Attorney Grievance Commission v. Hodes, 105 A.3d 533

Background

Michael C. Hodes, a Maryland lawyer admitted in 1975 who practiced elder law, represented Gloria S. Ominsky from 2005 until her death in Feb. 2011 and was named Personal Representative and Trustee under her 2009 will.
After probate and liquidation of estate assets, Hodes (as Trustee) opened the Ominsky Irrevocable Trust account in March 2012 and deposited ~$375,355; within days he issued trust checks including $270,000 to Mikelen Gallery, LLC (an entity he and his wife owned) and $3,500 to his financial consulting business; $265,000 was quickly transferred from Mikelen to his personal joint account and used to pay personal debts.
Shortly after Ominsky’s death (Feb. 2011) Hodes also issued two personal-account checks—$14,500 to his consulting firm and $775 to his wife—which the hearing judge found were backdated and unearned.
HPK (his former firm) investigated; documents (promissory note, assignment, guaranty, invoices) were created or backdated after the transfers, and the judge found Hodes had instructed staff to prepare post hoc documentation to justify the payments.
Hodes gave a sworn statement during Bar Counsel’s investigation asserting a personal guaranty and other justifications; the hearing judge found he gave false testimony. Hodes made restitution of $270,000 in May 2012 (partly via firm payments conditioned on repayment) but did not convincingly mitigate wrongdoing.

Issues

Issue	Plaintiff's Argument (Attorney Grievance)	Defendant's Argument (Hodes)	Held
Whether Hodes violated Rule 1.7 (conflict of interest/self‑dealing as attorney and trustee)	Hodes self‑dealt: removed trust funds and diverted estate assets for personal use, materially limiting loyalty to client/beneficiaries	Hodes claimed transactions were loans/authorized, or were personal (not subject to MRPC) and thus not conflicts	Held: Violation — Hodes’s personal interests and self‑dealing breached loyalty; Rule 1.7 applies to his attorney/trustee roles
Whether Hodes violated Rule 1.15(d) and §10‑306 (misuse/misappropriation of client/trust funds)	He improperly removed trust and client funds and failed to deliver trust money to intended charitable foundation	Hodes argued the will allowed loans, or that his acts were permissible trustee/investment decisions	Held: Violation — improper, knowing use of trust funds for personal debts; Rule 1.15(d) and §10‑306 breached
Whether Hodes made false statements in disciplinary investigation (Rule 8.1)	He falsely testified about existence/execution of a guaranty and other documents created post‑investigation	Hodes denied lying and maintained his explanations (loan, guaranty, consultations)	Held: Violation — Judge found false sworn testimony about the guaranty and related documents
Whether Hodes engaged in dishonesty/fraud/prejudicial conduct (Rule 8.4(a),(b),(c),(d)) and whether criminal embezzlement standard met	Conduct (backdating, post hoc invoices, transfers to personal entities) was dishonest, fraudulent and prejudicial; equates to conduct punishable under embezzlement statute	Hodes characterized transfers as loans, argued procedural/system issues and that some paperwork was contemporaneous or permissible	Held: Violations — clear and convincing evidence of deceit, fraud, and conduct reflecting adversely on fitness to practice; embezzlement elements satisfied; sanction: disbarment

Key Cases Cited

Attorney Grievance Comm’n v. Sachse, 345 Md. 578 (1997) (trustee duty of loyalty and prohibition on self‑dealing)
Attorney Grievance v. Owrutsky, 322 Md. 334 (1991) (attorney disciplined for loaning trust funds to himself; trustee misappropriation)
Attorney Grievance v. Whitehead, 405 Md. 240 (2008) (misappropriation of conserved/trust funds and self‑dealing supports discipline)
Attorney Grievance v. Seltzer, 424 Md. 94 (2011) (deceitful conduct and misappropriation outside core legal work falls within disciplinary rules)
Attorney Grievance v. Vanderlinde, 364 Md. 376 (2001) (intentional dishonest conduct typically warrants disbarment)