2 NJ Lawyers in Trouble for Real Estate Deals
Posted Sep 7, 2007 4:53 AM CST
By Debra Cassens Weiss
An ethics panel is recommending discipline for two New Jersey lawyers handling real estate deals that unraveled or involved fraud.
The board recommended a six-month suspension for Bincy Abraham of Marlton, N.J., a lawyer hired by McClary Financial Group in Bloomfield, N.J., to represent the company’s homebuying clients, the New Jersey Law Journal reports.
The panel said Abraham gave downpayments to the financial group instead of keeping them in escrow. When two contracts to buy homes fell through, the buyers didn’t get all of their money back from the company.
The ethics panel said Abraham’s relationship with the financial group and buyers created a conflict of interest, and her failure to keep the money in escrow violated rules requiring safeguarding of funds.
The opinion noted that Abraham was inexperienced and she quit after three months, never receiving any fees.
In a second case, the board recommended a reprimand for Lynn Gale of Union, N.J., who handled real estate deals for a client who bought homes and immediately resold them at a higher price. Gale did not review the accuracy of information she provided on HUD-1 documents that her client gave her, the legal newspaper reports.
The client misled the mortgage lender about the value of the property, kept it after the “sale,” then rented it out and failed to make mortgage payments. The client was later sentenced to 21 months in prison for his actions.
The panel said Gale was unaware of the fraud, had worked 33 years without ethical wrongdoing, and had suffered a stroke and other medical problems.