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Matter of Blumenstyk

December 12, 1997

IN THE MATTER OF LARRY BLUMENSTYK, AN ATTORNEY AT LAW.


Chief Justice Poritz and Justices Handler, Pollock, O'hern, Garibaldi, Stein, and Coleman join in the Court's opinion.

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

In the Matter of Larry Blumenstyk, an Attorney at Law. (D-68-97)

Argued October 6, 1997 -- Decided December 12, 1997

PER CURIAM

Larry Blumenstyk is an attorney with a law office in Morristown. He was admitted to the bar in 1977. In September 1995, he was the subject of a random compliance audit by the Office of Attorney Ethics (OAE). The preliminary report indicated that Blumenstyk had knowingly misappropriated client funds between December 1994 and June 1995. A demand audit confirmed the first findings and a formal ethics complaint issued. The District Ethics Committee and the Disciplinary Review Board concluded that Blumenstyk had knowingly misappropriated client funds and recommended disbarment.

Blumenstyk was charged with improperly removing money from the trust accounts of clients Donald Cresitello and Edith Messler. The Cresitello matter was a real estate transaction; the Messler matter was a personal injury action. A total of $85,412.55 was involved.

Blumenstyk cites the fact that he borrowed the funds only temporarily and his restitution of the funds as mitigating factors. He explained that he had made financial commitments with the expectation that he would receive, in March 1994, approximately $100,000 from a family trust fund established by his parents. The commitments related to personal expenses, including a family vacation to Israel in December 1994 (approximately $15,000), his son's Bar Mitzvah in April 1995 (approximately $30,000), and tax payments to the IRS in April 1995 ($21,199). The anticipated distribution did not occur until June 1995. On June 9, 1995, approximately three months before he was notified that he would the subject of a random compliance audit, Blumenstyk deposited $100,046.99 of his personal funds into his attorney trust account, thereby fully restoring the amounts that he had improperly withdrawn.

The Supreme Court Ordered Blumenstyk to show cause why he should not be disbarred or otherwise disciplined.

HELD: Respondent's knowing misappropriation of client funds requires his disbarment. Neither respondent's prior unblemished record as an attorney nor the fact that he replaced the funds taken before he was the subject of a random compliance audit can serve as a mitigating factor that would preclude the imposition of disbarment.

1. Although Blumenstyk's restitution of the client funds prior to being notified that he was the subject of a random compliance audit indicates that he did intend only to "borrow" the funds temporarily, restitution does not alter the character of a knowing misappropriation of client funds. (pp. 5-6)

2. Prior cases of the Court have made it clear that an attorney's intent or motives are irrelevant when client funds are knowingly misused. Similarly, an attorney's unblemished prior record cannot serve as a mitigating factor to lessen the enormity of a knowing misappropriation. (pp. 6-7)

It is ORDERED that respondent be disbarred from the practice of law, effective immediately.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in the Court's opinion.

On an Order to show cause why respondent should not be disbarred or otherwise disciplined.

PER CURIAM

This attorney-disciplinary case is before the Court based on the decision of the Disciplinary Review Board (DRB or Board) recommending the disbarment of respondent, Larry Blumenstyk. In 1995, the Office of Attorney Ethics (OAE) notified respondent that he would be the subject of a random compliance audit of his attorney books and records. The OAE's preliminary report based on that audit concluded that respondent had knowingly misappropriated trust funds belonging to two clients. The results of a later demand audit confirmed that Conclusion. The complaint brought by the OAE and filed with the District X Ethics Committee (DEC) charged respondent with knowing misappropriation of client funds, in violation of RPC 1.15 (failure to safeguard client funds) and RPC 8.4(c) (conduct involving dishonesty, deceit or misrepresentation). The DRB and the DEC both determined that between ...


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