THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of Robert Andrew Hedesh, Respondent.
Appellate Case No. 2015-001430
Opinion No. 27559
Submitted July 28, 2015 – Filed August 12, 2015
DEFINITE SUSPENSION
Lesley M. Coggiola, Disciplinary Counsel, and Ericka M.
Williams, Assistant Disciplinary Counsel, both of
Columbia, for Office of Disciplinary Counsel.
Robert Andrew Hedesh, Pro Se.
PER CURIAM: In this attorney disciplinary matter, respondent and the Office
of Disciplinary Counsel (ODC) have entered into an Agreement for Discipline by
Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary
Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court
Rules (SCACR). In the Agreement, respondent admits misconduct and consents to
the imposition of any sanction set forth in Rule 7(b), RLDE, Rule 413, SCACR.
We accept the Agreement and suspend respondent from the practice of law in this
state for ninety days. The facts, as set forth in the Agreement, are as follows.
Facts
The allegations set forth in the Agreement relate to respondent's actions as a
closing attorney. As further background information, respondent served as a
closing attorney for Belle Terre Title Company, which was located in a separate
suite in the same building as respondent's law office. Respondent's trust account
checks were housed in a locked cabinet in Belle Terre's suite. In October 2008,
there was a theft at Belle Terre's office and forty blank checks were stolen from the
checkbook for respondent's trust account. The theft was not discovered initially
because there was no forced entry to the office and the stolen checks were removed
from the back of the checkbook. Near the end of November 2008, respondent was
attempting to conduct a manual reconciliation of his trust account when he
discovered inconsistencies in the check numbers. An investigation led to the arrest
of the title agent's brother and two accomplices. The persons responsible for the
theft negotiated several of the stolen checks before being apprehended.
Respondent sought criminal charges against the perpetrators and filed a civil
lawsuit against them. Respondent also filed lawsuits against the banks that cashed
the stolen checks. Respondent deposited his own funds to cover some of the losses
in his trust account. Respondent cooperated at all times with law enforcement.
Matter I
In three closings, respondent failed to ensure the closing documents were recorded in
a timely manner. In a fourth closing, the closing documents were not recorded at
all. The lender recorded the documents without respondent's assistance, and as a
result, had to pay $7,000 in deed stamps for the transaction because respondent did
not have the money.
The transaction closed in September 2008, but the lender was not able to record the
documents until March 2009. During this period, respondent delegated the task of
recording the closing documents to the title agent with Belle Terre. Respondent
represents he supervised the process; however, he was not aware the documents
were not recorded until it was brought to his attention by the lender. Respondent
further represents he did not immediately have the funds for the deed stamps due to
the theft of his trust account checks but he fully intended to cover the losses in this
matter. However, the lender chose to immediately file the documents to protect its
interests. Respondent represents he had exhausted most of his personal funds and
his home equity line, and his only access at the time was to start taking cash from
his credit cards.
Matter II
On December 29, 2008, the computer system at the bank where respondent's trust
account was established indicated a check in the amount of $186,656.02 written on
respondent's trust account could not be paid due to insufficient funds. The
following day, respondent deposited a personal check for $10,000 into the account
so the trust account check could be negotiated. Respondent informed the bank
about the theft of trust account checks, and he signed affidavits of forgery for each
of the checks written by the perpetrators, totaling approximately $88,590.
Matter III
ODC received notice of a check written on insufficient funds from respondent's trust
account in the amount of $150.97. The check was written on August 11, 2008, but
not presented for payment until June 23, 2009. At the time the check was
presented, respondent's trust account was not in use and had a zero balance.
Respondent ceased use of the account in 2008 following the theft of checks.
Respondent represents he made contact with the payee of the check and resolved
the matter.
Matter IV
In January 2011, RBC Bank brought suit against respondent in federal court alleging
negligence and breach of fiduciary duty. The suit arose from respondent's role as
closing attorney in seventeen transactions occurring between January 17, 2008 and
August 19, 2008. In each case, RBC loaned funds that were used to purchase
residential properties. The transactions were part of an elaborate mortgage fraud
scheme where participants in the scheme recruited "straw buyers" to apply for a
loan to purchase property. A fraudulent loan application was prepared, supported
by fake documentation regarding the straw buyers' income or assets. Participants
in the scheme then induced appraisers to produce inflated appraisals. At closing,
loan proceeds were paid to participants in the scheme or companies controlled by
them. Thereafter, the loans went into default. A few payments were made on
some of the loans, but no payments were made on the remaining loans.
It is not alleged respondent participated in the loan scheme or even knew of the
scheme; however, at the time of the real estate transactions, all of the books and
records for respondent's real estate trust account were under the control and
custody of a title agent for Chicago Title Insurance Company. Respondent
permitted the title agent to write checks drawn on respondent's trust account for the
purpose of disbursing loan proceeds, and allowed the agent to reconcile and audit
the trust account. Respondent also permitted the title agent to prepare title
abstracts on each property, prepare HUD-1 statements for each transaction and
collect borrower contributions and payoff information. Respondent failed to
properly supervise the title agent in these transactions. The title agent was a key
participant in the mortgage fraud scheme.
Matter V
Respondent received $5,000 as an earnest money deposit from a potential
purchaser of real estate. The Contract of Sale for the property was signed by the
seller and purchaser on June 7, 2010, but the sale was not consummated. The
seller of the property requested that the earnest money be transferred to him
because the buyer had breached the terms of the sales contract. Respondent
informed the seller that respondent would need a release signed by the buyer, or a
court order, before respondent could release the money to the seller. The seller
filed a lawsuit against the buyer for breach of contract and requested the court
issue an order for the release of the $5,000 deposit to the seller. The seller was
unable to locate the buyer to serve the complaint so the lawsuit did not progress.
Respondent represents the $5,000 deposit is still being held in his trust account.
Law
Respondent admits that by his conduct he has violated the following Rules of
Professional Conduct, Rule 407, SCACR: Rule 1.3 (a lawyer shall act with
reasonable diligence and promptness in representing a client); Rule 1.15(a)(a
lawyer shall hold property of clients or third persons that is in the lawyer's
possession in connection with a representation separate from the lawyer's own
property, such funds shall be kept in a separate account, and complete records of
such funds shall be kept by the lawyer); Rule 5.3 (a lawyer who has supervisory
authority over a nonlawyer shall make reasonable efforts to ensure the person's
conduct is compatible with the professional obligations of the lawyer and the
lawyer shall be responsible for conduct of the person that would be a violation of
the RPC if engaged in by a lawyer); and Rule 8.4(a) (it is professional misconduct
for a lawyer to violate the Rules of Professional Conduct, knowingly assist or
induce another to do so, or do so through the acts of another). Respondent also
admits he has violated Rule 7(a)(1)(it shall be a ground for discipline for a lawyer
to violate the Rules of Professional Conduct or any other rules of this jurisdiction
regarding professional conduct of lawyers) of the Rules for Lawyer Disciplinary
Enforcement, Rule 413, SCACR. Finally, respondent admits he violated Rule 417,
SCACR (financial recordkeeping requirements).
Respondent states he has ceased doing any buyer related real estate work. He states
he has participated in less than five transactions in the last three years and those
involved preparing deeds related to work with other clients such as homeowners'
associations.
In addition to consenting to the imposition of any sanction in Rule 7(b), RLDE,
respondent also agrees to pay the costs incurred in the investigation and
prosecution of this matter by ODC and the Commission on Lawyer Conduct and to
complete the Legal Ethics and Practice Program Ethics School and Trust Account
School within nine months of the imposition of any sanction.
Conclusion
We accept the Agreement for Discipline by Consent and suspend respondent from
the practice of law in this state for ninety days. He shall also pay the costs incurred
in the investigation and prosecution of this matter by ODC and the Commission on
Lawyer Conduct and complete the Legal Ethics and Practice Program Ethics
School and Trust Account School within nine months of the date of this opinion, as
agreed. Within fifteen days of the date of this opinion, respondent shall file an
affidavit with the Clerk of Court showing that he has complied with Rule 30 of
Rule 413, SCACR.
DEFINITE SUSPENSION.
TOAL, C.J., PLEICONES, BEATTY, KITTREDGE and HEARN, JJ.,
concur.