IN THE SUPREME COURT OF FLORIDA (Before a Referee)

Transcription

1 IN THE SUPREME COURT OF FLORIDA (Before a Referee) THE FLORIDA BAR, v. Complainant, GABRIEL I. MARTIN Respondent. / Supreme Court Case No. SC The Florida Bar File Nos ,046(11M) & ,934(11M) REPORT OF REFEREE I. SUMMARY OF PROCEEDINGS: Pursuant to the undersigned being duly appointed as Referee for the Supreme Court of Florida to conduct disciplinary proceedings as provided for by Rule 3-7.6(b) of the Rules Regulating The Florida Bar, review of a consent judgment for discipline was undertaken. All of the pleadings, notices, motions, orders, and exhibits are forwarded with this report and the foregoing constitute the record in this case. The following attorneys appeared as counsel for the parties: For The Florida Bar: William Mulligan The Florida Bar 444 Brickell Avenue Suite M-100 Miami, FL 33131

2 For Respondent: Richard Baron, Esq. 501 NE 1 st Avenue Suite 201 Miami, Florida Respondent submitted a Stipulation as to Probable Cause, Unconditional Guilty Plea and Consent Judgment for Discipline ("Consent Judgment") providing for a suspension from the practice of law for a period of three (3) years nunc pro tunc to October 16, 2006, the date of the emergency suspension order entered in case no. SC , as the final resolution of all matters referenced herein. The position of The Florida Bar, as approved by a Designated Reviewer of the Eleventh Judicial Circuit, is that Respondent's plea be accepted. II. FINDINGS OF FACT: In his consent judgment, Respondent has admitted certain factual matters which I hereby accept and adopt as the findings of fact in this cause, to-wit: 1. Respondent is an attorney who practiced almost exclusively criminal law prior to 2006 and was inexperienced in the practice of civil law and inexperienced in the practice of real estate law. 2. On or about late 2004, Respondent met George Louis Garcia ( Garcia ), a suspended Florida attorney. Garcia convinced the Respondent that he was an expert in real estate transactions. Based on the representations of Garcia, the Respondent applied to Attorney s Title for authority to write title policies. Respondent was licensed to do so in April Respondent thereafter, in part, acted as a de facto title company and created an operating account in Respondent s P.A. to handle the title and real estate transactions. On or about April 2005, Respondent 2

3 formed the Gabriel Martin PA Operating, account no , maintained at Ocean Bank ( Title Company Operating Account ). 4. For the real estate and title transactions Respondent relied wholly on the advice of Garcia in conducting transactions. Respondent relied on Garcia to keep the books and accurately prepare the HUD statements. Respondent also relied on Garcia to keep track of the deposit and disbursement of funds of the transactions into the Title Company Operating Account and the Gabriel Martin PA Trust Account ( Trust Account ), maintained at Ocean Bank account no The Trust Account was opened solely for the real estate business. 5. Respondent trusted Garcia to honestly carry out these duties and to accurately maintain the books and records. Relying on Garcia s represented honesty and integrity, Respondent signed the checks and title insurance documents prepared by Garcia without the required due diligence, or inquiry. 6. On or about April 27, 2006, The Florida Bar received information from the Federal Bureau of Investigation indicating that Garcia, was involved in fraudulent real estate transactions. 7. On or about May 15, 2006, The Florida Bar served a subpoena upon Respondent, Garcia s employer at that time. 8. On or about July 10, 2006, Respondent appeared at The Florida Bar and produced bank statements and cancelled checks (front only) from the Trust Account, for the period of May 1, 2005 to December 31, 2005 and an incomplete receipt and disbursement journal. 9. Respondent failed to provide client ledger cards and copies of any files requested by the Bar. Respondent advised The Florida Bar that the records were held by Garcia and that Garcia also held the closing files. Garcia provided certain of the records which Respondent delivered to The Florida Bar, others he never delivered. 10. Thereafter, Respondent delivered bank statements and cancelled checks (front only) to the Bar for the period of January 1, 2006 to June 30, 2006, as well as some computer disks containing real estate closing documents. 3

4 11. Garcia conducted real estate closings, executed HUD-1 Settlement Statements ( HUD-1 ), signed every single HUD-1 as the Authorized Representative, and communicated with buyers, sellers, brokers, real estate agents, lenders, bankers, and appraisers. 12. Respondent was negligent in his failure to supervise Garcia s actions in his office. 13. Although unknown to Respondent, Respondent accepts that Garcia not only represented himself as an attorney in good standing but also directed a conspiracy to defraud lenders and others by conducting fraudulent real estate closings. Garcia and his associates participated in closings with straw buyers, brokers, and others, which netted him and his cohorts substantial sums of money. 14. Respondent has filed a civil action in The Eleventh Judicial Circuit of Miami Dade County Florida against Garcia and his co-conspirators in Case No.: CA 32 for Fraud And/Or Constructive Fraud, Unjust Enrichment, Civil Theft (Florida Statute ) Treble Damages, Civil Conspiracy And Imposition Of Constructive Trust (In Equity) to attempt to recoup the defrauded sums. 15. During the period of April 12, 2005 to August 3, 2006, Respondent signed 104 checks totaling $1,547,780.91, payable to Garcia, from the account identified as Gabriel Martin PA Operating account no , maintained at Ocean Bank. Garcia represented to Respondent that the funds were returning his (Garcia s) investments in several of the real estate transactions closed by Respondent s law firm. 16. Respondent also signed, a total of twelve checks from the Trust Account totaling $469, payable to Garcia, for a grand total of $2,016, After receiving the Bar s subpoena and being placed on notice of Garcia s actions, Respondent was negligent in that he failed to adequately investigate Garcia s operations allowing him to continue to perpetrate fraud in other real estate closings. 18. Respondent s negligent failure to supervise Garcia s actions in his office allowed Garcia to conduct at least twelve other closings between May 24, 2006 and July 14, 2006, all of which netted 4

5 approximately $8,865, from lenders into Respondent s Trust Account. 19. On or about July 10, 2006, Respondent came to the office of The Florida Bar and stated that he was without knowledge of criminal activities of Garcia. 20. As a title agent, Respondent was required to follow the lender s closing instructions by ensuring that the final HUD-1s accurately depicted the receipts and disbursements of the closings. Respondent negligently failed to ensure that this obligation was met. 21. After the filing of the instant complaint, Respondent voluntarily submitted to a polygraph examination on April 11, 2007 by highly respected polygraphist George Slattery, who confirmed via polygraph examination that Respondent was being truthful in his statement that he was without knowledge of the fraudulent activities of Garcia. 22. Respondent maintains that he was not involved in the criminal conspiracy and did not receive any of the criminally derived proceeds and was himself the victim of the fraud. Nonetheless, Respondent was negligent in his failure to supervise Garcia s actions in his office. 23. Respondent acknowledges that the holding of the Florida Supreme Court in The Florida Bar v. Riggs, 944 So.2d 167 (Fla. 2006) supports the position that Respondent s failure to adequately supervise Garcia in the handling of his Operating and Trust Accounts constitutes the requisite intent to violate the Rules Regulating the Florida Bar by failing to manage activities. 24. Respondent further acknowledges that knowingly or negligently engaging in sloppy bookkeeping constitutes the requisite intent to violate the Rules Regulating the Florida Bar. 25. While Respondent maintains that he did not intentionally engage in any actions that would comprise conduct violating the Rules Regulating the Florida Bar, Respondent s negligence constitutes the requisite intent to violate the Rules Regulating the Florida Bar. 26. Respondent admits that by reason of the foregoing facts, and the Florida Supreme Court s holding in Riggs, that he has violated Rules (Misconduct & Minor Misconduct), 3-6.1(e) (Client Contact), 4-5

6 1.15 (Safekeeping Property), (Responsibilities of Partners, Managers, and Supervisory Lawyers), (Responsibilities Regarding Nonlawyer Assistants), 4-8.4(a) (A lawyer shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another), (Trust Accounts), and (Trust Accounting Records and Procedures) of the Rules Regulating The Florida Bar. III. RECOMMENDATION AS TO GUILT: Based upon Respondent s admissions as to The Florida Bar File No ,046(11M) and ,934(11M), I recommend that Respondent be found guilty of violating Rules (Misconduct & Minor Misconduct), 3-6.1(e) (Client Contact), (Safekeeping Property), (Responsibilities of Partners, Managers, and Supervisory Lawyers), (Responsibilities Regarding Nonlawyer Assistants), 4-8.4(a) (A lawyer shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another), (Trust Accounts), and (Trust Accounting Records and Procedures) of the Rules Regulating The Florida Bar. IV. RECOMMENDATION AS TO DISCIPLINARY MEASURES TO BE APPLIED: Having reviewed the record of these proceedings, I find that Respondent's plea and the recommendation of The Florida Bar as to terms of discipline are both fair to the Respondent and in the best interest of the public. Accordingly, Respondent's Consent Judgment and the term of discipline recommended by The Florida Bar are accepted and hereby adopted as the 6

7 recommendation of this Referee in this matter. Therefore, I recommend that Respondent be suspended from the practice of law for a period of three (3) years nunc pro tunc to October 16, 2006, the date of the emergency suspension order entered in Case No. SC as the final resolution of all matters referenced herein. V. PERSONAL HISTORY AND PAST DISCIPLINARY RECORD: Age: 36 Date Admitted to The Florida Bar: September 21, 1999 Prior disciplinary record: Respondent has never been the subject of any discipline other than the emergency suspension order entered in case no. SC , that is the predicate for this proceeding. VI. STATEMENT OF COSTS AND RECOMMENDATION AS TO THE MANNER IN WHICH COSTS SHOULD BE TAXED: I find that the following costs were incurred by The Florida Bar in this proceeding: Administrative costs Rule 3-7.6(q)(1)(I).. $ 1, Branch Auditor s Costs $ 3, Staff Investigators Costs. $ Court Reporter s attendance at Deposition of Gabriel Martin and Carlos Ruga held on May 17, 2007 and transcript. $

8 Invoice from Mellon United Bank for bank records requested $ TOTAL: $ 5, It is recommended that costs in the amount of $5, be assessed against Respondent. It is further recommended that execution issue with interest at the prevailing statutory rate to accrue on all costs not paid within 30 days of the entry of the Supreme Court's final order, unless time for payment is extended by the Board of Governors of The Florida Bar. Dated this day of HONORABLE MARC SCHUMACHER, Referee Copies furnished to: William Mulligan, Bar Counsel Richard Baron, Attorney for the Respondent Kenneth L. Marvin, Staff Counsel 8