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What happens if my attorney steals my money?

Attorneys may hold funds for clients for a wide variety of reasons. These can include settlement checks after winning a lawsuit, a deposit for a real estate transaction and pre-payment of attorney’s fees and court costs.

The Rules of Professional Conduct have strict rules when it comes to attorneys managing client funds. They require attorneys hold these funds separate from their own, personal accounts and keep clear records. These rules even require attorneys to keep copies of these records for five years after they end the relationship with the client.

What happens when an attorney commingles these funds?

Mixing of these funds with personal funds can come with serious consequences. In an extreme example, an attorney out of New York allegedly took millions that he was holding for clients and disappeared. The attorney was well known throughout New York City for his expertise with real estate matters. This brought in many high roller clients who would often leave millions with the attorney to use towards deposits for real estate investments. The attorney, for whatever reason, allegedly chose to take over $14 million after decades of building his reputation and disappear.

The attorney did return. Almost one year after he disappeared, he came back for his court date. In addition to facing criminal charges for embezzlement and a potential prison sentence ranging from four to 13 years, the state bar association also chose to disbar him from practice.

Is this common?

Penalties range depending on the severity of the situation and the example noted above was extreme. Even so, commingling or misappropriation of funds is one of the most frequent claims for disciplinary action against attorney. Victims of this type of malpractice can hold their attorney accountable and recoup the lost funds.