A New Jersey attorney who accepted a $ 140,000 loan from an elderly client has been suspended three months for entering into an improper business transaction.
Markis Miguel Abraham, a solo practitioner in Jersey City, committed an ethics breach because he failed to advise the client in writing that she should seek independent counsel before making the loan, the Disciplinary Review Board said.
In addition, default judgments were entered in two lawsuits against the client after Abraham failed to comply with discovery demands in one case and failed to appear for mandatory arbitration in the other, the DRB said.
And Abraham commingled the loan with client funds when he deposited the $ 140,000 in his attorney trust account, the DRB said.
Reached by phone, Abraham declined to comment on the case.
Following a random audit by the Office of Attorney Ethics, Abraham was placed on notice of multiple recordkeeping deficiencies, including some related to his acceptance of the $ 140,000 loan from an 80-year-old client, Bernice Perkins, the DRB said.
Abraham had assisted Perkins with the sale of several properties and a bar. He also represented Perkins in two personal injury suits stemming from Perkins’ ownership of the bar.
Abraham said he became friends with Perkins, and told her that he and his wife wanted to invest in real estate, the DRB said. In late 2016 Perkins offered him $ 140,000 to begin the couple’s investing efforts, but he initially refused to accept it, the DRB said. He suggested Perkins create a limited liability company with the money, but she refused, the DRB said. Ultimately, he accepted the money from her, and characterized it as a loan. But when he sought to formulate a repayment plan, she refused that arrangement, the DRB said.
Abraham failed to advise Perkins in writing to seek independent advice about the loan, failed to obtain written informed consent from her about the loan terms, and failed to execute a loan agreement with her, the DRB said. He deposited the money in his attorney trust account, then later transferred it to a personal account. He signed a promissory note in January 2017, providing that he would repay the loan in one year, but then failed to do so, the DRB said.
In 2018, an attorney, Sandip Pandya, from the Law Office of Sharon Rivenson Mark, was appointed by a court as Perkins’ guardian. Perkins was unable to qualify for Medicaid because the $ 140,000 loan to Abraham represented a large depletion of her assets a short time before a potential application, the DRB said.
In May 2019, Perkins died at age 82, and her estate was left with a large bill for her medical care, the DRB said. Interviewed by the OAE that June, Abraham said he intended to repay the loan but was unable to do so, the DRB said. Three months later, he repaid $ 5,000 of the loan, the DRB said.
In one of the lawsuits, a default was entered against Perkins in September 2019 after Abraham failed to reply to answers to interrogatories, the DRB said. In the other lawsuit, default was entered in November 2018 after Abraham failed to appear at a mandatory arbitration, the DRB said.
The DRB found Abraham failed to perform the legal services for which he was retained in the two lawsuits, entered into an improper business transaction with a client, and commingled the personal loan with entrusted funds in his attorney trust account.
The OAE argued that Abraham caused extensive harm to Perkins by adversely impacting her entitlement to Medicaid, and also argued that she was a vulnerable person to whom he owed a greater duty of care, the DRB said.
Abraham, who was pro se in the disciplinary case, told the DRB that he had spent the entire $ 140,000 but had repaid $ 7,000 of the loan to her estate, and had signed a consent order with the estate to repay $ 190,000, including interest.
Abraham said he did not file for bankruptcy, despite his personal financial difficulties, because he was committed to repaying the debt. He also said he put the money in his trust account because he expected Perkins to proceed with forming the LLC, in which case the money would remain hers.
Five DRB members voted for a three-month suspension, two favored censors, and one voted to impose a one-year suspension.
“Standing alone, each of respondent’s violations would have merited less than a term of suspension. However, considering respondent’s diverse misconduct in the aggregate, and taking into account the mitigating and aggravating factors, a short-term suspension is warranted, ”the DRB said. “On balance, considering the legal precedent as well as the mitigating and aggravating factors presented, a three-month suspension is the appropriate level of discipline for the totality of respondent’s misconduct, and is the quantum of discipline necessary to protect the public and preserve confidence in the bar. ”