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In re Knox

Decided: July 13, 1984.

IN THE MATTER OF JOHN R. KNOX, AN ATTORNEY AT LAW


On an Order to Show Cause why respondent should not be disbarred or otherwise disciplined.

For disbarment, suspension and reprimand -- Chief Justice Wilentz and Justices Clifford, Schreiber, Handler, O'Hern and Garibaldi. Opposed -- None.

Per Curiam

Our painstaking independent review of the record leads us to the same conclusion as was reached by the Disciplinary Review Board (DRB), namely, that respondent should be suspended from the practice of law for a period of three years, with certain conditions to be imposed should readmission be granted. The DRB's report, which, with a single exception referred to below, we now adopt as our own, is as follows:

"This matter is before the Board on an appeal by the Division of Ethics and Professional Services following dismissal by the District XI Ethics Committee of an ethics complaint that charged the respondent with misappropriation of client trust funds and other recordkeeping violations. A review of the records before the Board disclosed the following:

"A. Trust Account Problems

"In March of 1980, an audit of the respondent's trust account was conducted by the Division of Ethics and Professional Services. That audit revealed that from November of 1974 through February of 1980, the respondent was out of trust by varying amounts at least 15 times during the five-year period reviewed, including:

DATE OF

NEGATIVE AMOUNT OF

BALANCE NEGATIVE BALANCE CLIENT

November, 1974 ($1.38) William Partridge

July, 1976 ($374.46) Sussex Boy Scouts

September, 1976 ($18.00) Warren J. Padfield

November, 1977 ($6,294.50) Aeroflex Corporation

December, 1977 ($27,859.74) Forrest Lakes, Inc.

June, 1978 ($524.60) Central Nat'l Life Ins.

June, 1978 ($122.65) Chester Guzik

June, 1978 ($30.00) T. Young

September, 1978 ($792.97) Bernard, Durst & Dilts

April, 1979 ($0.20) Scheinler Est.

July, 1979 ($2,812.54) Kenneth H. Layton

September, 1979 ($17,937.38) Kerstner & Knox

November, 1979 ($0.04) Herman Eisenberg

December, 1979 ($5,179.74) Rose Property

December, 1979 ($4,018.44) Catherine Kenney

($66,759.04)

"The Division of Ethics and Professional Services accountant contended that each negative balance indicated an invasion of funds belonging to one client on behalf of another. Respondent attempted to explain the negative balances by stating that in certain cases, the negative balance was offset by combining accounts or by crediting fees earned or anticipated in other matters. He further related the overdrafts to his alcoholism, which, he contended, resulted in a failure to bill clients properly and to maintain the required attorney records. Additionally, at the hearing before the ethics committee respondent claimed that his wife, who was his bookkeeper, improperly debited and credited various account ledgers. By his own admission, respondent withdrew $3,800 attributed to the Catherine Kinney ledger prior to receipt of any trust funds for ...


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