Attorney who ‘blindly followed instructions’ censured for helping Internet scammer
Posted Oct 23, 2013 8:09 AM CDT
By Debra Cassens Weiss
Updated: A Rhode Island lawyer who marketed himself as an “attorney pay master” has been censured for helping a client transfer funds to offshore accounts before discovering the client was an Internet scammer.
Johnston, R.I., lawyer Donald DeCiccio cooperated with authorities after learning in October 2012 that the client was using the money transfers to defraud other individuals, according to the public censure order (PDF) by the Rhode Island Supreme Court. But he failed to perform adequate due diligence before making the money transfers, violating an ethics rule requiring lawyers to hold funds of others “with the care required of a professional fiduciary,” the court said.
The court said a public censure was the proper sanction. “We believe that the respondent’s conduct resulted from a lack of judgment rather than evil intent,” the court said. The Providence Journal and the Associated Press reported on the censure.
Though lawyers themselves are often the victims of Internet scams, the investigation in this case was spurred by an Indiana accountant's complaints, according to Supreme Court Chief Disciplinary Counsel David Curtin, who spoke with the ABA Journal. The accountant and his business partner put up $100,000 to obtain a loan; their money then disappeared.
The scammer client had contacted DeCiccio by email after the lawyer had marketed himself as an “attorney pay master” who would act as an escrow agent for commodities brokers, holding funds until receiving confirmation that they had been earned and could be disbursed. DeCiccio concluded the client was a legitimate broker after a “cursory investigation” by Internet, the court said. “We note that the Internet can be a source of useful information,” the court said in a footnote. “Unfortunately, not everything on the Internet is reliable.”
Without inquiring as to the source of the client’s funds, DeCiccio followed his client’s instructions and transferred the money to accounts around the world, including the Cook Islands, St. Vincent and the Grenadines. He earned more than $68,000 in commission in slightly over a month for his services handling $3.4 million in deposits.
“Respondent provided unlimited access to an individual he had never met, other than via email contact, to deposit funds into his client account,” the court said. “He received deposits into that account from unknown sources, and he made no effort to determine whose funds he had received. He then blindly followed instructions to forward those funds to accounts around the world. A clearer breach of fiduciary duty would be difficult to imagine.”
DeCiccio has not been charged with criminal wrongdoing. He has deposited $50,000 of the funds he received into an account to cover claims by fraud victims.
Curtin told the Providence Journal that DeCiccio had initially consulted him about the propriety of providing the pay master services. “My first question was: What is an attorney pay master?” Curtin said. He wondered why a legitimate commodities broker would need a lawyer in Johnston.
Curtin “strongly recommended” that DeCiccio refrain from providing the services. “It turned out he didn’t heed my advice,” Curtin said.
DeCiccio apparently thought being a pay master "was an easy way to make good money, and that generally doesn’t work out too well," Curtin observed in the ABA Journal interview.
Updated at 10:18 a.m. to move lawyer-scam information higher in the story. Updated at 11:10 a.m. to include Curtin's comments to the ABA Journal.