There weeks ago, America First Legal (AFL) filed a formal bar complaint with the New York State Grievance Committee against Attorney General Letitia James.
In New York state, attorneys are held to stringent ethical standards. Violations, especially those involving dishonesty or fraud, can lead to severe disciplinary consequences, including disbarment and criminal prosecution.
Historically, New York has disbarred attorneys who engage in mortgage fraud and related misconduct. This precedent does not bode well for Letitia James.
Examples of New York attorneys who have been disbarred due to their involvement in mortgage fraud include Akintayo Abimbola Ayorinde, a Brooklyn attorney who was disbarred after pleading guilty to conspiracy to commit wire and bank fraud in a mortgage fraud scheme that resulted in over $10 million in fraudulent loans.
Ayorinde was one of three attorneys indicted in the scheme, which charged a total of 10 individuals.
George Guldi, a former Suffolk County legislator and attorney, was disbarred and convicted of defrauding Ditech Financial LLC out of more than $250,000.
While serving a prison sentence for unrelated charges, Guldi, along with co-conspirator Victoria Davidson, orchestrated a scheme to defraud the mortgage lender. Both were convicted of conspiracy to commit wire and bank fraud, wire fraud, and bank fraud.
Thomas Cusack III, an attorney in Williston Park, New York, was disbarred for his failure to prevent a $98 million mortgage fraud scheme.
As in-house counsel for a developer, Cusack failed to perform standard lender’s attorney functions, which allowed the fraudulent scheme to proceed.
Although there was no evidence that Cusack knew of the criminal activity, his negligence in fulfilling his duties led to his disbarment.
America First Legal’s bar complaint alleges that Letitia James committed multiple acts of mortgage fraud and knowingly made false representations in official filings, conduct that AFL argues violates the New York Rules of Professional Conduct.
The complaint echoes the one sent by the US FHFA to Attorney General Pam Bondi, and focuses on two main allegations.
First, AFL contends that James fraudulently claimed a property in Norfolk, Virginia, as her “principal residence” on legal documents related to a power of attorney she executed to purchase a home.
At the time, she was legally domiciled in Brooklyn, New York. AFL asserts that this false representation enabled James to qualify for a mortgage under false pretenses and receive more favorable loan terms.
The second allegation centers on a government-backed HAMP loan (Home Affordable Modification Program) application James made in 2011.
AFL claims that James misrepresented the number of legal units in her Brooklyn apartment building, stating it had fewer units than it actually did to qualify for a reduced interest rate loan under the HAMP program.
The application was ultimately approved, and James obtained a favorable 2.7% interest rate with the government loan.
My visit to James’s apartment building in Brooklyn confirmed her apartment building had 4 floors and five apartment units, matching the official Certificate of Occupancy, and not the 3 floors and four units she had claimed in legal documents.
The AFL complaint cites multiple rule violations by James under the New York Rules of Professional Conduct, most notably Rule 8.4(b) and (c), which prohibit attorneys from engaging in illegal conduct and acts involving dishonesty, fraud, deceit, or misrepresentation.
Also, James is cited for Rule 1.6, related to confidentiality, and Rule 3.3, concerning a lawyer’s duty of candor to tribunals, in connection with her public filings and legal statements.
According to AFL, Letitia James’s acts constitute professional misconduct and merit disciplinary proceedings that could lead to suspension or disbarment. The organization stressed the imperative of holding public officials, particularly the state’s chief legal officer, to the highest ethical standards.
“The legal profession requires unimpeachable honesty,” AFL said in its public statement. “If the allegations are true, Ms. James not only defrauded financial institutions but also violated the public trust and the very rules she is sworn to enforce.”
Nick Barry, America First Legal Senior Counsel stated, “If the Director’s allegations are accurate, Ms. James should resign her office immediately, the people of New York deserve an Attorney General who upholds the highest ethical standards of the legal profession.”
In the ultimate twist of legal irony, the same Letitia James who built her career storming courtrooms to preach about “accountability” and that “no one is above the law” may now find herself on the receiving end of discipline and disbarment.
The New York State Grievance Committee is expected to review the AFL complaint and determine whether a formal investigation should proceed.
If the Committee finds probable cause, it could lead to disciplinary proceedings before the Appellate Division of the New York Supreme Court and to James’s ultimate disbarment, mimicking the punishments doled out in recent cases.
Joel Gilbert, is a Los Angeles-based film producer, and president of Highway 61 Entertainment. He is on Twitter: @JoelSGilbert.
Read the full complaint from AFL:
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