Lawyer Suspended for Taking Interest-Free $50K Loan from Ex-Client Who Won Big Settlement
A New York appeals court has suspended a Manhattan lawyer for three months because he took a $50,000 interest-free loan from a former client.
The Appellate Division, First Department, said lawyer John Ioanno took “advantage of the trust and gratitude of a former client” after helping him secure a $4.5 million settlement in a personal injury case. Thomson Reuters News & Insight and the Legal Profession Blog report on the Nov. 10 decision.
The loan, which was never reduced to writing, had no due date, no interest and no collateral. The court said Ioanno had violated the ethics rule requiring lawyers entering into a business transaction with a client to advise the client to get independent advice and to get consent to the transaction in writing.
The court said the ethics provision doesn’t apply to every transaction with a former client, but it may apply if the client reasonably expects the lawyer will exercise professional judgment on his behalf. Ioanno’s client had called the lawyer a month before the loan deal for advice on an insurance matter and still regarded Ioanno as his lawyer, the court said.
The court also found that Ioanno had failed to file retainer agreements and closing statements in 59 cases.
Corrected on Nov. 12 to say Appellate Division, First Department.
