In The Matter Of Neal Jonathan Blaher An Attorney At Law
Argued: November 15, 2018
Docket No. XIV-2018-050IE
A. Racz appeared on behalf of the Office of Attorney Ethics.
Respondent did not appear, despite proper notice.
A. Brodsky Chief Counsel
BONNIE C. FROST, CHAIR
Honorable Chief Justice and Associate Justices of the Supreme
Court of New Jersey.
matter was before us on a motion for reciprocal discipline,
pursuant to R, 1:20-14(a), filed by the Office of Attorney
Ethics (OAE). The motion is based on respondent's
disbarment in Florida,  for the New Jersey equivalents of
RPC 1.7(a) (concurrent conflict of interest),
RPC 1.15(a) (failure to safeguard funds - knowing
misappropriation of trust funds), RPC 1.15(d)
(recordkeeping improprieties), and RPC 8.4(c)
(conduct involving dishonesty, fraud, deceit or
misrepresentation). The OAE recommends respondent's
disbarment. For the reasons expressed below, we agree with
the OAE's recommendation.
was admitted to the New Jersey and Pennsylvania bars in 1986,
and the Florida bar in 1987. At the relevant time, he
practiced law in Florida. He has no history of discipline in
New Jersey, but has been administratively ineligible to
practice law in this state since 2015.
November 17, 2014, the Florida Bar (Bar) filed a Petition for
Emergency Suspension (petition) against respondent. According
to the petition, on April 24, 2014, the Bar received
notification from PNC Bank (PNC) of a $448.99 overdraft in
respondent's trust account. The overdraft resulted in an
audit of respondent's PNC trust account and his prior
trust account at Fifth Third Bank. The Bar's
investigation into respondent's practices revealed that
he had misappropriated client trust funds. From the audit
period of April 1 through July 31, 2014, his trust account
shortages ranged from $400 to $9, 730.59. The shortages
resulted from respondent's disbursing trust account funds
to himself, to which he was not yet entitled. Respondent
described those funds as "advanced attorney fees."
Each such improper disbursement impacted funds belonging to
other clients. He took the funds in anticipation of his
receipt of future payments from clients. Respondent
calculated the amounts of anticipated fee payments and
removed almost equivalent amounts from his trust account for
his personal use. In order to conceal the shortages that he
created by improperly advancing the fees, respondent
inaccurately reflected the status of the funds in his
attorney records. The Bar's auditor prepared an
affidavit, certifying that respondent was not in compliance
with the Florida bar rules during the audit period and that
he had "misappropriated" client funds from the
trust account for personal expenses.
October 15, 2014 deposition, respondent admitted his practice
of taking advances of anticipated fees before his clients
paid him. He conceded that he needed the funds and took the
advances, hoping that it would be a "short-term
situation." He maintained that his conduct was in
keeping with the "spirit" of the Florida rules.
used the fee advances to pay personal and business expenses,
such as payroll, rent, life insurance, health insurance,
cellular service, credit card bills, and the Internal Revenue
Service. He also transferred trust account funds to his
personal bank account. At the deposition, respondent
acknowledged that he intentionally engaged in this conduct.
Although he had funds in a personal retirement account, he
admitted that he chose not to use them to pay for office
expenses "because it would permanently deprive him of
money that he could not put back in savings."
petition listed seven examples of respondent's taking of
May 23, 2013, in the Madhvani 11024 matter,
respondent transferred $1, 500, as fees, from his trust
account to his operating account, even though the
client's credit card payment in the same amount did not
clear until May 30, 2013, which caused a trust account
shortage for seven days.
January 13, 2014, in the Cortex USA matter,
respondent transferred $4, 400, as fees, from his trust
account to his operating account, although the client had not
yet wired the funds. Eight days later, on January 21, 2014,
the client wired $3, 700 to respondent's trust account.
As of June 27, 2014, after additional disbursements to
respondent and to the U.S. Patent and Trademark Office, the
Cortex client ledger card had a negative $1, 845.10 balance.
On July 7, 2014, respondent cured the shortage by depositing
$1, 950 into the account. The improper fee disbursement
caused a six-month trust account shortage.
January 14, 2014, in the Andrew DeStefano matter,
respondent transferred $2, 150, as fees, from his trust
account to his operating account. He did not deposit a
portion of the client's funds until January 27, 2014, and
the account was not fully funded until February 10, 2014,
causing a twenty-seven day trust account shortage.
the Manny's Original Chophouse 14001 matter, on
January 31 and February 14, 2014, respondent disbursed
$812.50 and $2, 600, respectively, as fees, from his trust
account to his operating account, for a total of $3, 412.50.
Respondent did not deposit the client's funds until March
10, 2014, causing a thirty-eight day trust account shortage.
February 3, 2014, in the Brian Thorton matter,
respondent disbursed $1, 000 as fees for "annual
processing" from his trust account to his operating
account, even though the deposit associated with the fees did
not clear until February 11, 2014, which caused an eight-day
trust account shortage.
January 2 through April 15, 2014, in the Go Waiter
14002 matter, respondent made several fee disbursements
before collecting sufficient funds from the client. The
disbursements resulted in recurring negative balances.
April 18, 2014 in the Madhvani 11020 and
Madhvani 11024 matters, respondent disbursed $3, 000
as fees from his trust account to his operating account. The
client's $3, 000 payment for the matters did not clear
until May 7, 2014, causing a nineteen-day trust account
respondent's deposition, he admitted that his ledger
cards did not accurately reflect the activity in his trust
account. He did not correctly identify the dates or amounts
of disbursements that resulted in shortages in his trust
account when he made improper fee disbursements. He did not
record his fee advances until he received payments from his
clients. More specifically, to force the reconciled bank
statements to match the journal balance, respondent inflated
the bank balance on his reconciliations by the amount of the
fees he improperly advanced to his operating account, thereby
concealing the shortages he caused by advancing fees.
Respondent also failed to provide the Bar with copies of
canceled checks for the Fifth Third trust account, admitting
that he did not maintain the copies. Respondent's
practices thereby violated the Florida recordkeeping rules.
November 18, 2014, respondent filed an Emergency Response to
Petition for Emergency Suspension, asserting that he
cooperated fully with the Bar and produced the requested
documentation. He requested that the matter proceed through
"a more appropriate route, rather than the granting of
the emergency suspension." Respondent alleged that the
petition was replete with misstatements,
mischaracterizations, and omissions of material facts.
contended that, because of his changing practice, the
substantially lesser legal fees he received impacted his
"fee revenue flow," exacerbated by the fact that he
was being paid at a slower pace for services rendered. He
admitted "[ultimately, there were instances during this
time period when fees were disbursed from trust for steady
work being done on specifically identified and current
projects I was handling for an established client, even
though the funds had not yet been received or deposited into
the trust account." Respondent admitted further that he
even submitted documentation to the Bar showing these
"limited fee advances."
to respondent, "at no time was money disbursed
indiscriminately." Rather, "only when a specific
project for an existing client had been agreed to, and work
begun on that project, were anticipated fees calculated and
also accused the Bar of mischaracterizing his deposition
testimony. He asserted that he had a source for repayment
"in the event of even the most unexpected failure of the
anticipated fees coming in, namely funds held in a personal
retirement account that significantly exceeded the amount of
any fee advances and that could be retrieved at any time on
short notice." Respondent maintained that he had taken
funds from his retirement account during the time and
incurred the penalty for ...