Lawyer Falls For Internet Brokerage Scam, Receives Public Censure

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oddsends500“We note that the internet can be a source of useful information. Unfortunately, not everything on the internet is reliable.” - In the Matter of Donald F. DeCiccio. 

Here’s an interesting disciplinary action out of Rhode Island last month: the story begins when attorney Donald DeCiccio read about an opportunity online:

Through friends and internet research he became aware that attorneys could offer their services, and be paid a fee, to act as an “attorney pay master” to facilitate certain types of commodities transactions. In essence, as understood by the respondent, an attorney pay master acts as an escrow agent who receives and holds the funds due to a commodities broker and then disburses the funds to the broker upon receiving confirmation that the funds have been earned. The attorney pay master receives a fee for acting as this escrow agent.

DeCiccio pursued this opportunity, and started a website to facilitate this venture. He was soon contacted by one “Rajat Ohri”, about whom the recent Rhode Island Supreme Court opinion notes:

Whether “Rajat Ohri” is a real person, a real person whose identity had been misappropriated, or is a fictitious name is unclear from the record. For purposes of this order we will refer to “Ohri” as that is how he was known to the respondent. We draw no conclusion that a real person by that name was actually involved in this matter.

“Ohri” – in quotes – sought to use DeCiccio’s services as an attorney pay master, and after a “cursory investigation”, DeCiccio agreed. To his credit, at the time he asked the State Bar’s Disciplinary Counsel for advice as regards the ethics of conducting such online brokerage. To his discredit, he decided to continue despite Counsel’s “strong[] recommend[ation] that he not engage in these services”. Over the course of thirteen months, fifteen different deposits were made into DeCiccio’s client account, totaling almost $3.5 million. Per the agreement, he then transferred this money to various offshore bank accounts at “Ohri’s” instruction, earning himself a tidy commission of $68,734. During this time:

The respondent made no effort to determine whether Ohri was entitled to receive these funds, and did not question the legitimacy of these transactions.

Eventually the penny dropped, and DeCiccio found out that “Ohri was defrauding other individuals and was using the respondent’s client account to facilitate that fraud.” He  - and his malpractice insurer – have deposited money into a fund to pay some of the victims’ fraud, and now comes the matter of his ethics investigations. The Disciplinary Board of the Supreme Court had already found DeCiccio guilty of violating ethics rules, and last month the Supreme Court itself agreed. Not surprisingly, it was the comingling of funds in the client account that garnered the most attention, with the court concluding that “[a] clearer breach of fiduciary duty would be difficult to imagine.”

DeCiccio’s one piece of good fortune was that the Court found that his “conduct resulted from a lack of judgment rather than evil intent”, and so he received a public censure. A powerful sanction, for sure, but it could have been a lot more severe considering he asked for, and then ignored, formal ethical advice. The quotation we pasted at the top of this post provides words for all of us – attorney or not – to live by.

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