Attorney Grievance Commission v. Seltzer

BATTAGLIA, J. Aaron G. Seltzer, Respondent, was admitted to the Bar of this Court on December 12, 2001. 1 On December 9, 2010, the Attorney Grievance Commission (“Petitioner” or “Bar Counsel”), acting pursuant to Maryland Rule 16-751(a), 2 filed a “Petition for Disciplinary or Remedial Action” against Seltzer, which incorporated two complaints, one by a real estate agent, Debbie Jenkins, and the other by June Carolyn Piper-Brandon, a partner of Seltzer’s realty company, Advance Realty Anne Arundel Inc. With respect to Ms. Jenkins’s complaint, Bar Counsel alleged that Respondent violated various Maryland Rules of Professional Conduct under Maryland Rule 16-813, including Rule 8.4(a), (b), (c), and (d) (Misconduct), 3 for ⁹⁸ engaging in deceitful acts and misrepresentations in connection-with Seltzer’s attempted purchase of commercial real estate in Baltimore, Maryland, as well as Rule 8.1(b) (Bar Admission and Disciplinary Matters) 4 for failing to cooperate with Bar Counsel in the course of its investigation of the complaints, failing to appear for a Statement Under Oath 5 for which he was duly subpoenaed, and failing to provide Bar Counsel with documents requested by subpoena. Bar Counsel alleged with respect to Ms. Piper-Brandon’s complaint that Seltzer again violated Rule 8.4(a), (b), (c) and (d) for converting funds in his realty company’s operating account for his own use and misappropriating funds in his realty company’s escrow account and Rule 8.1(b) for failing to respond to a ⁹⁹ request for information by Bar Counsel. In an Order dated December 10, 2010, this Court referred the matter to Judge Paul M. Bowman of the Circuit Court for Kent County for hearing, pursuant to Rule 16-757. 6 Seltzer was served, through the Client Protection Fund, 7 with the Petition for Disciplinary or Remedial Action, as well as the Court of Appeals’s Order, Writ of Summons, Interrogatories, Request for Production of Documents, and Request for Admission of Facts and Genuineness of Documents. Seltzer ¹⁰⁰ did not file an Answer or any other response.

An Order of Default was subsequently entered about which notice was sent to Seltzer at his last known address. The order permitted Respondent 30 days within which to move to vacate the order; no motion to vacate was filed. The case proceeded on the Requests for Admissions of Facts and Documents, which were deemed admitted by Judge Bowman because Seltzer failed to respond. Judge Bowman subsequently issued his Findings of Fact and Conclusions of Law memorandum; he addressed Ms. Jenkins’s complaint and found that beginning in 2008, Seltzer was simultaneously a partner of four different companies, Village Green, Death Star, Advance Realty, and First Class.

In 2008, Seltzer submitted a contract to purchase real property on behalf of a fifth company, Allied Baltimore Development Group, LLC, to Ms. Jenkins, an agent for the seller of several commercial properties in Baltimore. One of the contract provisions was that Allied’s deposit would be held by Village Green. At no time, however, did Seltzer explain nor did Ms. Jenkins or her seller understand that Seltzer executed the contract on behalf of Allied or that he was affiliated with Village Green, or any of the other companies, Death Star, Advance Realty or First Class. Pursuant to the contract of sale, Seltzer was to provide Village Green with a check representing a deposit which was drawn on Death Star’s bank account.

The check was returned for insufficient funds. After Seltzer repeatedly assured Ms. Jenkins that he would pay the deposit but failed to do so, the sale did not go through. In October/November 2008, Respondent was the managing member of Village Green Title, LLC, (hereinafter “Village Green”) which was located at 1662 Village Green, Crofton, Maryland. During that same time period, Respondent was also the managing member of Death Star, LLC (hereinafter “Death Star”) which was located at 5468 Wellington Drive, Trappe, Maryland 21673.

The Trappe address for Death Star was Respondent’s residence at that time. During that same time period, Respondent was a 49% partner in Advance Realty Anne Arundel Incorporated ¹⁰¹ (hereinafter “Advanced Realty”) which was located at 5 Crain Highway, N., Glen Burnie, Maryland 21061. Respondent was also the managing member of First Class Real Estate, LLC, (hereinafter “First Class”) which was located at 1662 Village Green, Crofton, Maryland, 21114, the same address as Village Green. In October of 2008, Respondent submitted a contract on behalf of Allied Baltimore Development Group, LLC, (hereinafter “Allied”), to Biddison Lane, LLC (hereinafter “Seller”) to purchase commercial real estate located at 4004, 4006, 4008, 4010 and 4012 Biddison Lane, in Baltimore, Maryland (hereinafter “Biddison Lane”).

(Petitioner’s Exhibit Bl). Unbeknownst to the Seller, Respondent executed the contract of sale on behalf of Allied. The contract price for Biddison Lane was $1,540,000.00 and required Allied to provide an earnest money deposit of $15,000.00 to be held by Village Green. Both the Seller and the Seller’s Agent, Debbie Jenkins, (hereinafter “Jenkins”) were never advised that Respondent was the managing member of Village Green, Death Star or a partner in Advanced Realty.

On or about November 8, 2008, Respondent wrote check number 1076 in the amount of $15,000.00 payable to Village Green on the account of Death Star. (Petitioner’s Exhibit B-2). That check represented the earnest money deposit for Biddison Lane pursuant to the contract of sale. Death Star’s check number 1076, written in the amount of $15,000.00 was never negotiated.

(Petitioner’s Exhibit B-28). Further, Death Star did not have $15,000.00 in its account at the time Respondent wrote check number 1076. (Petitioner’s Exhibit B-28). Respondent misled Jenkins into believing that he had deposited Death Star’s check number 1076 into Village Green’s escrow account.

Although Jenkins attempted to get verification from the Respondent that the $15,000.00 earnest money deposit for Biddison Lane was negotiated and held in Village Green’s escrow account, she could never obtain that verification from the Respondent. By e-mail dated November 10, 2008, Respondent advised Jenkins that he would provide her with the ¹⁰² $15,000.00 check the following day. (Petitioner’s Exhibit B-3). Respondent did not provide Jenkins or the Seller with the $15,000.00 check pursuant to the contract of sale.

By letter dated December 12, 2008, Respondent executed an “Addendum/Amendment” to the contract of sale between Allied and the Seller. (Petitioner’s Exhibit B-4). Respondent had still not provided Jenkins or Seller with proof that the good faith deposit owed pursuant to the original contract of sale was being held by Village Green. On or about March 18, 2009, Respondent submitted a second “Addendum/Amendment” to the Contract of Sale to Jenkins and the seller.

Pursuant to the second “Addendum/Amendment,” Respondent agreed to provide valid verifiable proof of financing or proof of cash to the Seller within 48 hours and to increase the deposit by an additional $50,000.00 for a total of $65,000.00 to be held by Village Green. (Petitioner’s Exhibit B-5). Respondent further agreed to make the deposit non-refundable. Respondent never deposited any money into Village Green’s escrow account pursuant to the second “Addendum/Amendment.” On April 15, 2009, Respondent executed a third “Addendum to Contract.” Pursuant to the third “Addendum to Contract,” Respondent agreed, on behalf of Allied to place an additional $25,000 in escrow for a total of $40,000.00 to be held by Village Green.

(Petitioner’s Exhibit B-6). Respondent never deposited any money on behalf of Allied into Village Green’s escrow account for the good faith deposit of Biddison Lane. The sale of Biddison Lane never occurred between the Seller and Allied. When the sale between Allied and Ms. Jenkins’s client did not go through, Seltzer returned to Ms. Jenkins with what purported to be a new buyer, this time seeking to purchase the property, at a lower price, in the name of First Class company.

Like before, Seltzer gave Ms. Jenkins a check as a deposit, drawn on the Death Star’s account, which was returned for insufficient funds. Seltzer never explained his role as the managing member of First Class. ¹⁰³ In June of 2009, Respondent presented a “Contract of Sale” dated June 18, (sic) 2008, to the Seller on behalf of First Class to purchase Biddison Lane for $1,200,000.00. (Petitioner’s Exhibit B-7). Respondent executed that “Contract of Sale” on behalf of First Class in June of 2009.

Pursuant to that “Contract of Sale,” it was agreed that a non-refundable deposit of $50,000.00 would be held by the Seller. The address for First Class is the same address as Village Green. Respondent never advised the Seller or Jenkins that he was a managing member of First Class. Respondent gave Jenkins check number 2013, dated July 4, 2009, written on the account of Death Star in the amount of $50,000.00.

(Petitioner’s Exhibit B-8). That check was returned for insufficient funds. (Petitioner’s Exhibit B-27). After that check was returned for insufficient funds, Respondent sent Jenkins a June 24, 2009 e-mail to mislead her into believing monies would be transferred into Death Star’s account so that check number 2013 would clear the bank.

(Petitioner’s Exhibit B-ll). There was never a $50,000.00 transfer or deposit into Death Star’s account. (Petitioner’s Exhibit B-27). The Seller was never able to negotiate Death Star’s $50,000.00 check which was the non-refundable deposit for Biddison Lane because Respondent never had $50,000.00 in the Death Star account.

(Petitioner’s Exhibit B-22). To induce Ms. Jenkins’s client to sell the commercial properties, Seltzer provided three fraudulent documents, attesting to First Class’s financial condition and ability to purchase the properties. These documents included: a letter from Oppenheimer and Company, Inc., ostensibly authored by an Oppenheimer employee, which later was found to be false; a bank statement from Chase Investment Services Group, discussing an alleged Seltzer Family Trust account that, in fact, did not exist at Chase; and an e-mail from Chase discussing this Trust, ostensibly written by a person later found not to be affiliated with Chase. Respondent provided several fraudulent documents to Jenkins.

Respondent provided Jenkins with a letter date ¹⁰⁴ June 26, 2009, ostensibly from Oppenheimer and Company, Incorporated (hereinafter “Oppenheimer”). (Petitioner’s Exhibit B-9). That letter is fraudulent because Marc C. Hotten, whose name appears as the author, was not an employee of Oppenheimer on June 26, 2009. Further, Respondent created that June 26, 2009, letter to induce the Seller to enter into the contract submitted by First Class because it stated that there was over $3,000,000.00 unencumbered funds on deposit with Oppenheimer.

Respondent also provided Jenkins with a Chase Investment Services Group (hereinafter “Chase”) statement which was fraudulent. (Petitioner’s Exhibit B-10). Respondent provided the Chase statement to induce the Seller to enter into the June 26, 2009, contract because it stated that there was $292,414.66 in the “Seltzer Family Trust.” That statement was fraudulent because Chase does not maintain account(s) titled “Seltzer Family Trust.” That statement was given to the Seller and Jenkins to demonstrate that there were funds available to purchase Biddison Lane. By e-mail dated June 24, 2009, Respondent provided Jenkins with a fraudulent email from his broker, Robert E. Miller, an alleged employee of Chase.

(Petitioner’s Exhibit B-ll). That e-mail was fraudulent because Chase does not have an employee named Robert Miller and does not maintain any accounts titled “Seltzer Family Trust.” (Petitioner’s Exhibit B-12). Once Ms. Jenkins’s complaint was filed, Seltzer repeatedly evaded Bar Counsel’s multiple requests for information, including failing to respond to four subpoenas for documents and to appear for a Statement Under Oath. By letter dated January 20, 2010, the Office of Bar Counsel’s Investigator, William M. Ramsey, requested documents from the Respondent concerning the attempted purchase of Biddison Lane.

(Petitioners Exhibit B-13). Although the Respondent received the January 20, 2010, letter, he never provided the Office of Bar Counsel the documents requested. (Petitioner’s Exhibit B-14). Mr. Ramsey mailed a second letter to the Respondent dated February 22, 2010.

(Petitioner’s Exhibit B-15). Although ¹⁰⁵ the Respondent received Mr. Ramsey’s February 22, 2010 letter, he did not respond to Mr. Ramsey nor did he schedule a meeting to be interviewed by Mr. Ramsey. (Petitioner’s Exhibit R-14). On March 30, 2010, Mr. Ramsey served four (4) Bar Counsel subpoenas on the Respondent.

(Petitioner’s Exhibits B17, 18, 19 and 20). Those subpoenas requested the Respondent to produce his documents on the Chase account titled “Seltzer Family Trust,” the BB & T account number 515-39-07449, titled “Death Star, LLC,” the BB & T account number 515-58-53176, titled “Death Star, LLC” and to appear for a Statement Under Oath and produce documents. The Respondent’s Statement Under Oath was to be held on April 6, 2010 at the Office of Bar Counsel. At the Respondent’s request, his Statement Under Oath schedule for April 6, 2010 was rescheduled to Thursday, April 22, 2010.

(Petitioner’s Exhibit B-21). Thereafter, the Respondent requested and the Office of Bar Counsel agreed to reschedule the Statement Under Oath to April 26, 2010. (Petitioner’s Exhibit B-22). Respondent failed to appear for the April 26, 2010, Statement Under Oath and failed to produce any documents requested in the four (4) subpoenas.

(Petitioner’s Exhibit B-25). On April 27, 2010, the Respondent sent an e-mail to the Office of Bar Counsel advising that he was in the hospital and inquiring whether the Office of Bar Counsel was still willing to take his Statement Under Oath. (Petitioner’s Exhibit B-23). In response, the Office of Bar Counsel advised the Respondent, that if he was going to cooperate then he would have to immediately send the documents requested in the subpoenas.

(Petitioner’s Exhibit B-24). Although Respondent agreed to send the documents requested to the Office of Bar Counsel, he never did. (Petitioner’s Exhibit B-24). Judge Bowman concluded that Seltzer’s failure to disclose his role as managing member of First Class during negotiations for the second contract, paired with the bad Death Star checks, fraudulent documents and his multiple failures to ¹⁰⁶ respond to Bar Counsel’s requests for information, established, by clear and convincing evidence, that Seltzer had engaged in a pattern of deceit that indeed violated Rules 8.4(a), (b), (c) and (d) and 8.1(b).

By his conduct, the Respondent violated all of the rules of professional conduct charged by Petitioner in the Petition for Disciplinary or Remedial Action. Respondent’s misrepresentations and deceit perpetrated on the Seller and their agent, Jenkins, began in October of 2008 and continued through July of 2009. Respondent never disclosed to the Seller or Jenkins that he was the managing member of Village Green and Death Star and a partner in Advanced Realty. Respondent never made the good-faith deposit required pursuant to the first contract.

Respondent never had $15,000.00 in his Death Star bank account to make the food-faith deposit. Thereafter, Respondent entered into three (3) “Addendums/Amendments” to contract of sale with the Seller and agreed to a non-refundable deposit, which he never provided. Respondent never disclosed to the Seller or Jenkins that he was the managing member of Death Star, Village Green, First Class or a partner in Advanced Realty when he entered into the second contract to purchase Biddison Lane. Although Respondent provided a $50,000.00 check written on the account of Death Star to the Seller, that check was never negotiable because the Respondent never had $50,000.00 in the account.

Further, the Respondent created three (3) fraudulent documents to induce the Seller to enter into the second contract of sale with First Class. The Respondent created the Oppenheimer letter, the Chase Statement and the e-mail purportedly from Chase to induce the Seller to enter into the contract with First Class. The Respondent’s continuing course of deceit and misrepresentations for nine (9) months violated Rule 8.4(a), (b) and (c). Respondent’s continuing course of deceit for nine (9) months was prejudicial to the administration of justice in violation of 8.4(d).

Further, Respondent violated Rule 8.1 by his willful failure to be interviewed by Bar Counsel’s investigator, Mr. ¹⁰⁷ Ramsey and to produce any documents requested by Mr. Ramsey. The Respondent ignored Mr. Ramsey’s letters of January 20, 2010 and February 22, 2010. Thereafter, the Respondent willfully ignored four (4) subpoenas duly served upon him. Not only did the Respondent fail to produce the documents requested in the four (4) subpoenas, he also failed to appear for a Statement Under Oath.

The Respondent avoided the Office of Bar Counsel throughout the investigation and rescheduled his Statement Under Oath from April 6th to April 22nd and then to April 26, 2010. Thereafter, the Respondent failed to appear for the Statement Under Oath on April 26, 2010. Respondent sent an email to the Office of Bar Counsel the following day in an attempt to appear as if he was cooperating, however, never produced any documents or rescheduled his Statement Under Oath. The Respondent’s willful refusal to be interviewed by Bar Counsel, produce documents to Bar Counsel and to comply with the four (4) subpoenas duly served upon him violates 8.1(b).

Respondent’s misrepresentations, deceit and fraudulent letters violated Rule 8.4(d), conduct prejudicial to the administration of justice. With regard to the second complaint, that of Ms. Piper-Brandon, Judge Bowman found that Seltzer, Ms. Piper-Brandon’s Advanced Realty Anne Arundel, Inc. co-owner, used his signatory authority to withdraw from Advanced Realty’s operating account at least $2,300, to which he was not entitled, and to transfer, without authorization, $5,500 from Advanced Realty’s escrow account. Petitioner alleges that Respondent violated Maryland Rules of Professional Conduct 8.1(b) and 8.4(a), (b), (c), and (d), by converting funds to his own use without entitlement from Advanced Realty Anne Arundel Incorporated’s (hereinafter “Advanced Realty”) operating account, for misappropriating funds from Advanced Realty’s escrow account and for failing to respond to request for information from the Office of Bar Counsel. In February of 2010, June Caroline Piper-Brandon, (hereinafter “Piper-Brandon”), owned 51% of Advanced Re ¹⁰⁸ alty and the Respondent owned 41%.

Both Piper-Brandon and Respondent had signatory authority on Advanced Realty’s operating and escrow accounts. On February 18, 2010, Respondent withdrew $1,300.00 from Advanced Realty’s operating account maintained at Suntrust Bank. (Petitioner’s Exhibit B-35). Respondent did not have any entitlement to the $1,300.00 he withdrew from Advanced Realty’s operating account on February 18, 2010.

(Petitioner’s Exhibit B-35). On February 19, 2010, Respondent withdrew $800.00 from Advanced Realty’s operating account for his own use without entitlement. (Petitioner’s Exhibit B-35). Thereafter, on February 23, 2010 and February 26, 2010, Respondent withdrew $1,000.00 on each date from Advanced Realty’s operating account for his own use without entitlement.

(Petitioner’s Exhibit B-35). Respondent has never repaid the $2,300.00 he took without entitlement to Advanced Realty. On February 23, 2010, Respondent transferred $4,000.00 from Advanced Realty’s escrow account maintained at Sun-trust Bank. (Petitioner’s Exhibit B-33).

Respondent had no entitlement to the $4,000.00 transferred from Advanced Realty’s escrow account. Further, the $4,000.00 transferred from Advanced Realty’s escrow account were funds belonging to Advanced Realty’s clients. On March 2, 2010, Respondent withdrew $1,500.00 from Advanced Realty’s escrow account for his own use. Respondent had no entitlement to the $1,500.00 he withdrew on March 2, 2010.

Further those funds belonged to Advanced Realty’s clients. In addition, Seltzer withdrew or transferred $9,156 from Advanced Realty’s escrow account to two individuals who were not clients of Advanced Realty and not entitled to the money. Thereafter, Seltzer attempted, but failed, to make a subsequent corresponding deposit of $9,156 by writing a bad check from his Death Star account, in which he never had the requisite money. On March 8, 2010, the Respondent wired $9,156.00 from Advanced Realty’s escrow account to JP Morgan Chase, ¹⁰⁹ made payable to Hymowitz and Freeman.

(Petitioner’s Exhibit B-33 and 37). Hymowitz and Freeman are not clients of Advanced Realty. There was no corresponding deposit into Advanced Realty’s escrow account prior to the Respondent’s write transfer of $9,156.00 on March 8, 2010. On March 9, 2010, Respondent deposited Death Star’s check number 2125 in the amount of $9,156.00 into Advanced Realty’s escrow account, however, that deposit was returned on March 12, 2010, due to insufficient funds in the Death Star account.

(Petitioner’s Exhibits 27 and 33). On March 15, 2010, Respondent deposited Death Star’s check number 2133 in the amount of $7,000.00 into Advanced Realty’s escrow account. However, that deposit was returned on March 18, 2010, due to insufficient funds in the Death Star account. (Petitioner’s Exhibit B-27 and 33).

Respondent never had the funds in Death Star’s account to issue those two checks. (Petitioner’s Exhibit B-27). The Respondent had no entitlement to the $9,156.00 that he transferred from Advanced Realty’s escrow account and wired to Hymowitz and Freeman. Further, Hymowitz and Freeman had no entitlement to the $9,156.00 that they received from Advanced Realty’s escrow account.

The Respondent used funds belonging to Advanced Realty’s clients when he transferred $9,156.00 from Advanced Realty’s escrow account. Respondent never repaid the funds he wired from Advanced Realty’s escrow account, the fees associated with that wire transfer and the returned deposit fees associated with the two non-negotiable Death Star checks. Again, when Bar Counsel contacted Seltzer regarding his unauthorized withdrawals from Advanced Realty’s operating and escrow accounts, Seltzer never responded to the complaint. The Office of Bar