Celebrates 40 years of client
The Clients' Security Board (CSB) of the Supreme Judicial Court
(SJC) of Massachusetts awarded a record $2.9 million to reimburse
clients who were defrauded by their attorneys in fiscal year
By comparison, the $2.9 million awarded in 2015 is more than
double the $1.3 million awarded in fiscal year 2014, according to
the CSB's "Annual Report to the Supreme Judicial Court for Fiscal
Year 2015." This year's report marks the 40th anniversary of the
CSB, which was established by an order of the SJC in 1974, seven
years before the American Bar Association House of Delegates
approved the Model Rules for Clients' Security Funds.
"In simple terms, the overall mission of the Clients' Security
Board is to reimburse clients whose lawyers have misappropriated
their money," said Karen D. O'Toole, assistant board counsel at the
The record amount awarded this year came in the form of 61
awards, whereas 114 awards were made in fiscal year 2014, the
second highest number of awards ever given. Last year a total of
121 claims were filed with the CSB, whereas 2015 saw only 59 claims
filed. Based on the timing of when the claims are filed, the
overall numbers in the report can be unpredictable from year to
Taking a macro view, only 22 attorneys or .04 percent of more
than 59,000 lawyers in the state defrauded their clients of the
$2.9 million the CSB reimbursed in fiscal year 2015. Two attorneys,
Peter J. Unitt III ($970,980.38) and Arthur J. McCabe II
($959,937), accounted for defalcations totaling nearly $2 million,
or 66 percent of the total money awarded. The top five offending
attorneys combined for $2.6 million or 89 percent of the overall
total. In addition to Unitt and McCabe, Mark E. Cassidy
($438,098.21), Robert H. Monheimer ($127,947.07) and Reinaldo
Gonzalez ($104,619.20) were responsible for that amount.
"It is a very small percentage of lawyers who are
misappropriating their clients' money, but if it happens to you it
doesn't feel so small," acknowledged O'Toole.
One consistency from year to year is that the category of trusts
and estates tends to be the top category for lawyer defalcations.
This year more than $1.72 million or 59 percent of the $2.9 million
total was misappropriated by lawyers in this area. The investments
category was second, with a total of $707,472.19 awarded.
Attorneys have to be suspended or disbarred by the Office of Bar
Counsel, a division of the Board of Bar Overseers (BBO), before the
CSB can take action on claims. The seven members of the CSB board
are all lawyers from across the commonwealth that are appointed by
the SJC for five-year terms.
Massachusetts is unique from other states in that the CSB
reimburses 100 percent of the actual client loss and there is no
statute of limitations pertaining to the claims. Most states have a
cap on the amount that can be reimbursed either per lawyer or per
loss. Attorneys in Massachusetts pay for the fund through their
annual BBO registration fee.
"We take client protection very seriously in Massachusetts and
we're fortunate to have a system of checks and balances which
allows the Clients' Security Board to reimburse misappropriated
client funds in full," said MBA Chief Legal Counsel and Chief
Operating Officer Martin W. Healy. "The overwhelming majority of
attorneys in our state treat their clients fairly but it's
important to have a process in place to safeguard the public when a
rare instance of fraud occurs."
"From the standpoint of an attorney who practices in
Massachusetts, it's reassuring to know that we clean up the messes
that are less than honorable so that people are compensated in
full," added D. Ethan Jeffery, CSB chair.