91 A.3d 1078
Md.2014Background
- Michael D. Fraidin, a solo Baltimore attorney, was charged by the Attorney Grievance Commission with multiple violations based on misuse of his IOLTA (attorney trust) account and assisting his wife in filing false bankruptcy documents to stave off foreclosure.
- Evidence showed Fraidin commingled personal funds (including a $15,000 IRA liquidation) with client funds, made numerous cash withdrawals from the trust account, and issued “paychecks” drawn on the IOLTA to his wife though she had no employment records or independent income.
- Fraidin used trust-account funds to pay personal credit-card debts (including one in his own name) and to create documentation submitted in his wife’s Chapter 13 bankruptcy petition; many of the bankruptcy statements (e.g., $3,000/month income) were knowingly false.
- Fraidin was evasive and provided false and incomplete responses to Bar Counsel’s requests for records, forcing subpoenas; he did not call witnesses or testify at the disciplinary hearing.
- The hearing judge found, by clear and convincing evidence, violations of Md. Rules 16-606.1, 16-607, 16-609 and MLRPC 1.15, 8.1(a)/(b), and 8.4(a)-(d); the Court of Appeals affirmed and ordered disbarment.
Issues
| Issue | Plaintiff's Argument (Attorney Grievance) | Defendant's Argument (Fraidin) | Held |
|---|---|---|---|
| Did Fraidin violate trust-account record‑keeping rules (Md. Rule 16‑606.1)? | Fraidin failed to maintain required client ledgers and reconciliation. | Admitted incomplete records but disputed some accounting details. | Yes; incomplete, scattered records violated 16‑606.1. |
| Did Fraidin commingle/ misuse client funds (Md. Rules 16‑607, 16‑609; MLRPC 1.15)? | Deposited personal funds into IOLTA, withdrew cash, used funds for personal debts and paychecks to wife. | Claimed some deposits were for wife’s benefit as a client/employee. | Yes; commingling and prohibited cash withdrawals occurred; Rule 1.15 violations follow. |
| Did Fraidin make false/misleading statements and obstruct Bar Counsel (MLRPC 8.1)? | He knowingly misrepresented source/purpose of transfers and withheld required records. | Offered shifting explanations and delayed disclosures. | Yes; knowingly false statements and failure to timely cooperate violated Rule 8.1. |
| Did Fraidin engage in dishonesty/fraud by assisting in his wife’s bankruptcy filings (MLRPC 8.4(a)-(d))? | He prepared/ provided false financial information, forged the appearance of employment and used IOLTA checks to substantiate income—constituting a scheme to defraud the Bankruptcy Court. | Denied being attorney of record and argued statements were not required on forms. | Yes; aided scheme to submit false bankruptcy documents; violated 8.4(a)-(d). |
Key Cases Cited
- Attorney Grievance Comm’n v. Jarosinski, 411 Md. 432 (Court affirms de novo review of conclusions; hearsay to be treated with deference to trial judge on credibility)
- Attorney Grievance Comm’n v. Snyder, 368 Md. 242 (misappropriation/commingling in bankruptcy context warrants 8.4 violations)
- Attorney Grievance Comm’n v. Byrd, 408 Md. 449 (filing false bankruptcy reports under oath supports disbarment for 8.4(b),(c),(d))
- Attorney Grievance Comm’n v. Zodrow, 419 Md. 286 (false or misleading testimony and concealment in bankruptcy demonstrates fraud and warrants severe discipline)
- Attorney Grievance Comm’n v. DiCicco, 369 Md. 662 (depositing personal funds into trust account and using it personally violates Rule 1.15/16‑607)
- Attorney Grievance Comm’n v. Obi, 393 Md. 643 (cash withdrawals from trust accounts frustrate traceability and violate Rule 16‑609)
- Attorney Grievance Comm’n v. Nussbaum, 401 Md. 612 (using escrow accounts to pay personal debts constitutes intentional misappropriation and commingling)
- Attorney Grievance Comm’n v. Ellison, 384 Md. 688 (overlap between Title 16 trust rules and Rule 1.15; violations of Title 16 support Rule 1.15 violation)