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Misappropriation of clients’ money prompts disbarment

By: Laura Brown//March 8, 2024//

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Misappropriation of clients’ money prompts disbarment

By: Laura Brown//March 8, 2024//

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The Minnesota Supreme Court announced on Feb. 28 that attorney Fong Lee has been disbarred for misappropriating more than $18,000 from three clients, among other violations. Lee has been disciplined before, and was temporarily suspended in 2023 pending resolution of this matter.

Lee was admitted to practice law in Minnesota in 2007, and he operated out of St. Paul. Misconduct, which stemmed from trust accounts and fee arrangements with clients, arose very soon after licensing. In 2009, Lee was placed on private probation for two years. He was then placed on probation for another two years in 2016. In 2020, Lee was admonished.

The director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against Lee in January 2023. This misconduct included five clients, three of whom are Hmong immigrants and do not speak English as a first language. Lee and the clients entered into contingency fee arrangements whereby Lee would get a percentage of any settlement. However, Lee did not give his clients the full amount of their share. Ultimately, Lee misappropriated over $18,000 from his clients.

Those clients have suffered harm, including financial hardship, due to this. One client had a lien placed on her home. Another client struggled to pay for basic living expenses. Two of Lee’s clients also reported that they experienced profound stress due to their experiences with Lee.

Lee also failed to return unearned fees to a client, did not maintain required trust account books and records, did not adequately communicate with several clients, and failed to cooperate with the disciplinary investigation.

The OLPR director also listed several other disciplinary rule violations, including: verbal modification of a contingent fee agreement; failure to provide an accounting of withdrawals from client funds upon request; failure to return a client file upon request; failure to deposit an advance payment for a flat fee representation into a trust account; failure to deposit unearned fees into a trust account absent a valid flat fee retainer; failure to obtain the payor’s signature on cash receipts;  and failure to provide evidence to support a client’s application for adjustment of status and to file an adequately supported appeal.

The director asked for disbarment or the imposing of other appropriate discipline. Lee was temporarily suspended in June 2023.

“Disbarment is the only appropriate discipline,” said Susan Humiston, director of the OLPR at oral arguments before the court. “Respondent’s clients were vulnerable. In a couple instances, they had limited English language proficiency and trusted respondent because he was a member of the Hmong community.”

“Respondent’s misconduct caused harm beyond loss of money, because his clients lost faith in their lawyer as well as a fellow community member,” Humiston added.

A referee determined that there were several aggravating factors, including Lee’s prior discipline and substantial experience in the practice of law. Additionally, Lee demonstrated a lack of remorse and harmed clients who were especially vulnerable, given their backgrounds.

“Lee misappropriated funds from at least three clients and violated several rules of professional conduct over the course of more than a year, so his misconduct was neither a ‘brief lapse in judgment’ nor a ‘single, isolated incident,’” the court wrote.

The court also considered the harm to the legal profession. It concluded that Lee’s actions eroded the public’s confidence in lawyers. This was supported by one of Lee’s clients, who testified that she had “absolutely no more trust in lawyers.”

Lee did not attend oral argument. Nor did Lee file a brief that contested the referee’s findings and recommendation, despite getting additional time to file from the court.

The referee found no mitigating factors, and recommended disbarment. The court agreed. It disbarred Lee from the practice of law in Minnesota effective Feb. 28.

 

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