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Attorney Grievance Commission of Maryland v. Jalloh

Court of Appeals of Maryland

August 29, 2018

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
JENEBA JALLOH (GHATT)

          Argued: April 10, 2018

          Circuit Court for Prince George's County Case No. CAE17-07833

          Barbera, C.J. Greene, Adkins, McDonald, Watts, Hotten, Getty, JJ.

          OPINION

          Getty, J.

         This attorney disciplinary matter concerns a Maryland-barred attorney who acted as a facilitator in a complex money laundering scheme that induced investors to advance funds in exchange for a false promise of a full return of the advanced fees and a future construction loan under the guise of an escrow agreement. Specifically, Respondent Jeneba Jalloh Ghatt[1] ("Respondent" or "Ms. Ghatt") agreed that her law firm would serve as escrow agent, which in effect converted her attorney trust account into a repository for the advanced fee scam. Although Respondent may not have initially been a knowing participant involved in the complex fraudulent scheme, she ultimately became complicit in the scam when she failed to verify and safeguard the advanced funds and then misrepresented her disbursements of those funds. For these reasons, we disbar Ms. Ghatt.

         On March 9, 2017, the Attorney Grievance Commission of Maryland ("Commission"), through Bar Counsel, filed with this Court a Petition for Disciplinary or Remedial Action ("Petition") against Ms. Ghatt. The Commission charged Respondent with violating Rules 1.15 (safekeeping property), 3.3 (candor to the tribunal), 8.1 (bar admission and disciplinary matters), and 8.4(a)-(d) (misconduct) of the Maryland Lawyers' Rules of Professional Conduct ("MLRPC").[2] The Petition also alleged the Respondent violated former Maryland Rules 16-607 (commingling of funds) and 16-609 (prohibited transactions), [3] as well as Sections 10-306 (misuses of trust money) and 10-606 (penalties) of the Business Occupations and Professions Article of the Maryland Code. After the complaint was filed, Ms. Ghatt obtained the law firm Cunningham & Associates, PLC to represent her in the attorney grievance matter.

         Pursuant to Maryland Rule 19-722, this Court designated the Honorable Krystal Alves of the Circuit Court for Prince George's County to conduct an evidentiary hearing ("the attorney grievance hearing" or "hearing") and to provide findings of fact and recommended conclusions of law. After being served with a copy of the Petition, Ms. Ghatt filed a Motion to Dismiss on June 6, 2017. After the circuit court denied the motion to dismiss, Respondent filed an Answer to the Petition on July 6, 2017. After the conclusion of discovery, Ms. Ghatt filed a Motion for Partial Summary Judgment, which the circuit court denied by order dated October 23, 2017. The attorney grievance hearing was held on October 23, 24, 25 and 26, 2017. Although she had previously obtained counsel, Ms. Ghatt represented herself throughout the attorney grievance hearing.

         The attorney grievance hearing judge issued findings of fact and recommended conclusions of law on January 23, 2018. Specifically, the hearing judge concluded that the Respondent violated MLRPC 1.15(a), (b), (d), and (e); 3.3(a)(1); 8.1; and 8.4(a), (b), (c), and (d). In addition, the hearing judge further concluded that Ms. Ghatt violated former Maryland Rules 16-607 and 16-609 as well as Sections 10-306 and 10-606 of the Business Occupations and Professions Article ("BOP") of the Maryland Code.

         Respondent filed exceptions to the hearing judge's findings of fact and recommended conclusions of law. Ms. Ghatt takes four extensive exceptions to the hearing judge's factual findings, arguing that the circuit court adopted the proposed findings of facts and conclusions of law submitted by the Commission in its entirety. In addition, Respondent excepts to the hearing judge's recommended conclusions of law regarding MLRPC 1.15, 3.3, 8.1, and 8.4 as well as Sections 10-306 and 10-606 of the Business Occupations and Professions Article. Ms. Ghatt does not take exception to the hearing judge's recommended conclusion that she violated former Maryland Rules 16-607 and 16-609. Ultimately, Ms. Ghatt requests that this Court impose a reprimand as the appropriate sanction in this case because she alleges the only violation was commingling of funds. On April 10, 2018, this Court heard oral arguments in this matter. Ms. Ghatt appeared and argued on her own behalf.

         BACKGROUND

         We summarize the hearing judge's findings of fact and the record submitted at the attorney grievance hearing as follows.

         Ms. Ghatt's Law Practice

         Ms. Ghatt was admitted to the Maryland Bar on December 16, 1998. After being admitted to the Bar of this Court, Ms. Ghatt worked as a staff attorney at Georgetown University Law Center, a lawyer at Willkie Farr & Gallagher, LLP, then served as assistant general counsel to the District of Columbia Office of Cable, Television, and Telecommunications. In 2007, Ms. Ghatt opened her own law firm, the Ghatt Law Group, LLC, in Prince George's County, Maryland. At the time she formed her solo law practice, Ms. Ghatt also formed what she called Strategic Partnership, which was an informal referral system between herself and two other out-of-state attorneys. During the period pertinent to this case, Ms. Ghatt worked as a solo practitioner at the Ghatt Law Group. Ms. Ghatt supplemented her solo practice with work as a blogger, columnist, and speaker.

         In June 2007, Ms. Ghatt opened an attorney trust account at Citibank in the name of the Ghatt Law Group, LLC. The Ghatt Law Group attorney trust account has an account number ending in 8589. Ms. Ghatt signed a CitiEscrow Control Account Application, which provided that the Control Account Title was the Ghatt Law Group, LLC Attorney Trust. Ms. Ghatt also signed a General Deposit Resolution for Limited Liability Company, in which Ms. Ghatt listed herself as the sole signatory with authority to control and access the attorney trust account.

         Escrow Agent Agreement with the Chore Group, LLC

         Ms. Ghatt entered into an "Escrow Agreement" with Strategic Capital Enterprises (a Delaware limited liability company) and Zion Capital, Inc. (a Maryland corporation) that provided for funds to be deposited in escrow to the attorney trust account of the Ghatt Law Group, serving as the "Escrow Agent." The Escrow Agreement was signed by Zion Capital Ventures and Strategic Capital, LLC as a collective joint venture entitled "The Chore Group, LLC." The name Solomon Jalloh ("Mr. Jalloh), who Ms. Ghatt acknowledged is her brother, appears underneath the collective joint venture signature line as program manager and JV partner and principal. The Chore Group dated the Escrow Agreement on September 1, 2014. Although a signature line for the Ghatt Law Group, LLC, identifying Jeneba Jalloh Ghatt as managing partner, also appears on the Escrow Agreement, the signature and date line of the copy in the record appear blank.

         The Escrow Agreement further provided that "the Escrow Agent is authorized to use the following funds transfer instructions to disburse funds without a verifying call-back []. If distribution is in accordance with this Section [], by providing written instructions to the Escrow Agent in the form of Exhibit A, no call-back [] is required." Exhibit A to the Escrow Agreement was a Disbursement Request form, which states that a certain specified amount will be disbursed from the Ghatt Law Group's attorney trust account to an account identified by either Strategic Capital or Zion Capital. The Escrow Agreement also indicated that the "parties hereto agree that escrow fees shall be due and payable in the amount of $1, 000.00 each month, and .05% of any disbursement upon which Escrow Agent must be a signatory of any agreement related to the release and control of funds."

         As such, a plain reading of the Escrow Agreement indicates that Ms. Ghatt agreed to disburse an amount specified by Strategic Capital or Zion Capital from her firm's attorney trust account to an account also identified by Strategic Capital or Zion Capital. In return, Ms. Ghatt would receive $1, 000 each month as well as half a percent of any disbursement that requires Ms. Ghatt to sign an agreement relating to the disbursement.

         Grove Construction Management, LLC and Grove Plaza, LLC

         Kraig Robinson was a partner of Grove Construction Management, LLC, a company owned by himself and Lyle Kenney ("Mr. Kenney") as equal partners. Mr. Robinson stated that Grove Construction Management assists clients in designing buildings. Mr. Robinson's role in Grove Construction Management was to deal with the contractors and engineers as well as supervise the field construction. Around 2008 or 2009, Grove Construction Management wanted to build a 45, 000 square foot warehouse building on a piece of property adjacent to the company's current offices. In pursuit of that goal, the company obtained an appraisal of the building, which concluded that the project would cost $5, 000, 000.

         Mr. Robinson and Mr. Kenney from Grove Construction Management, LLC contacted Gene Parrish from New Freedom Group, LLC, who indicated that he knew a company that could assist with funding the warehouse building project. New Freedom Group explained to Grove Construction Management that the funding company, Strategic Capital, required an appraisal and ten percent of the appraisal amount upfront. Therefore, Mr. Robinson anticipated that Strategic Capital would provide the complete funding amount, $5, 000, 000, as long as Grove Construction Management submitted the appraisal and ten percent of the funding amount, $500, 000.

         Mr. Robinson spoke with James C. Yates ("Mr. Yates" or "James Yates"), who he had met in either 2011 or 2012 after buying a piece of equipment from him. After discussing the warehouse building project, Mr. Yates agreed to provide $500, 000 to secure the funding in exchange for becoming an equity partner of Grove Construction Management, LLC or for a lump sum fee of $100, 000.

         After Mr. Yates agreed to pay the initial $500, 000, Mr. Robinson contacted New Freedom Group and Strategic Capital Enterprises about how the process would work. Gene Parrish from New Freedom Group explained that Mr. Yates's $500, 000 would be placed in the Ghatt Law Group's attorney trust account and that nobody would be able to encumber that deposit. As such, Mr. Robinson believed that if the warehouse building project was not funded by February 1, 2015, then Grove Construction Management would submit a written request to the Ghatt Law Group to wire the funds directly to Mr. Yates, refunding him in full. Mr. Robinson testified that it was his understanding that if the deal did go through, then Strategic Capital would release $5, 000, 000 to Grove Construction Management in order to fund the project and to return $500, 000 to Mr. Yates. In other words, Mr. Robinson believed that Mr. Yates's $500, 000 would be fully refundable and not be at risk. Mr. Robinson stated that he discussed this with Mr. Yates.

         Pursuant to the common goals of funding and building the warehouse building, the parties created a limited liability company named Grove Plaza, LLC. Specifically, the parties executed an Limited Liability Company Agreement on January 25, 2015. The limited liability company agreement included the following members: Strategic Capital Enterprises, Inc.; Kraig Robinson; Lyle Kenney; and New Freedom Group. Each of the members signed the limited liability company agreement with Ken Phillips ("Mr. Phillips") signing on behalf of Strategic Capital Enterprises, Inc. and Gene Parrish signing on behalf of New Freedom Group, LLC.

         Escrow Agent Agreement with Grove Plaza, LLC and Strategic Capital Enterprises

         Ms. Ghatt entered into a second "Escrow Agreement" with "Strategic Capital Enterprises, Inc[.], a corporation organized under the laws of New Jersey," "Grove Plaza, LLC, a Utah limited liability company[, ]" and the "Ghatt Law Group[.]" The second Escrow Agreement provided an effective date of December 1, 2014.[4] The Escrow Agreement stated that the "parties hereby appoint the Ghatt Law Group as the Escrow Agent[.]" Mr. Phillips signed the agreement on December 4, 2014 on behalf of Strategic Capital Enterprises, Inc. Kraig Robinson signed the agreement on behalf of Grove Plaza, LLC on December 2, 2014. However, the signature line for the Ghatt Law Group (Escrow Agent) appears blank and undated.[5]

         This second Escrow Agreement provided the following purpose of the escrow agreement:

to hold and to disburse the proceeds of $500, 000.00 deposited into escrow by Grove Plaza, LLC to be disbursed to Strategic Capital Enterprises, Inc. once Ghatt Law Group has verified $500, 000 has been deposited into a sub-account opened in the name of Grove Plaza, LLC and Ghatt Law Group has delivered 1) CONFIRMATION OF DEPOSIT LETTER, and 2) a copy of the LETTER OF AUTHORIZATION - ACTION REQUIRED document from Citi Private Bank to Grove Plaza, LLC, Strategic Capital Enterprises, Inc., and New Freedom Group, LLC as the two conditions to the release of escrow.

         The agreement further indicated that the "[d]eposit of $500, 000.00 will be used by Strategic Capital Enterprises, Inc. to pay the costs associated with the cash deposit at Citi Private Bank, financial transaction and banking fees related to the JOINT VENTURE[6] acquisition of financing, with any additional escrow proceeds to be disbursed pursuant to this Escrow Agreement."

         The Escrow Agreement instructed the Ghatt Law Group, as escrow agent, to provide a "'Notification of the Escrow Cash Deposit' to Grove Plaza, LLC, Strategic Capital Enterprises, Inc[.] and New Freedom Group, LLC ('Exhibit A')" on the same business day that the $500, 000 is wired to the Ghatt Law Group's Citibank attorney trust account, ending in number 8589. Within seven days of Ms. Ghatt's confirmation, the agreement indicated that Strategic Capital would deposit $500, 000.00 into a "sub-account at Citi Private Bank in the name of Grove Plaza, LLC and cause Citi Private Bank to notify Escrow Agent."

         Once Ms. Ghatt verified that Strategic Capital had deposited $500, 000 into a Citi Private Bank "sub-account" of her attorney trust account, Ms. Ghatt was to send a "Confirmation of Deposit" and a "Letter of Authorization - Action Required" to all parties and "immediately disburse the $500, 000.00 to Strategic Capital Enterprises, Inc. as instructed by an authorized representative of Strategic Capital Enterprises, Inc."

         Under a section entitled "Escrow Disbursement Instructions," the second Escrow agreement indicated that the "Parties recognize the sub-account at Citi Private Bank is a sub-account of the Ghatt Law Group. Any and all questions regarding the sub-account or of the banking relationship of the Ghatt Law Group with Citi Private Bank are to be directed to the Ghatt Law Group. The Ghatt Law Group will accommodate any questions and or verifications regarding the accounts." Further, the agreement provided that "[a]ny attempt to make direct contact with Citi Private Bank without the direct, written consent of the Ghatt Law Group will be cause for immediate termination of the Escrow Agreement and of the related transaction."

         The Escrow Agreement also stated that the "Escrow Agent is hereby instructed that if the notification of the $500, 000.00 deposited into Grove Plaza, LLC's account at Citi Private Bank is not received by the Escrow Agent within seven (7) days from the date the [cash from Grove Plaza, LLC] is received" in the attorney trust account, then "the Escrow Agent shall immediately return the $500, 000.00 by wire transfer to the banking coordinates of Grove Plaza, LLC to the account where the $500, 000.00 [] originated."

         Pursuant to the stated purpose and provisions of the second Escrow Agreement, the agreement provided an Exhibit A, Notification of the Escrow Cash Deposit, which appears to be an undated version of the notification document that Ms. Ghatt was required to send to all the parties once James Yates wires $500, 000 on behalf of Grove Plaza, LLC to the Ghatt Law Group's attorney trust account.

         The second Escrow Agreement also has an Exhibit B, Confirmation of Deposit/ Terms of Disbursement, which appears to be an unsigned version of the document Ms. Ghatt was required to send to all parties once she received notice that Strategic Capital had placed $500, 000 into a separate sub-account at Citi Private Bank. The Confirmation of Deposit exhibit is dated December 1, 2014 and is to the attention of Kraig Robinson and Grove Plaza, LLC. However, the letter is addressed "Dear Jim[.]" The Confirmation of Deposit stated that Ms. Ghatt "personally verified the Citi Private Bank Letter of Authorization - Action Required document from Citi Private Bank" and "ha[d] confirmed:" (1) A sub-account has been opened in the name of Grove Plaza, LLC at Citibank; (2) $350, 000 has been deposited into the account; and (3) the Beneficiary of the sub-account is James Yates. (Emphasis added). The Confirmation of Deposit further provided:

The funds in the account will be released upon the earliest occurrence of one of the following three events: A. The funding of the $5, 000, 000 loan to Grove Plaza, LLC. . . . B. Should the loan from Strategic Capital Enterprises, Inc. in the amount of $5, 000, 000 to Grove Plaza, LLC not fund on or before February 1, 2015, the $350, 000, upon written request from Grove Plaza, LLC to The Ghatt Law Group, will be wired immediately to James Yates . . . C. The Expire date occurs. Upon expiration of the account the funds will be disbursed to the Beneficiary.

         As is clear from Exhibit B, in its unaltered state, the Confirmation of Deposit read that $350, 000 had been deposited into a sub-account and that amount would be returned once the $5 million loan did not fund and Mr. Robinson or Mr. Yates submitted a written request for the return of the funds. Ms. Ghatt later testified that she should have edited this amount to read $500, 000 as this was the amount Strategic Capital alleged was required to obtain the loan.

         Also attached was Exhibit C, a Letter of Authorization - Action Required, which appears to be a blank version of a document purporting to be a bank institution's authorization of a transfer of funds from one bank account to another. The header of the Letter of Authorization reads as follows:

The Bank
Client Services
Address of the bank
New York, New York 10005

         In the body of the Letter of Authorization, there are blank spaces for the "Main Account of Investment Firm providing Financial Guarantee" along with the corresponding blank space for the bank account number. There is also a space for the "Sub-Account Name" and the "Sub-Account Number[.]" Exhibit C indicated that the "letter is regarding the distribution to the beneficiaries of Borrower and may be used as my Letter of Authorization to make the appropriate distribution of the funds in the above referenced account []." The letter then has blank spaces for the beneficiary name, beneficiary percentage, and beneficiary address. The Letter of Authorization included a section stating, "Please indicate how you would like to receive your distribution share (check one)[.]" The letter also has an already marked box next to the option for transferring to a bank with a line for the beneficiary to put the account name, account number, and routing number.

         Exhibit D to the second Escrow Agreement is untitled. However, the document states that "[t]his is the information that will be used to open the account at Citi Private Bank and for receiving funds." The document then lists the account name as Grove Plaza, LLC, and the signatory name as Kraig D. Robinson. Exhibit D then indicates that "upon distribution the funds are to be wired to:" James Yates as beneficiary, under a James C. Yates account name, with a specific account number and routing number.

         The second Escrow Agreement along with the four exhibits (Exhibit A through Exhibit D) constitute the entire twelve-page agreement between Strategic Capital Enterprises, Inc, Grove Plaza, LLC, and the Ghatt Law Group as Escrow Agent.

         Events following the Escrow Agreements

         On December 3, 2014, Mr. Yates wired $500, 000 from his Commonwealth financial network account to the Ghatt Law Group Citibank account, which has an account number ending in 8589. The wire instructions from Mr. Yates specifically noted additional banking information that further credit was to Grove Plaza/Strategic Capital. In addition to Mr. Yates's signature, an advisor/staff of Commonwealth financial network signed and dated the wire request form on December 3, 2014. The Ghatt Law Group's attorney trust account statement from December 2014 reflects that prior to December 3, 2014, the account held $151.73. The statement also showed that the attorney trust account received a funds transfer from James Yates in the amount of $500, 000 on December 3, 2014. As such, the attorney trust account statement reflected a balance of $500, 151.73 on December 3, 2014.

         After Mr. Yates wired the $500, 000 to the Ghatt Law Group Citibank account on December 3, 2014, Ms. Ghatt edited and completed the blank exhibits to the second Escrow Agreement. Ms. Ghatt re-dated the exhibits, signed the exhibits, and then sent them to the parties in her role as escrow agent. Specifically, Ms. Ghatt dated Exhibit A, the Notification of the Escrow Cash Deposit, on December 3, 2014. The Notification still had a header noting "EXHIBIT A," and further stated that the "Ghatt Law Group received an Escrow Cash Deposit from Grove Plaza, LLC in the amount of $500, 000. These funds will be held as per the terms of the Escrow Agreement between Strategic Capital Enterprises, Inc., Grove Plaza, LLC, and THE GHATT LAW GROUP." Ms. Ghatt testified that she did, in fact, send the dated version of the Notification of the Escrow Cash Deposit to the following parties per the instructions of the second Escrow Agreement: Grove Plaza, LLC, Strategic Capital Enterprises, Inc., and New Freedom Group, LLC.

         Ms. Ghatt also completed Exhibit B to the second Escrow Agreement, the Confirmation of Deposit, [7] which Ms. Ghatt dated December 1, 2014. The Confirmation of Deposit stated that it is to the attention of Kraig Robinson and Grove Plaza, LLC. Moreover, the Confirmation of Deposit stated that Ms. Ghatt has "personally verified the Citi Private Bank Letter of Authorization - Action Required document from Citi Private Bank (attached hereto)[.]" The Confirmation of Deposit also provided the following: the Bank Ref Code was 61XXXXXX; that a sub-account had been opened in the name of Grove Plaza, LLC; that $350, 000[8] had been deposited into the account; the beneficiary of the sub-account was James Yates; the account was to expire on December 5, 2015; and no third party had access to the account.

         The Confirmation of Deposit further stated that the funds in the account would be released on the earliest of one of the following three events: (1) the funding of the $5, 000, 000 loan to Grove, Plaza, LLC, upon which the $350, 000 in the account will be returned to Strategic Capital Enterprises, Inc.; (2) should the loan of $5, 000, 000 not fund on or before February 1, 2015, the $350, 000 would be wired immediately to James Yates upon written request from Grove Plaza, LLC to The Ghatt Law Group; or (3) the expire date occurs, upon which the funds will be distributed to "the Beneficiary[, ]" James Yates. In addition, the Confirmation provided "Instructions for Distribution," which stated:

Should the loan not fund on or before the 1st day of February, 2015 please make a written request for the distribution of the $500, 000, attach a copy of the Letter of Authorization - Action Required document with the information for distribution filled in and The Ghatt Law Group shall be responsible for the finds in the amount to be immediately wired to James Yates as per your instruction.

         Ms. Ghatt signed the Confirmation of Deposit at the end of the document.

         Attached to the Confirmation of Deposit was the completed version of Exhibit C to the second Escrow Agreement: the Letter of Authorization - Action Required. The header provided the Citibank logo followed by Client Services, 111 Wall Street, New York, New York 10005. The Letter of Authorization was dated December 5, 2014. The Letter purported to show that the individually-managed account ("IMA") name was Ghatt Law Group, the primary account number was *****8589, the sub-account name was Grove Plaza, LLC, the sub-account number was 4488-805, and the bank reference number was 6100052992.[9] The Letter stated that the beneficiary name was Grove Plaza, LLC and that the beneficiary percentage as 100% of the $500, 000. There were blank spaces left open for the beneficiary to indicate how he would like to receive the distribution.

         After Ms. Ghatt sent the completed versions of the exhibits attached to the second Escrow Agreement to the parties, Ms. Ghatt started wiring money out of The Ghatt Law Group attorney trust account to Strategic Capital Enterprises beginning on December 5, 2014. The Ghatt Law Group attorney trust account statement from December 2014 specifically showed that Ms. Ghatt[10] wired $50, 000 out of her attorney trust account to Strategic Capital Enterprises on December 5, 2014. Subpoenaed documents related to The Ghatt Law Group attorney trust account from Citibank also revealed that Ms. Ghatt transferred another $50, 000 to a Morgan Stanley account owned by Zion Capital on December 8, 2014. The subpoenaed Citibank documents further showed that Ms. Ghatt wired out $399, 860.83 to Strategic Capital Enterprises on December 9, 2014. Overall, Ms. Ghatt disbursed a total of $449, 860.83 to Strategic Capital and $50, 000 to Zion Capital, which totals $499, 860.83.[11] After Ms. Ghatt wired the money to Strategic Capital and Zion Capital, Ms. Ghatt received a funds transfer in the amount of $5, 000 into the Ghatt Law Group attorney trust account from Strategic Capital Enterprises for her services as an escrow agent.[12]

         In addition to the specific wire transfers of Mr. Yates's $500, 000, Ms. Ghatt continued to accept wire transfers related to other investments and then disbursed the funds to accounts held by either Strategic Capital Enterprises or Zion Capital. These transactions continued from January 2015 to May 2015, at which time the attorney trust account was closed. At one point, Ms. Ghatt incurred a negative balance on the Ghatt Law Group attorney trust account in January 2015 when she disbursed $125, 000 twice.[13]

         Ms. Ghatt testified that she received instructions from Strategic Capital in emails and phone calls to wire certain amounts transferred into her attorney trust account to other accounts. Therefore, the hearing judge found that Ms. Ghatt's true role as escrow agent was her unquestioning use of the Ghatt Law Group attorney trust account, which was ultimately at the disposal of Strategic Capital and Zion Capital. In addition, the hearing judge found by clear and convincing evidence that Ms. Ghatt's argument that her actions were governed by the two escrow agreements and that she followed those instructions was not credible because she did not enter into the escrow agreement with Grove Plaza, LLC until December 10, 2014, by which time she had already received and disbursed Mr. Yates's $500, 000 from the attorney trust account.

         Ms. Ghatt also made debit card purchases from the attorney trust account after Mr. Yates had wired $500, 000 into the account. Specifically, Ms. Ghatt made a $13.28 and purchase at Old Navy on December 3, 2014 and a $132.62 purchase from Amazon on December 9, 2014. In addition, Ms. Ghatt made an ATM withdrawal of $60 on December 12, 2014 and another ATM withdrawal of $40 on December 17, 2014. Ms. Ghatt continued to make additional ATM withdrawals and conduct personal transactions from December 2014 to May 2015. As such, the hearing judge found by clear and convincing evidence that Ms. Ghatt improperly used the Ghatt Law Group attorney trust account as her personal bank account.

         The hearing judge also found by clear and convincing evidence that there was never a "sub-account" as described in the second Escrow Agreement, Confirmation of Deposit, or the Letter of Authorization. The hearing judge further found that Ms. Ghatt never opened a sub-account under her attorney trust account. Instead, Ms. Ghatt contended that someone other than her was to open the sub-account and that she relied on the Confirmation of Deposit and Letter of Authorization dated December 1, 2014 as evidence that a sub-account with $500, 000 was created. The hearing judge found that the Confirmation of Deposit and Letter of Authorization did not confirm any such sub-account. As such, the hearing judge found by clear and convincing evidence that Ms. Ghatt made multiple misrepresentations as to the existence of a sub-account when she sent the December 1, 2014 Confirmation of Deposit and Letter of Authorization to the parties, which indicated in pertinent part: "I have personally verified the Citi Private Bank Letter of Authorization - Action Request document from Citi Private Bank (attached hereto) and have confirmed: 1. A sub-account has been opened in the name of Grove Plaza, LLC at Citibank." (Emphasis added).

         The $5, 000, 000 loan did not fund on February 1, 2015. Two days later, Mr. Robinson, Mr. Kenney, along with Strategic Capital and New Freedom Group signed a "resolution" that extended the last day for funding to February 5, 2015. The resolution specified that Strategic Capital would provide $5, 500, 000 to Grove Plaza, LLC of which $500, 000 would be wired to Mr. Yates to repay his deposit in escrow. Mr. Yates was not a party to the resolution and did not sign the resolution. Subsequently, the loan did not fund or close on February 5, 2015 despite the averments in the resolution.

         Mr. Yates's Attorney Communications with Ms. Ghatt & the ...


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