maintained for fiduciary and nonfiduciary funds, then the consolidated cash receipts journal shall contain separate columns for fiduciary and nonfiduciary receipts.
A cash disbursements journal listing and identifying all disbursements from the fiduciary account. Checkbook entries of disbursements, if adequately detailed and bound, may constitute a journal for this purpose. If separate disbursements journals are not maintained for fiduciary and nonfiduciary disbursements then the consolidated disbursements journal shall contain separate columns for fiduciary and nonfiduciary disbursements.
Subsidiary ledger: A subsidiary ledger containing a separate account for each client and for every other person or entity from whom money has been received in trust shall be maintained. The ledger account shall by separate columns or otherwise clearly identify fiduciary funds disbursed, and fiduciary funds balance on hand. The ledger account for a client or a separate subsidiary ledger account for a client shall clearly indicate all fees paid from trust accounts.
Required Trust Accounting Procedures: The following minimum trust accounting procedures are applicable to all trust accounts maintained by lawyers or law firms holding funds on behalf of clients who reside in this State, or from a transaction arising in this State, whether or not the lawyer or law firm maintains an office in
A monthly reconciliation shall be made at month end of the cash balance derived from the cash receipts journal and cash disbursements journal total, the trust account checkbook balance, and the trust account bank statement balance.
A periodic reconciliation shall be made at least quarter annually, within 30 days after the close of the period, reconciling cash balances to the subsidiary ledge trial balance.
Reconciliations shall identify the preparer and be approved by the attorney or one of the attorneys in the firm.
(6) Receipts and Disbursements Explained: The purpose of all receipts and disbursements of trust funds reported in the trust journals and subsidiary ledgers shall be fully explained and supported by adequate records.
The Board further finds that the other charges of misconduct in VSB Docket No. 00-053-2018 have not been proven by clear and convincing evidence, and the Board dismisses all other charges under this Docket Number.
Following the Board(s announcement of its findings of misconduct, Assistant Bar Counsel and Respondent were permitted to offer evidence in aggravation or in mitigation of such misconduct and to present argument. Because of the Respondent(s prior disciplinary offense and the Board(s finding in Case No. #00-053-2018 (decided today), his refusal to make restitution to Crestar, his attitude about the trust account and his indifference to the situation, the Board has concluded that these violations merit suspension of the Respondent(s license. Upon consideration whereof, it is ORDERED that Respondent(s license to practice law in the Commonwealth of Virginia be, and hereby is, suspended for three (3) years, effective July 26, 2002.
It is further ORDERED that, as directed in the Board(s July 26, 2002, Summary Order in this matter, a copy of which was served on Respondent by certified mail, Respondent must comply with the requirements of Part 6, Section IV, Paragraph 13.K(1), of the Rules of the Supreme Court of Virginia. The time for compliance with said requirements runs from the July 26, 2002, effective date of the Summary Order. All issues concerning the adequacy of the notice and arrangements required by the Summary Order shall be determined by the Board.
It is further ORDERED that, pursuant to Part Six, Section IV, Paragraph 13 (k)(10) of the Rules of the Supreme Court of Virginia, the Clerk of the Disciplinary System shall assess costs against the Respondent.
It is further ORDERED that the Clerk of the Disciplinary System send an attested true copy of this Order to Respondent Robert Edmund La Serte, Esquire, by certified mail, return receipt requested, at his address of record with the Virginia State Bar, 5827 Orchard Hill Lane, Clifton, Virginia 20124, to Rajeev Khanna, Respondent(s Counsel 3912 Whispering Lane, Falls Church, VA 22041, and to Seth M. Guggenheim, Assistant Bar Counsel, Virginia State Bar, 100 N. Pitt Street, Suite 310, Alexandria, Virginia 22314.
ENTER: this ______ day of August, 2002
VIRGINIA STATE BAR DISCIPLINARY BOARD
Karen A. Gould, Second Vice Chair