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6 RECEIVED VIRGIN I A: BEFORE THE DISCIPLINARY BOARD OF THE VIRGINIA STATE BAR Sep 09, 2016 VSB CLERK'S OFFICE IN THE MA TIERS OF WARREN WILSON MCLAIN VSB DOCKET NO VSB DOCKET NO PETITION FOR EXPEDITED HEARING COMES NOW the Virginia State Bar, by Assistant Bar Counsel Kathleen M. Uston, and files this its Petition for Expedited Hearing requesting that the Virginia State Bar Disciplinary Board enter an Order requiring Warren Wilson M,cLain ("Respondent") to appear before the Board on Friday, the 28th day of October, 2016, at 9:00 a.m., at a location to be set forth in such Order, for a hearing pursuant to Part Six, Section IV, Paragraph D of the Rules of the Supreme Court of Virginia, at the conclusion of which the Bar will move the Board to revoke the Respondent's license to practice law in the Commonwealth of Virginia. In support of its Petition, the Bar states as follows: 1. As of the date hereof, Respondent is classified as an Active Member of the Virginia State Bar, Not in Good Standing, his license having been suspended on August 19, 2016, due to his failure to pay costs imposed upon in another matter heard by the Disciplinary Board on March 25, 2016, discussed in more detail in Paragraph 3, below. 2. Upon information and belief, Respondent is not now actively engaged in the practice of law in the Commonwealth of Virginia since he is, and has been for some time, recuperating in a rehabilitation facility following a fall that resulted in serious injury. Respondent did advise Virginia State Bar Investigator David W. Jackson, however, that he has active client matters for which he maintains responsibility. 3. The Respondent was licensed to practice law in the Commonwealth of Virginia on June 2, In VSB Docket Nos and , Respondent was Publicly Reprimanded by the Disciplinary Board by Memorandum Order dated April 20, 2016, and certain terms were imposed upon him pertaining to his proper handling of client funds and maintenance of trust account records. A copy of the Memorandum Order is attached hereto as VSB Exhibit # As set forth in more detail below, it does not appear that Respondent has complied with those terms and his failure to do so poses a risk of imminent danger to the public.

7 5. In addition, an investigation of allegations of ethical misconduct pending against Respondent in a separate matter make clear that his continued practice of law poses imminent danger to the public and will result in the loss of funds belonging either to his clients or to a third party. As to VSB Docket No : 6. On or around August 2, 2016, the Virginia State Bar (the "Bar") received notice from BB&T Branch Banking and Trust Company ("BB&T") that a check in the amount of $ had been presented against Respondent's trust account but that there were insufficient funds in the account to cover that check. 7. On or around August 12, 2016, the Bar received notice from BB&T that a check in the amount of $1, had been presented against Respondent's trust account but that there were insufficient funds in the account to cover that check. 8. Pursuant to the terms imposed upon him in the matters referenced in Paragraph 3, above, Respondent was to develop and implement a Plan of Action, which Plan he was to submit to the Bar in writing. This Plan was to set forth in detail the steps that Respondent would take to bring his trust account and trust account maintenance into compliance with Rule of Professional Conduct ("RPC") The deadline for this term was thirty (30) days from April 20, Also pursuant to the terms imposed in the matters referenced in Paragraph 3, above, Respondent was to certify to the Bar that he had completed implementation of the Plan of Action and that his trust account was in full compliance with RPC The deadline for this term was ninety (90) days from April 20, It is clear from the facts that the Bar received two NSF notices on Respondent's trust account subsequent to entry of the Board's Memorandum Order, and that the deadlines for Respondent to have complied with the terms imposed therein, that Respondent has failed to effectively implement any Plan of Action. It is equally clear that Respondent's trust account is not, and has not been, in compliance with RPC As to VSB Docket No : 11. On or around May 27, 2016, the Bar received a complaint from Dr. Rajesh Mehra alleging that Respondent failed to honor a valid Assignment and Authorization in Dr. Mehra's favor, despite having settled the personal injury case to which the Assignment was attached in late 2015 or early Respondent executed Dr. Mehra's Assignment on November 17, 2011, and bound himsclf to pay Dr. Mehra directly from any settlement proceeds. 13. As noted in Paragraphs 6 and 7, above, Respondent had insufficient funds in his

8 trust account to cover checks in the amounts of$ on August 2,2016, and $1, on August 12, The total amount of Dr. Mehra's lien, which Respondent was obligated to pay from any settlement proceeds, was $5, During the course of the investigation of this matter, Respondent confirmed that he had not yet paid Dr. Mehra any of the funds he was owed, and stated that he had been trying to convince Dr. Mehra to compromise his lien without success. 16. On the dates of the NSF notices referenced in Paragraphs 6 and 7, above., Respondent should have, but did not, have a balance in his IOL TA that either exceeded or equaled $5, I 7. Respondent has not come into compliance with RPC 1.15 despite the Order of the Board requiring that he do so, to say nothing of his independent obligation under the rules to remain in full compliance with this rule. 18. The Respondent's failure to comply with the terms offered him by the Disciplinary Board, his clear violation of Rule of Professional Conduct 1. 15, and the fact that he should, but clearly does not, have a minimum of $5, in his trust account being held for the benefit of Dr. Mehra demonstrate that Respondent's continued presence on the rolls of attorneys in this Commonwealth will result in imminent danger to the public, and could result in further injury to, and loss of property of, his clients and/or other persons. 1 Given the urgent nature of this matter, a response to the Bar's subpoena duces tecum issued to BB&T for Respondent's trust account records is not yet in hand. However, it is anticipated that those records will be received prior to the hearing of this case.

9 WHEREFORE, the Virginia State Bar respectfully petitions the Virginia State Bar Disciplinary Board to enter an Order revoking the license of Respondent Warren Wilson McLain to practice law in the Commonwealth of Virginia, following a hearing on this Petition, for violation of the aforesaid Virginia Rule of Professional Conduct. COMMONWEALTH OF VIRGINIA, AT LARGE, to-wit: VIRGINIA STATE BAR By: ~ L.---- KATHLEEN M. US TON Assistant Bar Counsel Appeared before the undersigned Notary Public, in ~ Virginia, Kathleen M. Uston, Assistant Bar Counsel, who, after being duly sworn according to law, gave oath that the contents of the foregoing Petition for Expedited Hearing are true and accurate to the best of her knowledge, information and belief. Given under my hand this 1s-'1day of September, My Commission Expires: ;')( ~ ~~ SUNNY A. SHRESTHA NOTARY PUBLIC REGISTRA.TION # COMMONWEALTH OF VIRGINIA MY COMMISSION EXPIRES 05/ Notary Public CERTIFICATE OF SERVICE "-~pl;/ I certify that on the 3f day of September, 2016, I caused to be mailed by certified mail a true and correct copy of the foregoing Petition for Expedited Hearing to Warren Wilson McLain, Respondent, at Jones St Ste 101-A, Fairfax, VA 22030, the Respondent's last address of record with the Virginia State Bar. Kathleen M. Uston Assistant Bar Counsel

10 VIRGINIA: BEFORE THE VIRGINIA STATE BAR DISCIPLINARY BOARD IN THE MATTER OF WARREN WILSON McLAIN VSB Docket Nos MEMORANDUM ORDER This matter came on to be heard on March 25, 2016, before a panel of the Virginia State Bar Disciplinary Board consisting of Whitney G. Saunders, Chair, Pleasant S. Brodnax, III, Samuel R. Walker, Stephen A. Wannall, Lay Member, and Tyler E. Williams, III. The Virginia State Bar was represented by Kathleen Maureen Uston, Assistant Bar Counsel. The Respondent, warren Wilson McLain, appeared in person pro se. The Chair polled the members of the Board panel to ascertain whether any member was conscious of any personal or financial interest or bias which would preclude any of them from fairl y hearing this matter and serving on the panel, to which inquiry each member responded in the negative. Jennifer L. Hairfield, court reporter, Chandler & Halasz; P.O. Box 9349; Richmond, Virginia (804) , after being duly sworn, reported the hearing and transcribed the proceedings. The matter under Docket no is before the Disciplinary Board (the "Board") upon the Subcorrunittee Determination (Certification) of the Fifth District Subcorrunittee, Section 1, and the rnatt er under Docket no is before the Board upon the Subcommittee VSB EXHIBIT I

11 Determination (Certification) of the Fifth District Subcommittee, Section 1. Those Certifications were duly served upon the Respondent on August 21, 2015 and December 17, 2015, respectively, in accordance with Paragraph A of Part 6, Section IV of the Rules of the Supreme Court of Virginia. Respondent did not file an answer or answer and demand. Bar Counsel moved for admission of VSB Exhibits nos. 1 through 4, inclusive, in Docket no which motion was granted without objection. Bar Counsel moved for admission of the Memorandum Report of Investigation as VSB Exhibit 5 in Docket no which motion was granted without objection. Finally, Bar Counsel moved for admission of VSB Exhibits nos. 1 through 4, inclusive, in Docket no which motion was granted without objection. The Respondent stipulated to the Findings of Fact and the misconduct alleged in the Certifications filed herein. Thereupon, the Board went into recess and, after due deliberation, the Board makes the following findings of fact on the basis of clear and convincing evidence, based upon the Exhibits and the parties' stipulations: Docket no At all times relevant hereto, Respondent has been an attorney licensed to practice law i n the Corrunonwealth of Virginia

12 2. On or around September 19, 2014, the Virginia State Bar received notice from BB&T Bank (hereinafter, "BB&T) that an item presented for payment on Respondent's I OLTA, account # , was "force paid" creating an overdraft on that account in the amount of $ (hereinafter the "NSF"). The NSF from BB&T disclosed that the presented item was in the amount of $ and posted to Respondent's IOLTA on September 9, The NSF further d i sclosed that on September 11, 2014, a deposit in the amount of $ was made to cover the overdraft. 3. In his response to the bar dated October 7, 2014, Respondent stated that the NSF resulted from the fact that a check from a client was dishonored, against which he had already withdrawn funds. Respondent stated that he had taken the steps necessary to rectify the matter and that he would, " check [his] balance dail y from now on." 4. During the course of the investigation of this case, it was discovered that Respondent's client neve r reimbursed Respondent for the dishonored check, and that Respondent wrote a check against the dishonored funds without first confirming that the funds were available. 5. The investigation also r evealed that Respondent did not maintain trust account records as required under Rule of Professional Conduct ("RPC"l 1.15, including appropriate cash receipts and disbursements journals and client subsidiary ledgers. Respondent also did not perform the monthly and quarterly reconciliations of his IOLTA required under RPC The investigation also reveal ed the fact that Respondent's operating account was closed by BB&T Bank due to multiple overdrafts and it appears from a review of bank records that Respondent paid various personal vendors, incl uding Verizon and Cox Communications, directly from his IOLTA, all without mai ntaining the trust account records and ledgers required under RPC 1. 15, or maintaining a current account balance. Docket no At all times relevant hereto, Respondent has been an attorney licensed to practice law in the Commonwealth of Virginia. 2. On or around September 22, 2015, the Virginia State Bar received notice from BB&T Bank that a n item presented for payment on Respondent's IOLTA, Account # was presented against insufficient funds creating an - 3 -

13 overdraft on that account (hereinafter the "NSF"). The NSF from BB&T disclosed that the presented item was in the amount of $1, , and posted to Respondent's IOLTA on September 1 1, During his interview with Virginia State Bar Investigator David w. Jackson, Respondent stated that the debit from his IOLTA in the amount of $1,147.54, which is the charge that caused the NSF, was a payment made to Northwestern Mutual Insurance Company to pay the premium on a life insurance policy he is required to maintain for his ex-wife ' s benefit. 4. During the course of his interview with Investigator Jackson, Respondent admitted that he does not keep records of the time he spends on client matters in order to determine what he is owed by his clients and when. Respondent stated that he does not keep contemporaneous time records since he claimed to, "just know how much time [he] spent" on a client's case. Further, Respondent explained that he reviews his client subsidiary ledger cards to determine how much money he has on deposit for his clients, and relies upon that information when making withdrawals from his IOLTA. 5. However, it appears that Respondent does not keep his client subsidiary ledger cards current or up to date. Upon being asked if the client subsidiary ledger cards for Respondent's hourl y civil clients would reflect the current balance or funds that Respondent was holding for those clients in trust, Respondent acknowledged that they would not s ince he would need to first review the file and update the client subsidiary ledger card. 6. The investigation conducted in this case also revealed that Respondent does not maintain other trust account records as required under Rule of Professional Conduct ("RPC") 1. 15, including appropriate cash receipts and disbursements journals. Specifically, while Respondent apparently records deposits and disbursements in his check register, he does not maintain a running balance therein. Further, it does not appear that Respondent regularly maintains an identification of the client matter, the date of the transaction, the name of the payor or payee, and the manner in which trust funds were recei ved, disbursed, or transferred from the IOLTA account in his cash receipts and disbursements journal. 7. Although Respondent advised Investigator Jackson that he does perform monthly reconciliations of his trust account, he described those reconciliations as including his making checkmarks in his check register to indicate that a check has cleared. This method falls short of the monthly reconciliations required under the RPC 1.15 since there is no reconciliation of the total balance reflected - 4 -

14 on the client subsidiary ledger cards against the bank statements. There a l so does not appear to be a running balance maintained in Respondent's client cash receipts and disbursements journal that is then reconciled against the monthly bank statements. It also does not appear that Respondent performs the required quarterly reconciliations of his IOLTA as required by RPC The investigation in this matter also revealed the fact that Respondent is apparently paying personal expenses directly out of his IOLTA. Respondent acknowledged that his IOLTA is the only bank account that he currently has since his operating account was closed by BB&T due to excessive overdrafts. A review of his bank statement and other records shows that Respondent paid various vendors, including Verizon and Cox Communications, for personal expenses directly from his IOLTA, all without maintaining the trust account records and ledgers required under RPC 1.15, or maintaining a current account balance. 9. Finally, although Respondent asserted that the balance in his IOLTA never dropped below $00.00 in the instant matter, an analysis of the account confirms that the balance did drop below $00.00 following the Northwestern Mutual Insurance Company Premium debit. Review of Respondent's IOLTA records further reveals that on at least two occasions, the account balance dropped below the amount which Respondent stated he had on deposit for his two hourly clients. The Board then stated that it had determined that the Respondent's conduct as stipulated to above constituted violations of the following provisions of the Rules of Professional Conduct by c l ear and convincing evidence: Docket no RUI..E 1.15 Safekeeping Property (a) Depositing Funds. (1) All funds received or held by a lawyer or law firm on behalf of a client or a third party, or held by a lawyer as a fiduciary, other than reimbursement of advances for costs and expenses shall be deposited in one or more identifiable trust accounts; all other property held on behalf of a client should be placed in a safe deposit box or other place of safekeeping as soon as practicable

15 (3) No funds belonging to the lawyer or law firm shall be deposited or maintained therein except as foilows: (i) funds reasonably sufficient to pay service or other charges or fees imposed by the financial institution or to maintain a required minimum balance to avoid the imposition of service fees, provided the funds deposited are no more than necessary to do so; or (ii) funds in which two or more persons (one of whom may be the lawyer) claim an interest shall be held in the trust account until the dispute is resolved and there is an accounting and severance of their interests. Any portion finally determined to belong to the lawyer or law firm shall be withdrawn promptly from the trust account. (b) Specific Duties. A lawyer shall: (2) identify and label securities and properties of a client, or those held by a lawyer as a fiduciary, promptly upon receipt; (3) maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accountings to the client regarding them; and (5) not disburse funds or use property of a client or third party without their consent or convert funds or property of a client or third party, except as directed by a tribunal. (c) Record-Keeping Requirements. A lawyer shall, at a minimum, maintain the following books and records demonstrating compliance with this Rule: (1) Cash receipts and disbursements journals for each trust account, including entries for receipts, disbursements, and transfers, and also including, at a minimum: an identification of the client matter; the date of the transaction; the name of the payor or payee; and the manner in which trust funds were received, disbursed, or transferred from an account. (2) A subsidiary ledger containing a separate entry for each client, other person, or entity from whom money has been received in trust. The ledger should clearly identify: (i) the client or matter, including the date of the transaction and the payor or payee and the means or methods - 6 -

16 by which trust funds were received, disbursed or transferred; and (ii) any unexpended balance. (3) In the case of funds or property held by a lawyer as a fiduciary, the required books and records shall include an annual summary of all receipts and disbursements and changes in assets comparable in detail to an accounting that would be required of a court supervised fiduciary in the same or similar capacity; including all source documents sufficient to substantiate the annual summary. (4) All records subject to this Rule shall be preserved for at least five calendar years after termination of the representation or fiduciary responsibility. (d) Required Trust Accounting Procedures. In additi on to the requirements set forth in Rule 1.15 (a) through (c), the following minimum trust accounting procedures are applicable to all trust accounts. (1) Insufficient Fund Reporting. All accounts are subject to the requirements governing insufficient fund check reporting as set forth in the Virginia State Bar Approved Financial Institution Agreement. (2) Deposits. All trust funds received shall be deposited intact. Mixed trust and non-trust funds shall be deposited intact into the trust fund and the non-trust portion shall be withdrawn upon the clear ing of the mixed fund deposit instrument. All such deposits should include a detailed deposit slip or record that sufficiently identifies each item. (3) Reconciliations. (i) At least quarterly a reconciliation shall be made that reflects the trust account balance for each client, person or other entity. (ii) A monthly reconciliation shall be made of the cash balance that is derived from the cash receipts journal, cash disbursements journal, the trust account checkbook balance and the trust account bank statement balance. (iii) At least quarterly, a reconciliation shall be made that reconciles the cash balance from (d) (3) (ii) a bove and the subsidiary ledger balance from (d) (3) (i). (iv) Reconciliations must be approved by a lawyer in the law firm

17 (4) The purpose of all receipts and disbursements of trust funds reported i n the trust journals and ledgers shall be fully expl a i ned and supported by adequate records. Docket no RULE 1.15 Safekeeping Property {a) Depositing Funds. (1) All funds received or held by a lawyer or law firm on behalf of a client or a third party, or held by a l awyer as a f i duciary, other than reimbursement of advances for costs and expenses shall be deposited in one or more identifiable trust accounts; all other property held on behalf of a client should be placed in a safe deposit box or other place of safekeeping as soon as practicable. (3) No funds belonging to the l awyer or law firm shal l be deposited or maintained therein except as follows: (i) funds reasonably sufficient to pay service or other charges or fees imposed by the financial institution or to mai ntain a required minimum balance to avoid the imposition of service fees, provided the funds deposited are no more than necessary to do so; or (ii) funds in which two or more persons (one of whom may be the lawyer) claim an interest shal l be held in the trust account until the dispute is resol ved and there is an accounting and severance of their i nterests. Any portion finally determined to belong to the lawyer or law firm shall be withdrawn promptly from the trust account. (b) Specific Duties. A lawyer shall: (3) maintain compl ete records o f all f unds, securit ies, and other properties of a c l ient comi ng into the possession of the lawyer and render appropriate accountings to the client regarding them; and (5) not disburse funds or use property of a client or third part y without their consent or convert funds or property of a c l ient or third party, except as directed by a tribunal. (c) Record- Keeping Requirements. A lawyer shall, at a minimum, maintain the following books and records demonstrating compliance with this Rule: - 8 -

18 (1) Cash receipts and disbursements journals for each trust account, including entries for receipts, disbursements, and transfers, and also including, at a minimum: an identification of the client matter; the date of the transaction; the name of the payor or payee; and the manner in which trust funds were received, disbursed, or transferred from an account. (2) A subsidiary ledger containing a separate entry for each client, other person, or entity from whom money has been received in trust. The ledger shoul d clearly identify: (i) the client or matter, including the date of the transaction and the payor or payee and the means or methods by which trust funds were received, disbursed or transferred; a n d (ii) any unexpended balance. (3) In the case of funds or property held by a lawyer as a fiduciary, the required books and records shall include an annual summary of a l l receipts and disbursements and changes in assets comparable in detail to an accounting that would be required of a court supervised fiduciary in the same or similar capacity; including all source documents sufficient to substantiate the annual summary. (4) All records subject to this Rul e shall be preserved for at least five calendar years after termination of the representation or fiduciary responsibility. (d) Required Trust Accounting Procedures. In addition to the requirements set forth in Rule 1.15 (a) through (c), the following minimum trust accounting procedures are applicable to all trust accounts. (2) Deposits. All trust funds received shall be deposited intact. Mixed trust and non-trust funds shall be deposited intact into the trust fund and the non-trust portion shall be withdrawn upon the clearing of the mixed fund deposit instrument. All such deposits should include a detailed deposit slip or record that sufficiently identifies each item. (3) Reconciliations. (i) At least quarterly a reconciliation shall be made that reflects the trus t account balance for each client, person or other entity

19 (ii} A monthly reconciliation shall be made of the cash balance that is derived from the cash receipts journal, cash disbursements journal, the trust account checkbook balance and the trust account bank statement balance. (iii} At least quarterly, a reconciliation shall be made that reconciles the cash balance from (d} (3) (ii) above and the subsidiary ledger balance from (d) (3) (i). (iv) Reconciliations must be approved by a lawyer in the law firm. (4) The purpose o f all receipts and disbursements of trust funds reported in the trust journals and ledgers shall be fully explained and supported by adequate records. Unified Sanction. Thereafter, the Board then received further evidence of aggravation and mitigation from the Bar and Respondent, including Respondent's prior disciplinary record. The Board recessed, and, after due deliberation, the Board reconvened to announce the sanction to be imposed. The Chair announced that, giving due consideration to the misconduct found, the mitigating factors present, the lack of aggravating factors in this case, the lack of injury to any client or the public, and the absence of prior disciplinary record, and it otherwise appearing proper to do so, imposed the sanction of Public Reprimand with Terms, to-wit: 1. For a period of five (5) years following entry of this Order, the Respondent hereby authorizes a Virginia State Bar Investigator to conduct unannounced personal inspections of Respondent's trust account books, records and bank records to ensure Respondent's compliance with all of the provisions of Rule 1.15 of the Rules of Professional Conduct, and

20 Respondent shall fully cooperate with the Virginia State Bar Investigator in such inspections. 2. Within 15 days of the date of this Order, the Respondent shall confirm in writi ng that he has revi ewed the requirements of Rule 1.15 of the Rules of Professional Conduct. 3. Within 30 days of the date of this Order, the Respondent shall submit to Bar Counsel a Pl an of Action, outlining those steps necessary to bring his trust account or accounts into compliance with the requirements of Rule 1.15 of the Rules of Professional Conduct. 4. Within 90 days of the date of thi s Order, t he Respondent shall provide wri tten certification to Bar counsel of his completion of the above Plan of Action and that his trust account or accounts are, in fact, in compliance with the requirements of Rule 1.15 of t he Rules of Professional Conduct. 5. Should Respondent fail or refuse to comply with the terms of this Order, the Board imposes the alternative discipline of Suspension for a period of six (6) months. 6. It is further ORDERED that, pursuant to Part 6, IV, i13-9 (E) (1) of the Rules of the Supreme Court of Virginia, the Clerk of the Disciplinary System shall assess costs against the Respondent. 7. It is further ORDERED that the Clerk of the Disciplinary System shall send a certified copy of this Order by

21 Certified Mail Return Receipt Requested, to Respondent at his last address of record with the Virginia State Bar, towit: Jones Street, Suite 1 01-A; Fairfax, Virginia 22030, and a copy by regular mail to Kathleen Maureen Uston, Assistant Bar Counsel, 1111 East Main Street, Suite 700; Richmond, Virginia ENTERED this.:60 day of April, VIRGINA STATE BAR DISCIPLINARY BOARD