In re Thomas Eisenstadt, No.BD-2012-067: Attorney Suspended after Keeping Clients’ Settlement Proceeds for Personal Use

A single justice of the Supreme Judicial Court (“SJC”) of Massachusetts has entered a judgment suspending a Boston attorney, after finding that he had misappropriated client funds.  In the matter of Thomas Eisenstadt, a lawyer received settlement payments on behalf of two clients in unrelated matters and kept the money for himself.  He eventually paid the clients their shares, but as a result of his withholding fund, medical liens were not paid.

The Board of Bar Overseers (“BBO”) started investigation of the attorney after the clients reported him for withholding their settlements.  During the proceedings, the attorney could not fully comply with the BBO’s request for documents because his Interest on Lawyer’s Trust Account (“IOLTA”) records were not in compliance with Massachusetts Rules of Professional Conduct Rule 1.15.  The SJC also temporarily suspended the attorney during the pendency of the disciplinary proceedings, but he failed to obey the terms of the suspension.

The BBO then filed a petition for discipline with the SJC asking that the attorney be disbarred.  The attorney did not respond to the petition, but filed a memorandum prior to disposition, in which he sought a short term suspension and cited personal and family circumstances that justified attention during mitigation of his discipline.  At a hearing on the matter, he argued that he was unable to adjust to the new IOLTA requirements and that he should be permitted to continue practicing law with the stipulation that he take only cases that do not normally require the use of an IOLTA account.

Justice Cordy of the SJC held that although the circumstances surrounding the misconduct were unfortunate, the attorney should still be disciplined.  Thus, the Court rejected the Board’s recommendation of disbarment and suspended the attorney for two years.

Decision: In re Thomas Eisenstadt

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