Law Professor Resigns From The Bar Over Misappropriation Of Client Funds

Slipping it into his own pocket We hear about a lot of “sexy” legal ethics issues here at Above the Law. I’m not talking about sex, or at least not just sex, but all sorts of juicy tales of crimes of moral turpitude that get lawyers in hot water with the bar. Those are always intriguing, but the thing that really gets hit home during any legal ethics class is all the ways no to co-mingle your funds with your client’s funds.

Looks like a tenured law professor never really got that memo.

Rutgers Law School professor Ari Afilalo, with a J.D. from Boston University School of Law and LL.M.from Harvard Law School, focuses on international transactions. According to the Rutgers website:

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Professor Afilalo teaches courses in international trade law, international business transactions and contracts. His scholarly interests include the treatment of intellectual property in free trade areas, the law governing the elimination of non-tariff barriers to trade, the European Union’s system of judicial remedies and the international rules for the protection of cross-border investment.

Though he is tenured, Professor Afilalo maintained active bar membership and had a transactional practice. Now he has resigned his license after admitting to two instances of misappropriating client funds. The Legal Profession Blog reports from the decision:

In two instances, respondent withdrew IOLA [trust account] funds that did not belong to him in order to meet his personal and business expenses. In one instance, in December 2013, respondent received a $220,000 contract deposit on behalf of his client, the seller in a real estate transaction, which he deposited into his IOLA account. Between January 2 and February 14, 2014, when the transaction closed, respondent repeatedly invaded the $220,000 contract deposit such that, as of February 11, 2014, his account balance had fallen to $500. Respondent replenished the funds he withdrew with funds from his two operating accounts.

In the second instance, on August 5, 2014, respondent deposited a $100,000 contract deposit he received from his clients, a married couple, whom he represented in connection with their purchase of a condominium; he deposited the funds into his IOLA account. At the time, respondent was holding $10,395.96 on behalf of another client in his IOLA account. Between August 5 and August 20, 2014, when the transaction closed, respondent invaded the IOLA funds by making transfers to his business and personal accounts such that, as of August 14, 2014, his account balance had fallen to $74,495.96.

The investigation into Professor’s Afilalo’s affairs began when a check, drawn on a client’s funds, bounced.