Too-trusting lawyer gets 2nd sanction from Maryland Court of Appeals

Daily Record, The (Baltimore), Mar 18, 2008 by Steve Lash

Longtime lawyer Charles Jay Zuckerman said he has had it with private practice after a unanimous Court of Appeals on Monday suspended him a second time for mismanaging his client trust account, from which two successive paralegals stole more than $300,000 in all.

"I will never go back to private practice," said Zuckerman, who voluntarily went on inactive status July 1. But the former assistant attorney general said he would consider taking a state job, "where I don't have to worry about escrow accounts."

The top court, in its suspension order, said Zuckerman could apply for reinstatement in 90 days -- triple the waiting period imposed in 2005, when he was sanctioned after being defrauded of $144,000 by the first paralegal.

This time, the court found that Zuckerman had failed again to oversee a second paralegal, who wrote out checks made payable to clients but endorsed by her husband.

Zuckerman was blind to the scheme because he never looked at the back of the checks to confirm that they had in fact been endorsed by the clients, the court said Monday.

Zuckerman, though, said his major offense was trusting his employees, to whom he -- like other solo practitioners nationwide -- had delegated the responsibility of overseeing the account.

"I had hundreds and hundreds of cases," said Zuckerman, whose practice consisted primarily of personal injury cases. "I was in court a lot. You've got to delegate things. You can't be there to sign every check."

The most recent paralegal, Rhonda L. Elkins, pleaded guilty in February 2007 to having stolen $170,000 from Zuckerman's trust account between March 2003 and January 2005.

Zuckerman got wind of the scheme in January 2006, when he learned that Elkins had taken out a credit card in his name, the court said. Elkins was fired when she later told Zuckerman she had dipped into the trust account, the court added.

As part of a February 2007 plea deal, Elkins was sentenced to five years in prison with all but one year suspended.

"You've got to have some trust in your employees," Zuckerman said. "You pay them good money."

It was not lost on the high court that Zuckerman had hired Elkins to clean up the financial mess left by Shannon Becker, her predecessor as paralegal. Zuckerman had authorized Becker, the niece of a former office manager, to write checks on his trust account within weeks of her hiring. She made the checks out to her friends and falsified the office records to cover her tracks, according to her guilty plea.

"In the instant case, respondent [Zuckerman] delegated to Rhonda Elkins the task of dealing with the consequences of the original theft in addition to management of the day to day operations of respondent's trust account," retired Judge Dale R. Cathell wrote for the court. "Again ... he failed to correct his funds disbursement system, which allowed Rhonda Elkins to steal from him in the same manner that the previous employee had."

Zuckerman said he closed his Baltimore practice in January 2007 and paid back clients whose money was stolen. He served as an assistant attorney general and assistant state's attorney in Baltimore City before going into private practice about 25 years ago.

"I've never taken a nickel from anybody," Zuckerman said Monday, adding that the two grievance proceedings against him were emotionally draining. "I was so stressed out I couldn't even sleep at night."

Counsel for the Maryland Attorney Grievance Commission told the high court that the panel has received no complaints from Zuckerman's clients about a failure to pay.

The court ordered Zuckerman's first suspension in April 2005, allowing him to apply for reinstatement after 30 days, which he did. Zuckerman was reinstated that June.

In suspending him a second time, the court said Zuckerman's poor hiring choices were just part of a general, repeated mismanagement of the client trust account.

Specifically, after the first disciplinary action, Zuckerman continued to pay clients what they were owed before funds belonging to them were deposited in the trust account, meaning that these payments must have been made with funds being held for other clients, the court said.

Such payments "constitute a clear violation of Section 10-306 of the [Business Occupations and Professions] Article, which requires that lawyers not use trust money 'for any purpose other than the purpose for which the trust money is entrusted to the lawyer'" the court stated, adding its own emphasis.

"Despite the fact that in most instances only several days would pass between the disbursement and the deposit, and no clients were harmed, it is clear that respondent continued a practice that we previously held to be violative" of the section, the judges added.

On the other extreme, Zuckerman failed to pay clients promptly from the funds in the account, such as money due them through the settlement of personal injury claims. Maryland Rule of Professional Conduct 1.15(d) requires prompt notification and delivery of funds in which a client has an interest, the court said.