PER CURIAM — The Grievance Committee for the Tenth Judicial District (hereinafter the petitioner) served the respondent with a verified petition dated July 13, 2016, containing two charges of professional misconduct. The respondent served and filed a verified answer dated August 29, 2016, in which he, inter alia, admitted the factual specifications supporting the charges. Related disciplinary proceedings were commenced against each of the respondent’s partners (see Matter of Sosnik, _____ AD3d _____ [decided herewith] and Matter of Hausman, _____ AD3d _____ [decided herewith]). By agreement of the respondent and his partners, a joint disciplinary hearing was conducted on May 18, 2018. In separate reports dated July 6, 2018, the Special Referee sustained all charges against the respondent and his partners. The petitioner now moves to confirm the Special Referee’s report, which sustained the charges, and to impose such discipline as this Court deems just and proper. The respondent’s counsel has submitted an affirmation in support of the petitioner’s motion to confirm, together with a memorandum of law, and urges the Court to grant the motion, sustain the charges, and impose a public censure.
The PetitionCharge one alleges that the respondent misappropriated client funds, in violation of rule 1.15(a) of the Rules of Professional Conduct (22 NYCRR 1200.0), as follows:1. In or about 1994, the respondent and his fellow shareholders and partners, Michael J. Hausman and Howard L. Sosnik, formed the law firm Karol, Hausman & Sosnik, P.C. (hereinafter the Firm).2. At all relevant times herein, the respondent and his partners maintained and were signatories on an attorney escrow account at JPMorgan Chase Bank incident to the Firm’s law practice, entitled “KAROL HAUSMAN & SOSNIK, P.C. Attorney Escrow Account” and bearing account number xxxx0565 (hereinafter the escrow account).3. At all relevant times herein, the Firm employed Soncerie Cornegy as its office manager.4. The respondent and his partners delegated to Cornegy, among other things, responsibility for maintaining the bank and bookkeeping records for the escrow account.5. The respondent failed to properly review, audit and reconcile the escrow account, and he did not properly supervise Cornegy’s activities with respect to the escrow account.6. On or about May 2, 2013, the Firm was notified that check number 6643, issued from the escrow account to 845 Grand Street Associates, LLC, a client of the Firm, for $93,202.04, was presented for payment against the escrow account and dishonored due to insufficient funds.7. By letter dated May 7, 2013, Sosnik, on behalf of the Firm, reported the dishonored check to the petitioner.8. With the May 7, 2013 letter, Sosnik provided documentation establishing that the dishonored check was caused by an inadvertent over-disbursement at a real estate closing for which the Firm was representing 845 Grand Street Associates, LLC, as the seller.9. The respondent and his partners were each notified by the petitioner that sua sponte investigations had been opened against them and they were requested to submit bank and bookkeeping records for the escrow account.10. The respondent and his partners advised the petitioner that at or about the time the Firm self-reported the dishonored check on May 7, 2013, it was discovered that Cornegy had engaged in unauthorized financial transactions involving, among other things, the Firm’s bank accounts, including the escrow account.11. On or about May 8, 2013, the respondent and/or his partners identified outstanding escrow checks and determined that, as of that date, the balance in the escrow account was deficient by at least $80,000.12. On or about May 8, 2013, the respondent and his partners deposited $100,000 in personal funds into the escrow account to cover the identified outstanding escrow checks.13. The Firm retained the accounting firm Hoberman, Goldstein & Lesser, CPAs, P.C. (hereinafter the Accounting Firm), to reconcile and reconstruct the escrow account.14. The respondent and his partners were advised that the Accounting Firm’s reconstruction of the escrow account dating back to 2008 revealed that the account was still deficient by $102,530.43, even after taking into account the referenced $100,000 deposited by the partners.15. On or about November 26, 2013, the Firm deposited $102,530.43 into the escrow account to offset the remaining deficiency.Charge two alleges that the respondent failed to adequately supervise the work of a nonlawyer employee of the Firm, in violation of Rules of Professional Conduct (22 NYCRR 1200.0) rule 5.3(a), and is responsible for that nonlawyer employee’s conduct, under Rules of Professional Conduct (22 NYCRR 1200.0) rule 5.3(b)(2)(ii), as follows:16. The factual specifications of Charge One, paragraphs 1 through 15, are repeated and re-alleged, as if more fully set forth herein.17. The respondent failed to exercise the reasonable management or supervisory authority over Cornegy by which the respondent should have known of Cornegy’s conduct with respect to the escrow account, at a time when the consequences of that conduct could have been avoided or mitigated.
