Respondent received the letter shortly after it was sent.

Transcription

1 BEFORE THE HEARING BOARD OF THE ILLINOIS ATTORNEY REGISTRATION AND DISCIPLINARY COMMISSION In the Matter of: CHINYERE ALEX OGOKE. Commission No. 2014PR00180 Attorney- Respondent. No RESPONDENT'S TO ARDC'S SECONDAMENDED COMPLAINT COMES CHINYERE ALEX OGOKE, by his attorneys, COLLINS BARGIONE & VUCKOVICH, and denying any prefatory allegations ofthe Second Amended Complaint, and for his answer to the Second Amended Complaint, states as follows: COUNT I (Conversion of $1, in third-party funds) 1. In or about November Respondent formed Cardinal Legal Group. P.C. ("Cardinal"), a professional corporation. Since its formation, Respondent has been the corporation's sole director and its president. 2. Sometime prior to April 2012, Respondent, acting through his firm, Cardinal, and Martha A. Asres ("Asres") agreed that Respondent would represent her in a personal injury matter arising out of an automobile accident. 3. On or about April 16, 2012, Brandon Edwards, on behalf of Allstate Insurance Company ("Allstate'), sent a letter addressed to "Cardinal Legal Group," stating that Allstate was seeking reimbursement for $2,000 paid under Asres' medical payments coverage. Respondent received the letter shortly after it was sent. PILED i FEB ATTY REG & DISC COMM CHICAGO

2 4. Sometime prior to November Asres' matter was settled. On or about November State Farm Mutual Automobile Insurance ("State Farm") sent Respondent a check number J in the amount of$7,000, which had been payable to "Marta Asres, a single individual & Allstate Insurance & Nova Spinal Care & Cardinal Legal Group, P.C." Respondent received the check shortly after it was sent. 5. On or about November 14, 2012, Respondent (or someone acting at his direction) signed the back of the $7,000 State Farm check by adding the purported endorsements "Marta Asres" and "Brandon Edwards - Allstate." After signing the check, Respondent (or someone acting at his direction) deposited the $7,000 State Farm check in a Chase account ending in the four digits which was entitled "Cardinal Legal Group, P.C, IOLTA account." Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or. presently or potentially, Respondent. Admitted that the check was endorsed and deposited in Respondent's IOLTA account. Denied that Respondent endorsed the check without authority. 6. As of May 6, 2013, Respondent had not yet paid Allstate any portion of the settlement proceeds. On or about May 6, 2013, Alan Zenoff ("Zenoff), an attorney retained by Allstate to recover the settlement proceeds in the Asres matter, sent Respondent a letter advising Respondent that Zenoff had been retained by Allstate and asking Respondent to contact Zenoff to discuss the matter. Respondent received the letter shortly after it was sent but did not contact Zenoff. Admitted, except the allegations that Respondent did not contact Zenoff. Respondent attempted to contact Zenoff but was not successful. 7. On or about September , Allstate agreed to accept a reduction oftheir medical payment claim in the Asres settlement from $2,000 to $1, That same day, Matthew Beechie, a Staff Claims Representative for Allstate, sent Respondent a one-page fax confirming the agreement. The fax also granted Respondent the authority to endorse the draft on behalf of Allstate. Respondent received the fax shortly after it was sent. 8. As of November 11, 2013, Respondent had not paid any portion of Allstate's medical claim. Prior to November Zenoff had mailed Respondent two letters and had called him once regarding the Asres matter. On or about November 11, Zenoft sent Respondent an advising Respondent that Zenoff had attempted to contact

3 Respondent by phone and by letter without success. Zenoff attached a copy Allstate's September 19, 2013 fax to the and again asked Respondent to contact him regarding the matter. Respondent received the shortly after it was sent but did not respond to Zenoff. Admitted that Allstate was not paid as of November 13, Zenoffs letter is also admitted. Denied that Respondent did not respond to Zenoff in that the payment was disbursed to Zenoffof Allstate. Any remaining allegations are denied. 9. On or about December 9, Zenoff reported Respondent's failure to communicate and failure to pay Allstate's medical payment claim to the ARDC. Admitted that a request for investigation was made by Zenoff in order to obtain payment. 10. As of February 21,2014, Respondent still had not paid Allstate, and should have been holding $1, in his firm's trust account on behalfof Allstate, but the balance in his firm's trust account, fell to $ as Respondent drew checks on the account or made other withdrawals in payment of his personal or business obligations. : Defendant does not have sufficient knowledge at this time as to the precise balance in February 21, 2014, but acknowledges the accuracy of bank records regarding the account. 11. Respondent's use of the funds described above constitutes conversion of funds received in connection with the representation of a client. As a result, as of February 21, 2014, Respondent had converted $1, of the funds he should have been holding on Allstate's behalf. Allstate and the client were paid. 12. B\ reason of the conduct described above. Respondent has engaged in the following misconduct: a. failure to maintain and appropriately safeguard funds belonging to a clientor a third person, and to hold the funds separate from the lawyer's own property, by conduct including conversion of funds to his own personal or business use. received by Respondent in settlement of Asres' claim and in which Allstate had an interest by causing the balance in his client trust account

4 to fall below the amounts due and owing to Allstate, in violation of Rule 1.15(a) ofthe Illinois Rules of Professional Conduct (2010); and b. conduct involving dishonesty, fraud, deceit or misrepresentation, by his conversion of least $1, of Allstate's funds for his own personal or business purposes, thereby converting that property to his own use. in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010). WHEREFORE, Respondent respectfully requests that Count I be dismissed. COUNT II (Dishonesty Toward the Tribunal) 13. On or about January 20, 2010, CitiMortgage, Inc. ("CitiMortgage"), filed a foreclosure action against several defendants, including the estate ofbacacou Marega ("Marega"). The Clerk of Cook County Circuit Court docketed the matter as CitiMortgage, Inc. v. The Estate ofbacacou Marega and unknown heirs ofbacacou Marega, et a/., case number 10 CH On or about April 8, 2010, Respondent filed an appearance on behalf of the defendants in case number 10 CH Between January and April the plaintiff. CitiMortgage. amended its complaint twice. Defendants, through Respondent, answered each version of the complaint and filed affirmative defenses. 16. On or about April4, 2013, CitiMortgage filed a motion for summary judgment. 17. On January 16, 2014, CitiMortgage's motion for summary judgment was granted, and the court entered a judgment of foreclosure. The Motion was presented but a final order was not entered on that date.

5 18. On or about May 7, Respondent prepared a document entitled "AFFIDAVIT IN SUPPORT OF OPPOSITION TO PPEAINTIFF'S [sicj MOTION FOR SJUMMARY [sic] JUDGMENT" The purported affidavit stated as follows: "BACACOU MAREGA sworn on oath states: I, BACACOU MAREGA, am of legal age and not suffering under any mental disabilities. I have personal knowledge ofthe facts contained in this Affidavit. If called upon to testify, I could competently state as follows: 1. That I was never afforded any affordable modification mortgage plan as required by statute under this mortgage 2. Affiant sayeth not." In his notary acknowledgement, Respondent stated that on May 7, 2014, the affidavit was "signed and sworn to before" Respondent by an illegible handwritten name. Respondent notarized the affidavit by affixing his notary stamp underneath the notary acknowledgment. Admitted an affidavit was filed by Respondent. It erroneously contained the name of Ms. Marega in the typed portion of the affidavit. Ms. Marega had died and the affidavit was signed by Mohammed Tandia, the personal representative and husband of Ms. Marega. Admitted the signature of Mr. Tandia was notarized by Respondent. Any remaining allegations are denied. 19. The purported affidavit Respondent prepared, alleging that Marega was of legal age and had "personal knowledge" of the facts contained in the Affidavit, was false because Marega had died on October 11, 2007 in Theis, Senegal. The substance of the Affidavit and notarized signature were accurate, fhe typewritten name contained in the Affidavit was incorrect, referring to Ms. Marega. The affidavit was signed by Mr. Mohammed the husband and personal representative of Ms. Marega. deceased, and it was his signature which was notarized by Respondent. 20. Respondent's statement in his notary acknowledgement on Marega's purported affidavit, that Marega signed the affidavit, was also false because Marega was deceased at the time the affidavit was prepared and signed. The signature of Mohammed Tandia was correctly notarized. 21. At the time Respondent prepared the affidavit he knew that the facts alleged in the affidavit and his notary acknowledgement were false because on August 12, 2009, Respondent had filed a Petition for Letters of Administration on behalf of the estate of "Bacaou" Marega. Although Marega's first name was misspelled in the affidavit,

6 Respondent knew that both the affidavit and the petition referred to the same individual and that Marega had died in Senegal in Denied that Respondent knew the Affidavit was false when made. The Affidavit contained a typographical error as to the typewritten name of Ms. Marega which Respondent should have detected before he notarized the signature of Mr. Tandia. Any remaining allegations are denied. 22. On or about May 8, 2014, Respondent filed a pleading entitled "DEFENDANT'S OPPOSITION MOTION TO MOTION TO SUBSTITUTE A PARTY AND OPPOSITION TO PLAIMTFF'S [sic] MOTION TO VACATE JUDGEMNT [sic] ENTERED ON JANUARY 16, 2014." In this pleading. Respondent argued that summary judgment should not be granted because an issue of material feet existed regarding whether the defendant had been offered loss mitigation options, such as a loan modification, prior to foreclosure. In support of his argument, Respondent attached the false affidavit described in paragraph 18, above. Admitted as to the filing of the document and that the affidavit was filed. Denied that the affidavit was false. Any remaining allegations are denied. 23. At all times alleged in this complaint, the II linois Notary Act, 5 ILCS 312/ required that the notary public witness the signature being notarized or verify that the signature on the document is that of the person whose signature is being notarized. 5 ILCS provided that a notary public who willfully violates the notary act was guilty of a Class A misdemeanor, and that a notary who recklessly or negligently violated the act was guilty of a Class B misdemeanor. The existence ofthe statutes regarding notaries as referenced by the Administrator are admitted. Denied that the Administrator has accurately set forth the statutory provisions and denied that Respondent violated the statutes. 24. By notarizing Marega's purported affidavit despite knowing she was dead, Respondent engaged in criminal conduct in violation of 5 ILCS and 5 ILCS

7 25. By reason of the conduct described above. Respondent has engaged in the following misconduct: a. knowingly offering evidence the attorney knows to be false by conduct involving offering a false affidavit in support of a pleading, in violation of Rule 3.3(a)(3) ofthe Illinois Rules of Professional Conduct (2010); b. conduct involving dishonesty, fraud, deceit or misrepresentation, by notarizing and filing an affidavit containing the signature of an individual Respondent knew was deceased, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010): and c. conduct, including knowingly submitting a false affidavit in a pleading. that is prejudicial to the administration ofjustice, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct (2010). WHEREFORE, Respondent respectfully requests that Count II be dismissed. COUNT III (Conversion of$119, in clientfunds) 26. On February the City of Chicago ("the City") caused to be filed in the Circuit Court of Cook County, Municipal Department, a Lis Pendens and a housing complaint alleging violations of the Municipal Code of Chicago against the property located on 6630 South Marquette Road in Chicago ("The Marquette Property"). The matter was captioned City of Chicago v. Rochelle Coleman, et. al, re: 6630 S. Marquette Rd., Chicago, Illinois, 60637, case number 2013 Ml Respondent was unaware of the proceeding at the time it was filed. 27. On May 28, the Court issued a demolition order for the Marquette Property in case number 2013 Ml The order stated after hearing evidence of severe damage to the property, including inoperable electrical, plumbing, and heating systems, step and stress fractures to the building's masonry, damaged roof membranes, and missing windows and flooring, the Court found that the building was beyond reasonable repair and posed a threat to the public and ordered its demolition. Respondent was unaware of the order at the time it was entered. 28. On December , Respondent and Daniel Hiron, an agent of Dominion Fiduciary Services. Ltd. ("Dominion"), an independent trust company located in St. Helier,

8 Jersey (one of the Channel Islands), agreed that Respondent would represent Dominion in establishing a limited liability company and purchasing certain properties in Chicago. The request to form the entity was made by a person named Melissa McConnell. 29. On or about December 31,2013, Respondent and Dominion agreed that Respondent would represent Dominion in its purchase of the Marquette Property and would act as the escrow agent in the transaction. Respondent advised Dominion that its purchase of the Marquette Property would cost approximately $136,000. There was a Real Estate Contract for the purchase of the subject property which was between Bruno Pajusco and Gregory Burnett. Respondent did not negotiate or draft the contract or set the purchase price for the real estate. 30. Respondent and Dominion also agreed that Respondent would create an entity known as 6630 South Marquette Road. LLC ("South Marquette LLC"), on behalf of Dominion. The LLC would be established as a holding company for Dominion's ownership of the properties it sought to purchase in Chicago. 31. On January 3, 2014, Dominion wire-transferred $140,000 into Respondent's Chase account ending in the four digits 3219, which was entitled "Cardinal Legal Group, P.C, IOLTA account." Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or, presently or potentially, Respondent. The $140,000 in funds that Dominion wire-transferred into Respondent's IOLTA account represented the purchase price ofthe Marquette property that Respondent agreed to hold in escrow. 32. On January Respondent had not >et released the escrow funds to the seller ofthe Marquette property, and should have been holding $140,000 in his firm's trust account on behalf of Dominion. Escrow Agreement. Respondent disbursed funds pursuant to the Real Estate Contract and

9 33. On January 13, 2014, the balance in his firm's trust account fell to $20,157.52, as Respondent drew checks on the account or made other withdrawals in payment of his personal or business obligations. Admitted that the account had activity. Respondent has insufficient knowledge of the precise balance on the date alleged but acknowledges the bank records would contain such information. 34. At no time did Dominion, or anyone acting on its behalf, authorize Respondent to use any portion of the escrow funds for Respondent's own business or personal use. Denied that Respondent improperly used Dominion funds. 35. Respondent's use of the funds described above constitutes conversion of client funds he received as escrow agent in connection with the representation ofhis client, Dominion, in a real estate purchase. As a result, as of January 13, 2014, Respondent had converted $119,842.48, of the funds he should have been holding on Dominion's behalf. 36. On or about January , Respondent prepared a quitclaim deed purporting to transfer ownership of the Marquette property from the grantor, City Property Services. LLC. to the grantee. South Marquette LLC, "for and in consideration often and 00/100 dollars." Although the quitclaim deed listed South Marquette LLC as the buyer, it directed that tax bills be sent to the Burnett Development Group. Inc. Defendant has insufficient knowledge of these allegations and therefore neither admits nor denies these allegations. 37. On or about February 10, 2014, Respondent filed the required paperwork with the Illinois Secretary of State and formed the South Marquette LLC. There was a delay in formation because of difficulty in obtaining a name for the entity as the original name sought was not available. 38. On March Respondent, or someone acting under his direction, recorded the quitclaim deed with the Cook County Recorder of Deed's office. On or about March Respondent or someone acting on his behalf, sent Dominion a copy of the quitclaim deed.

10 39. Respondent did not, at any time, provide Dominion with a purchase contract, title insurance commitments or policies, surveys, or closing settlement statements. Dominion provided the contract to Respondent and there was no survey. Admitted there was no title insurance. 40. By reason of the conduct described above, Respondent has engaged in the following misconduct: a. failure to maintain and appropriately safeguard funds belonging to a client or a third person, and to hold the funds separate from the lawyer's own property, by conduct including conversion of funds to his own personal or business use, received by Respondent in connection with Dominion's purchase of properties, by causing the balance in his client trust account to fall below the amounts due and owing to Dominion, in violation of Rule 1.15(a) of the Illinois Rules of Professional Conduct (2010): and b. conduct involving dishonesty, fraud, deceit or misrepresentation, by his conversion of least $119, of Dominion's funds for his own personal or business purposes, thereby converting that property to his own use, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010). WFIEREFORE, Respondent respectfully requests that Count III be dismissed. COUNT IV (Conversion of$168, in client funds) 41. On January 13, 2014, Gregory Burnett, owner of Burnett Developments, Inc. ("Burnett"), signed an Illinois Statutory Short Form Power of Attorney appointing Annie Taylor, a secretary in Respondent's office, as his agent. 42. On or about May 23, 2014, Respondent and Dominion agreed that Respondent would represent Dominion in purchasing two properties in Chicago. The parties agreed that Dominion would pay Respondent a flat fee of $2,500 for Respondent's representation of Dominion in the transactions. 43. On May 28, 2014, Dominion agreed to purchase two Chicago properties, located on 7256 South Green Street ("The Green property") and 6429 South Hermitage ("the 10

11 Hermitage property"), from Burnett, for a total price of$190,000. The seller retained the option to sell the property to another buyer if it received an offer for a higher price any time prior to the closing date of May 28, Denied that Dominion was the contract purchaser. The remaining allegations are admitted. 44. On or about May 28,2014, Dominion also entered into an escrow agreement with Respondent concerning the property purchases described in paragraph 38, above. According to the terms ofthe agreement, Respondent, through his firm, Cardinal Legal Group, P.C, agreed to act as the escrow agent and to hold the $190,000 deposited by Dominion until the May 28, 2015 closing, or until the seller entered into an agreement with another buyer. According to the terms of the agreement, title would be transferred and the funds released from escrow at the time of the closing. 45. On May 30, 2014, Dominion wire-transferred $190,000 in escrow funds into Respondent's Chase account ending in the four digits which was entitled "Cardinal Legal Group. P.C. IOLTA account." Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or. presently or potentially. Respondent. 46. On June 30, 2014, the closing on the properties had not yet taken place, and Respondent should have been holding $190,000 in his firm's trust account on behalf of Dominion. 47. On June 30, 2014, the balance in Respondent's firm's trust account, fell to $21,983.87, as Respondent drew checks on the account or made other withdrawals in payment of his personal or business obligations. Admitted as to the balance of the amount. The remaining allegations are denied in that the funds had been disbursed to complete the transaction. 48. At no time did Dominion, or anyone acting on its behalf, authorize Respondent to use any portion of the escrow funds for Respondent's own business or personal use. 49. Respondent's use of the funds described above constitutes conversion of client funds he received as escrow agent in connection with the representation of his client. 11

12 Dominion, in real estate purchases. As a result, as ofjune 30, 2014, Respondent had converted $168,016.13, ofthe funds he should have been holding on Dominion's behalf. 50. On or about October Respondent prepared a warranty deed purporting to transfer ownership ofthe Hermitage property from the grantor. Burnett Development Group, Inc., to the grantee, South Marquette LLC, "for and in consideration often and 00/100 dollars." On or about October 2, 2014, Respondent, or someone acting under his direction, recorded the deed with the Cook County Recorder ofdeed's office. 51. Respondent did not notify Dominion prior to preparing or recording the deed. Shortly after recording the deed. Respondent or someone acting on his behalf, sent Dominion a copy of the deed. 52. Respondent did not, at any time, provide Dominion with title insurance commitments or policies, surveys, or closing settlement statements for the Hermitage property. Respondent did not. at any time, provide Dominion with adeed or any other documents related to the Green property. 53. By reason of the conduct described above, Respondent has engaged in the following misconduct: a. failure to maintain and appropriately safeguard funds belonging to a client or a third person, and to hold the funds separate from the lawyer's own property, by conduct including conversion of funds to his own personal or business use, received by Respondent in connection with Dominion's purchase of properties, by causing the balance in his client trust account to fall below the amounts due and owing to Dominion, in violation ofrule 1.15(a) ofthe Illinois Rules of Professional Conduct (2010); and b. conduct involving dishonesty, fraud, deceit or misrepresentation, by his conversion of least $168, of Dominion's funds for his own personal or business purposes, thereby converting that property to his own use, in violation ofrule 8.4(c) ofthe Illinois Rules of Professional Conduct (2010). WHEREFORE. Respondent respectfully requests that Count IV be dismissed. 12

13 COUNT V (Conversion of $47, in client funds) 54. On or about May 5, 2014, Lisa Macauley ("Macauley"). a resident of the United Kingdom ("U.K."), entered into an agreement with a U.K. limited liability company named Real Estate Owned Ltd. ("REO") to purchase a residential property in Chicago. According to REO's agents, REO agreed to help Macauley buy a property in Chicago that would be "flipped" (i.e., sold for a higher price) within three to six months, and REO would receive a commission from Macauley's profit at the time she sold the property. REO's agents advised Macauley that Respondent would represent Macauley in purchasing a Chicago property located at 8606 South Colfax Avenue ("the Colfax property"), and would act as the escrow agent. Respondent has insufficient knowledge ofthe allegations ofparagraph 54 and therefore neither admits nor denies those allegations. 55. On May 5, Macauley executed a document entitled "Chicago Residential Property Purchase Agreement" ("the purchase agreement") that set forth the terms ofthe purchase. According to the purchase agreement, Macauley agreed to buy the Colfax property for $66,000, and Respondent, through his firm, Cardinal Legal Group, P.C, agreed to act as the escrow agent. Respondent agreed to receive Macauley's funds into his Chase account ending in the four digits 3219, entitled "Cardinal Legal Group, P.C, IOLTA account," and to release the funds, minus a $4,000 administration fee, to the seller once the deeds were transferred into Macauley's name. Admitted that Respondent's client fund account was involved in the purchase ofthe Colfax property and with respect to a refund ofpurchase funds by mutual agreement of the parties. Any remaining allegations are denied. 56. On May 21, 2014, Macauley wire-transferred $69,980 in escrow funds into Respondent's Chase 10LTA account ending in the four digits Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or, presently or potentially, Respondent. 57. On June 30, 2014, Respondent had not yet transferred the deed into Macauley's name, Respondent had not yet disbursed any funds on Macauley's behalf, and should have been holding at least $66,000 in his firm's trust account on behalf ofmacauley. 13

14 Respondent transferred the funds as directed. 58. On June 30, 2014, the balance in Respondent's firm's Chase IOLTA trust account fell to $21,983.67, as Respondent drew checks on the account or made other withdrawals in payment of his personal or business obligations. Respondent has insufficient knowledge as to the precise balance at this time and neither admits nor denies these allegations. Respondent admits the bank records for the account would contain information stating the balance on the date alleged. 59. At no time did Macauley, or anyone acting on her behalf, authorize Respondent to use any portion ofthe escrow funds for Respondent's own business or personal purposes. 60. Respondent's use ofthe funds described above constitutes conversion ofclient funds he received as escrow agent in connection with the representation of his client. Macauley, in a real estate purchase. As a result, as ofjune 30, 2014, Respondent had converted $47, of the funds he had agreed to hold on Macauley's behalf. 61. On or about July 1, Respondent prepared a warranty deed purporting to show the transfer ofa property located at 5023 S. Michigan, Unit #1, in Chicago, Illinois ("the Michigan property"), from an individual named Princess Lomax ("Lomax") to Macauley. 62. The purported deed to the Michigan property that Respondent prepared also contained his notary acknowledgement, which stated that Lomax "appeared before me this day in person, and acknowledged that they signed, sealed, and delivered" the deed. Respondent notarized the deed and apurported "grantor-grantee statement" attached to the deed by affixing his notary stamp on each document. Macauley. 63. On July Respondent sent, via Federal Express, the unrecorded deed to 64. The deed that Respondent prepared and sent to Macauley was false because Lomax never owned the Michigan property, and could not transfer the property to Macauley. 14

15 The notary acknowledgement was false because Lomax did not sign the deed. Respondent knew the deed and notary acknowledgment were false at the time he prepared the deed and sent the deed to Macauley. Respondent sent Macauley the deed to deceive her into believing the funds she had transferred into his IOLTA account were used to purchase the Colfax property. Denied that the deed was intentionally false and that Respondent knew it was false. Admitted the deed was sent by Respondent. 65. Macauley received the false deed on July 3, 2014, but did not notice that the address of the property described in the deed was different from the Colfax property's address. Between July and January Macauley believed that she owned the Colfax property and thai Respondent and REO had found a buyer for the property. During that time. Respondent and Macauley exchanged numerous messages concerning the sale of the Colfax property. Admitted s were exchanged. Denied the Respondent knowingly prepared or sent a "false7' deed. Respondent has insufficient knowledge of the remaining allegations which are neither admitted nor denied. 66. On or about January 16, Macauley discovered that there was no deed on file with the Cook county recorder of deeds' office showing that she owned the Colfax property, and that on October 31, 2014, the Colfax property had been transferred, by quit claim deed, from the grantor, EAJ Properties. LLC. to the grantee, an individual named John Kenney. Respondent has insufficient knowledge of the allegations of paragraph 66 and therefore neither admits nor denies those allegations. 67. On January 16,2015, Macauley contacted Respondent by and stated that she believed he had fraudulently sold her interest in the Colfax property, and requested a full refund of her investment, plus fees, and any profit realized from the sale. On January 17, 2015, Respondent sent Macauley and stating: "Your property has not been sold. The deed of October 31, 2014 is surely a mix up and I will have that resolved." 68. On January , Respondent advised Macauley that a mistake had occurred with regard to her investment in the Colfax property, but that Respondent had 15

16 purchased a "replacement property" for her, located at S Perry Avenue ("the Perrv property") in Chicago. 69. Between January and February Macauley believed Respondent was working to ensure her purchase of a replacement property. On or about February 23, 2015, Macauley learned that Respondent or his agent did not appear at a previously scheduled "showing" of the purported replacement property and Macauley again demanded a refund of her investment. Admitted a demand for refund was communicated to Respondent. Respondent believes a refund was made. Respondent has insufficient knowledge of the remaining allegations which are neither admitted nor denied. 70. On February 25, Respondent agreed to refund $70,000 to Macauley. Between February , and June Respondent paid Macauley $45,000. Respondent communicated about a refund from Burnett. 71. On June , Macauley filed a request for investigation of Respondent with the ARDC, which was received by the Commission on August 6, By reason of the conduct described above, Respondent has engaged in the following misconduct: a. failure to maintain and appropriately safeguard funds belonging to a client or a third person, and to hold the funds separate from the lawyer's own property, by conduct including conversion of funds to his own personal or business use, received by Respondent in connection with Macauley's purchase of a property, by causing the balance in his client trust account to fall below the amounts due and owing to Dominion, in violation of Rule 1.15(a) of the Illinois Rules of Professional Conduct (2010); and b. conduct involving dishonesty, fraud, deceit or misrepresentation, by his conversion of least $47, of Macauley's funds for his own personal or business purposes, thereby converting that property to his own use, and creating and notarizing a false deed to deceive Macauley, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (20 I 0). 16

17 WHEREFORE, Respondent respectfully requests that Count V be dismissed. COUNT VI (Conversion of$47, in clientfunds) 73. On or about May 6, Richard Gawthorne ("Gawthorne"), a resident ofthe United Kingdom ("U.K"), entered into an agreement with agibraltar-based company named Temple Rock Fund PCC Ltd. ("Temple Rock") to purchase aresidential property in Chicago. According to Temple Rock's agent. Temple Rock agreed to help Gawthorne buy a property in Chicago that would be "Hipped" (i.e.. sold for ahigher price) within four months and it would receive a commission from Gawthorne's profit at the time he sold the property. Temple Rock's agents advised Gawthorne that Respondent would represent Gawthorne in purchasing achicago property located at 2231 East 67th Street, Unit #12D ("the 67Ih Street property"). The allegations ofparagraph 73 are admitted, except the allegations that a profit would be paid in four (4) months or that Gawthorne understood that his investment in the property involved arisk, with no certainty that the property could be "flipped" within four (4) months, and the risk was substantial, given the fact that Gawthorne did not ever view the property prior to purchase. 74. On or about May , Respondent and Gawthorne agreed that Respondent would represent Gawthorne in purchasing the 67lh Street property. On that date, Respondent sent Gawthorne a letter, by , setting forth the terms ofthe representation. Respondent also sent Gawthorne a real estate sales contract setting forth the terms of Gawthorne's purchase ofthe 67th Street property. Admitted except that Respondent did not negotiate the terms ofpurchase. 75. On or about May 12, 2014, Gawthorne executed the real estate sales contract Respondent had sent him. 76. According to the terms of the real estate sales contract. Gawthorne agreed to buy the 67lh Street property from the Bumetie Development Group, Inc. ("Burnette Development") for $62,000. Gawthorne further agreed to pay Burnette Development a $15,500 refurbishment fee. Gawthorne also agreed to pay Respondent a legal fee of $1,000. and a title insurance fee of $1,200, for a total cost of $79,

18 77. On May Gawthorne wire-transferred $79,665 into Respondent's Chase IOLTA account ending in the four digits Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or, presently or potentially, Respondent. 78. On May 20, 2014, Respondent had not yet recorded the deed for the 67' Street property, had not yet disbursed any funds on Gawthorne's behalf, and should have been holding at least $63,200 in his firm's trust account on behalf ofgawthorne. allegations are denied. Admitted the deed was not recorded until May The remaining 79. On May , the balance in Respondent's firm's trust account, fell to $20,082.67, as Respondent drew checks on the account or made other withdrawals in payment of his personal or business obligations. Admitted as to the account balance. Denied Respondent acted improperly. 80. At no time did Gawthorne, or anyone acting on his behalf, authorize Respondent to use any portion of Gawthorne's funds for Respondent's own business or personal use. Denied that the funds were used in a manner which was not authorized. 81. Respondent's use of the funds described above constitutes conversion of client funds he in connection with the representation of his client, Gawthorne, in a real estate purchase. As aresult, as of May 20, Respondent had converted at least $43, of the funds he should have been holding on Gawthorne's behalf. 82. On or about May 15, 2014, Respondent prepared and later recorded a quitclaim deed conveying the 67th street property from an individual named John Stavropoulos ("Stavropoulos") to Gawthorne. 83. On June 2, 2014 Respondent sent Gawthorne, by , a copy ofa quitclaim deed he had prepared and recorded on Gawthorne's behalf. He also sent Gawthorne acopy ol the condominium association's certificate of liability insurance. Respondent sent Gawthorne the certificate of liability insurance to deceive Gawthorne into believing that title insurance had been purchased, as provided for in the real estate sales contract. 18

19 84. Respondent's representations to Gawthorne about the cost of title insurance were-false because the property was transferred by quitclaim deed and title insurance could not be obtained. Respondent prepared the quitclaim deed and knew that Gawthorne would not receive title insurance but Respondent never advised Gawthorne of this fact, or refunded the $1,200 Gawthorne paid for title insurance. 85. On or about December 17, 2014, Gawthorne discovered that the unit he purchased had an outstanding condominium assessment balance of $16, Respondent has insufficient knowledge of these allegations and therefore, neither admits nor denies these allegations. 86. On or about February 18, 2015, Gawthorne discovered that although he had paid a$15,500 refurbishment fee. the 67lh Street property was uninhabitable and had not been refurbished. Respondent has insufficient knowledge of the allegations of paragraph 86 and therefore neither admits nor denies those allegations. 87. By reason of the conduct described above. Respondent has engaged in the following misconduct: a. failure to maintain and appropriately safeguard funds belonging to a client or athird person, and to hold the funds separate from the lawyer's own property, by conduct including conversion of funds to his own personal or business use, received by Respondent in connection with Gawthorne's purchase of aproperty, by causing the balance in his client trust account to fall below the amounts due and owing to Dominion, in violation of Rule 1.15(a) ol the Illinois Rules of Professional Conduct (2010); and b. conduct involving dishonesty, fraud, deceit or misrepresentation, by his conversion ofleast $43, of Gawthorne's funds for his own personal or business purposes, thereby converting that property to his own use, and deceiving Gawthorne about certain aspects of his purchase the 67" Street property, in violation of Rule 8.4( c) of the Illinois Rules of Professional Conduct (2010). WHEREFORE, Respondent respectfully requests that Count VI be dismissed. 19

20 COUNT VII (Misrepresentation with Regard to a Client Matter) 88. On or about May 27, 2014, Respondent and David Postles ("Postles"), a U.K. resident, agreed that Respondent would represent Postles in purchasing investment real estate properties in Chicago. 89. On May Postles entered into real estate sales contract with an individual named Princess Lomax ("Lomax") to purchase a property from Lomax located at 5924 S. King Drive. Unit 1N("the King Drive property") in Chicago. 90. According to the terms ofthe real estate sales contract, Postles agreed to buy the King Drive property for $68,295. Postles further agreed to pay a$14,500 refurbishment fee, as well as atitle insurance fee of$1,200 and a legal fee of $1,000. for a total cost of $84, On May 29, 2014, Postles wire-transferred $84,995 into Respondent's Chase IOLTA account ending in the four digits 3219 for the purchase ofthe King Drive property. Respondent used the account for depositing funds belonging to Respondent's clients, third parties, or. presently or potentially. Respondent. 92. On or about June 24, 2015, Respondent purchased, at a tax sale, a property on Postles' behalf. The property was located at 5924 S. King Drive, but was Unit 2N, not Unit IN, as listed on Postles' real estate contract. 93. Respondent did not advise Postles that Respondent was purchasing aproperty on Postles' behalf through atax sale and that the property was adifferent unit than what Postles had agreed to purchase from Lomax. 94. On or about June 24, Respondent prepared a warranty deed purporting to show the transfer ofthe King Drive property from Lomax to Postles. 20

21 95. The purported deed that Respondent prepared also contained his notary acknowledgement, which stated that Lomax "appeared before me this day in person, and acknowledged that they signed, sealed, and delivered" the deed. Respondent notarized the deed and apurported "grantor-grantee statement" attached to the deed by affixing his notarystamp on each document. Postles. 96. On or about June 24, 2014, Respondent sent the unrecorded warranty deed to 97. Respondent's representations to Postles that the King Drive property was being sold by Lomax was false because Lomax did not own either unit 1Nor 2N at 5924 S. King drive. Denied that an intentionally false statement was made by Respondent. 98. Respondent knew that Lomax was not the owner of the property at the time he prepared the warranty deed but never advised Postles that Lomax was not the seller of the King Drive property, as he had represented to Postles in the real estate sales contract. Respondent has insufficient knowledge ofthese allegations which are neither admitted nor denied. 99. The warranty deed that Respondent prepared and sent to Postles was false because Lomax never owned the King Drive property, and could not transfer the property to Postles. The notary acknowledgement was false because Lomax did not sign the deed. Respondent knew the deed and notary acknowledgment were false at the time he prepared the deed and sent the deed to Postles. Respondent sent Postles the deed to deceive him into believing the funds he had transferred into his IOLTA account were used to purchase the King Drive property Postles received the unrecorded false warranty deed on or about June 30, Respondent has insufficient knowledge of these allegations which are neither admitted nor denied On or about July 1, 2015, Respondent, or someone acting on his behalf, recorded the tax deed for the sale of 5924 S. King Drive, Unit 2N. The deed was recorded by Judd Harris. 21

22 102. Respondent did not send Postles a copy ofthe tax deed Respondent never advised Postles that he was not buying Unit 1Nfrom Lomax, but rather, was purchasing Unit 2N at a tax sale Respondent's representations to Postles about the cost oftitle insurance were false because the King Drive property was transferred to Postles by tax deed. Respondent knew that Postles would not receive title insurance but Respondent never advised Postles of this fact, or refunded the $1,200 Postles paid for title insurance In or about March 2015, Postles discovered that there was no deed recorded showing that he owned the King Drive property (Unit IN), and that on February 9, 2015, the King Drive property (Unit 1N) had been transferred, by special warranty deed, from the grantor, First National Acquisitions. LLC. to the grantee. Iouernia Investments. LLC. Respondent has insufficient knowledge of these allegations which are neither admitted nor denied In or about March 2015, Postles contacted Respondent to inquire why the property he believed he owned, the King Drive Property (Unit 1N) had been sold. Respondent told Postles that there had been amistake in the paperwork and that Postles owned Unit 2N. Postles asked Respondent to send him proof that he owned Unit 2N. Respondent did not respond to Postles' request. Admitted Respondent was informed that Postles owned Unit 2N. Any remaining allegations are denied By reason of the conduct described above, Respondent has engaged in the following misconduct: a. conduct involving dishonest)', fraud, deceit or misrepresentation, by deceiving Postles about certain aspects of his purchase of the King Drive property^ in violation of Rule 8.4( c) of the Illinois Rules of Professional Conduct (2010). 22

23 WHEREFORE, Respondent respectfully requests that Count VII be dismissed. Respectfully Submitted, CHINYE KE, Respondent By Adrian Vuckovich COLLINS BARGIONE & VUCKOVICH One North LaSalle Street Suite 300 Chicago, Illinois av^:cb-law.com 23