Case Number(s): 12-O-14855
In the Matter of: Anthony N. Luti Bar #207852 a Member of the State Bar of California, (Respondent).
Counsel for the State Bar: Meredith A. Kittrick 1149 South Hill Street
Los Angeles, CA 90015
(213) 765-1204
Bar #234484
Counsel for Respondent: Vicken Sonentz Papazian 517 E. Wilson Ave. Ste. 101
Glendale, CA 91206
(818) 956-7577
Bar #153165
Submitted to: Settlement Judge, State Bar Court Clerk’s Office Los Angeles
<<not>> checked. PREVIOUS STIPULATION REJECTED
Note: All information required by this form and any additional information which cannot be provided in the space provided, must be set forth in an attachment to this stipulation under specific headings, e.g., "Facts," "Dismissals," "Conclusions of Law," "Supporting Authority," etc.
1. Respondent is a member of the State Bar of California, admitted June 19, 2000.
2. The parties agree to be bound by the factual stipulations contained herein even if conclusions of law or disposition are rejected or changed by the Supreme Court.
3. All investigations or proceedings listed by case number in the caption of this stipulation are entirely resolved by this stipulation and are deemed consolidated. Dismissed charge(s)/count(s) are listed under "Dismissals." The stipulation consists of 14 pages, not including the order.
4. A statement of acts or omissions acknowledged by Respondent as cause or causes for discipline is included under "Facts."
5. Conclusions of law, drawn from and specifically referring to the facts are also included under "Conclusions of Law".
6. The parties must include supporting authority for the recommended level of discipline under the heading "Supporting Authority."
7. No more than 30 days prior to the filing of this stipulation, Respondent has been advised in writing of any pending investigation/proceeding not resolved by this stipulation, except for criminal investigations.
8. Payment of Disciplinary Costs-Respondent acknowledges the provisions of Bus. & Prof. Code §§6086.10 & 6140.7. (Check one option only):
<<not>> checked. Until costs are paid in full, Respondent will remain actually suspended from the practice of law unless relief is obtained per rule 5.130, Rules of Procedure.
checked Costs are to be paid in equal amounts prior to February 1 for the following membership years: two (2) billing cycles following the effective date of the Supreme Court order. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
<<not>> checked. Costs are waived in part as set forth in a separate attachment entitled "Partial Waiver of Costs".
<<not>> checked. Costs are entirely waived.
Case Number(s): 12-O-14844
In the Matter of: Anthony N. Luti
a. Restitution
<<not>> checked. Respondent must pay restitution (including the principal amount, plus interest of 10% per annum) to the payee(s) listed below. If the Client Security Fund (“CSF”) has reimbursed one or more of the payee(s) for all or any portion of the principal amount(s) listed below, Respondent must also pay restitution to CSF in the amount(s) paid, plus applicable interest and costs.
1. Payee:
Principal Amount:
Interest Accrues From:
2. Payee:
Principal Amount:
Interest Accrues From:
3. Payee:
Principal Amount:
Interest Accrues From:
4. Payee:
Principal Amount:
Interest Accrues From:
<<not>> checked. Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than .
<<not>> checked. Respondent must pay the above-referenced restitution on the payment schedule set forth below. Respondent must provide satisfactory proof of payment to the Office of Probation with each quarterly probation report, or as otherwise directed by the Office of Probation. No later than 30 days prior to the expiration of the period of probation (or period of reproval), Respondent must make any necessary final payment(s) in order to complete the payment of restitution, including interest, in full.
1. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
2. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
3. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
4. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
<<not>> checked. If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
<<not>> checked.
1. If Respondent possesses client funds at any time during the period covered by a required quarterly report, Respondent must file with each required report a certificate from Respondent and/or a certified public accountant or other financial professional approved by the Office of Probation, certifying that:
a. Respondent has maintained a bank account in a bank authorized to do business in the State of California, at a branch located within the State of California, and that such account is designated as a “Trust Account” or “Clients’ Funds Account”;
b. Respondent has kept and maintained the following:
i. A written ledger for each client on whose behalf funds are held that sets forth:
1. the name of such client;
2. the date, amount and source of all funds received on behalf of such client;
3. the date, amount, payee and purpose of each disbursement made on behalf of such client; and,
4. the current balance for such client.
ii. a written journal for each client trust fund account that sets forth:
1. the name of such account;
2. the date, amount and client affected by each debit and credit; and,
3. the current balance in such account.
iii. all bank statements and cancelled checks for each client trust account; and,
iv. each monthly reconciliation (balancing) of (i), (ii), and (iii), above, and if there are any differences between the monthly total balances reflected in (i), (ii), and (iii), above, the reasons for the differences.
c. Respondent has maintained a written journal of securities or other properties held for clients that specifies:
i. each item of security and property held;
ii. the person on whose behalf the security or property is held;
iii. the date of receipt of the security or property;
iv. the date of distribution of the security or property; and,
v. the person to whom the security or property was distributed.
2. If Respondent does not possess any client funds, property or securities during the entire period covered by a report, Respondent must so state under penalty of perjury in the report filed with the Office of Probation for that reporting period. In this circumstance, Respondent need not file the accountant’s certificate described above.
3. The requirements of this condition are in addition to those set forth in rule 4-100, Rules of Professional Conduct.
checked. Within one (1) year of the effective date of the discipline herein, Respondent must supply to the Office of Probation satisfactory proof of attendance at a session of the Ethics School Client Trust Accounting School, within the same period of time, and passage of the test given at the end of that session.
IN THE MATTER OF: Anthony N. Luti
CASE NUMBER(S): 12-O-14855
FACTS AND CONCLUSIONS OF LAW
Respondent admits that the following facts are tree and that he is culpable of violations of the specified statutes and/or Rules of Professional Conduct.
Case No. 12-0-14855 (State Bar Investigation)
FACTS:
1. At all time relevant herein, Respondent maintained a client trust account at Bank of America designated account number -’20921 The full client trust account number has been omitted due to privacy concerns. ("Respondent’s CTA").
2. Between January 2012 and August 2012, Respondent did not promptly remove funds which he had earned as fees from Respondent’s CTA as soon as his interest in those funds became fixed. Instead Respondent left his fees in Respondent’s CTA for the payment of his personal and business expenses as needed.
3. Between January 2012 and August 2012, Respondent repeatedly issued checks drawn upon Respondent’s CTA to pay his personal and business expenses, including, but not limited to, the following:
Check Number 1367, Check Issued 02/07/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid 2/14/12
Check Number 1377, Check Issued 03/04/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid 3/8/12
Check Number 1385, Check Issued 03/28/12, Payee Advanced Records Mnmt., Check Amount 400.00, Date Paid4/2/12
Check Number 1387, Check Issued 04/02/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid4/4/12
Check Number 1392, Check Issued 05/03/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid 5/7/12
Check Number 1395, Check Issued 05/06/12, Payee Los Feliz Comers, Check Amount 1,000.00, Date Paid 5/10/12
Check Number 1393, Check Issued 05/09/12, Payee Los Angeles Clippers, Check Amount 450,00, Date Paid Not paid
Check Number 1401, Check Issued 06/05/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid 6/6/12
Check Number 1403, Check Issued 06/11/12, Payee Dunbar Bradley, Check Amount 1,000.00, Date Paid 6/11/12
Check Number 1406, Check Issued 06/20/12, Payee Advanced Records Mnmt, Check Amount 560.00, Date Paid 6/26/12
Check Number 1408, Check Issued 06/26/12, Payee Valley Euro Auto Service, Check Amount 5,545.60, Date Paid 6/27/12
Check Number 1411, Check Issued 07/03/12, Payee Natalya Koroleva, Check Amount 2,200.00, Date Paid 7/6/12
Check Number 1418, Check Issued 07/15/12, Payee Dunbar Bradley, Check Amount 15,000.00, Date Paid 7/16/i 2
Check Number 1417, Check Issued 07/13/12, Payee Los Angeles Clippers, Check Amount 2,200.00, Date Paid 7/19/12
Check Number 1421, Check Issued 07/24/12, Payee Advanced Records, Check Amount 196.75, Date Paid 7/31/12
Check Number 1423, Check Issued 08/01/12, Payee Natalya, Check Amount 2,200,00 Date Paid 8/2/12
4. During the period between January of 2012 and August of 2012, Respondent repeatedly made withdrawals from Respondent’s CTA to pay his personal and business expenses, including, but not limited to, the following:
Withdrawal Date 05/04/12, Stated Purpose of Withdrawal Land rover Discovery, Withdrawal Amount 8,810.00
Withdrawal Date 05/07/12, Stated Purpose of Withdrawal Boxster, Withdrawal Amount 2,000.00
5. During the period between January 2012 and August 2012, Respondent repeatedly made electronic payments from Respondent’s CTA to pay his personal and business expenses, including, but not limited to, the following:
Date Posted 1/6/12, Description T-Mobile, Amount 136.84
Date Posted 2/6/12, Description T-Mobile, Amount 161.89
Date Posted 2/7/12, Description Att, Amount 124.08
Date Posted 2/7/12, Description Art, Amount 127.94
Date Posted 3/5/12, Description T-Mobile, Amount 193.66
Date Posted 4/3/12, Description T-Mobile, Amount 191.25
Date Posted 5/16/12, Description T-Mobile, Amount 168.18
Date Posted 5/18/12, Description Att, Amount 122.35
Date Posted 5/18/12, Description Att, Amount 114.14
Date Posted 6/13/12, Description T-Mobile, Amount 163.98
Date Posted 6/22/12, Description Fpb Cr Card, Amount 425.51
Date Posted 6/25/12, Description Hsbc Card Svcs, Amount 405.06
Date Posted 7/12/12, Description Ladwp, Amount 383.86
Date Posted 7/16/12, Description T-Mobile, Amount 172.77
Date Posted 8/13/12, Description T-Mobile, Amount 194.44
6. In November 2010, Respondent was made aware of fraudulent debits by an unauthorized person from Respondent’s CTA.
7. The fraudulent debits from Respondent’s CTA continued intermittently from November 2010 through January 2012.
8. From January 2012 to August 2012, Respondent continued to deposit client funds into Respondent’s CTA.
CONCLUSIONS OF LAW:
9. By failing to promptly remove earned fees from his CTA and writing checks, making withdrawals, and causing electronic withdrawals from his CTA for personal and business expenses, Respondent deposited or commingled funds belonging to Respondent in a bank account labelled "Trust Account," "Client’s Funds Account" or words of similar import in willful violation of Rules of Professional Conduct, rule 4-100(A).
10. By continuing to deposit client funds into his CTA with knowledge that the CTA was subject to fraudulent debits by an unauthorized person Respondent breached his common law fiduciary duty to his clients, and thereby failed to support the Constitution and laws of the United States and of this state in willful violation of Business and Professions Code section 6068(a).
11. By continuing to deposit client funds into Respondent’s CTA with knowledge that the CTA was subject to fraudulent debits by an unauthorized person, Respondent was grossly negligent in the handling of his client’s funds, thus Respondent committed an act involving moral turpitude, dishonesty or corruption in willful violation of Business and Professions Code section 6106.
ADDITIONAL FACTS RE AGGRAVATING CIRCUMSTANCES.
Indifference: In the face of his knowledge of the fraudulent debits from his CTA, and advice to close his CTA, Respondent continued to place client funds in his CTA. Respondent’s failure to act to protect his client’s funds despite clear knowledge of the problem and clear advice to act indicates significant indifference.
Multiple/Pattern of Misconduct: Respondent has been commingling since January 2012, and during that time period has written numerous checks, as well as making withdrawals and causing a number of electronic withdrawals, from his CTA for personal and business expenses. The commingling coupled with the gross negligence in handling client funds and the breach of fiduciary duty are multiple acts of misconduct.
ADDITIONAL FACTS RE MITIGATING CIRCUMSTANCES.
No Harm: There is no evidence to suggest any client funds were lost as a result of the
misconduct.
Additional Mitigating Circumstances: Respondent has entered into a stipulation before a Notice of Disciplinary Charges has been filed thereby saving the time and resources of the State Bar Court, and is receiving slight mitigation for doing so. (See In the matter of Downey (Review Dept. 2009) 5 Cal. State Bar Ct. Rptr 151,156; In the Matter of Johnson (Review Dept. 2000) 4 Cal. State Bar Ct. Rptr. 179, 190; see also Silva-Vidor v. State Bar (1989) 49 Cal.3d 1071, 1079.)
Respondent has been admitted to the State Bar since June 19, 2000, for a period of over 12 years, and has no prior record of discipline. The lack of prior discipline is mitigating, notwithstanding that the present misconduct is serious. (See In the Matter of Riordan (Review Dept. 2007) 5 Cal. State Bar Ct. Rptr. 41, 49; In the Matter of Stamper (Review Dept. 1990) 1 Cal. State Bar Ct. Rptr. 96, 106, fn. 12.)
AUTHORITIES SUPPORTING DISCIPLINE.
The Standards for Attorney Sanctions for Professional Misconduct provide a "process of fixing discipline" pursuant to a set of written principles to "better discharge the purposes of attorney discipline as announced by the Supreme Court." (Rules Proc. of State Bar, tit. IV, Stds. for Atty. Sanctions for Prof. Misconduct, Introduction (all further references to standards are to this source).) The primary purposes of disciplinary proceedings and of the sanctions imposed are "the protection of the public, the courts and the legal profession; the maintenance of high professional standards by attorneys and the
preservation of public confidence in the legal profession." (ln re Morse (1995) 11 Cal.4th 184, 205; std 1.3.)
Although not binding, the standards are entitled to "great weight" and should be followed "whenever possible" in determining level of discipline. (ln re Silverton (2005) 36 Cal.4th 81, 92, quoting In re Brown (1995) 12 Cal.4th 205,220 and In re Young (1989) 49 Cal.3d 257, 267, fn. 11.) Adherence to the standards in the great majority of cases serves the valuable purpose of eliminating disparity and assuring consistency, that is, the imposition of similar attorney discipline for instances of similar attorney misconduct. (In re Naney (1990) 51 Cal.3d 186, 19.) Any discipline recommendation different from that set forth in the applicable standards should clearly explain the reasons for the deviation, (Blair v. State Bar (1989) 49 Cal.3d 762, 776, fn. 5.)
Respondent admits to violations of three specific provisions of the State Bar Act and the Rules of Professional Conduct. Standard 1.6 (a) requires that where a Respondent acknowledges two or more acts of misconduct, and different sanctions are prescribed by the standards that apply to those acts, the sanction imposed shall be the more or most severe prescribed in the applicable standards.
The most severe sanction applicable to Respondent’s misconduct is found in standard 2.2(b), which applies to Respondent’s violation of Rules of Professional Conduct, rule 4-100(A).
Standard 2.2(b) provides that the range of discipline applicable to violations involving commingling or other violations of rule 4-100 that do not involve misappropriation at a minimum of a three month actual suspension, irrespective of mitigation circumstances.
In Coppock v. State Bar (1988) 44 Cal. 3d 665, the Supreme Court imposed discipline in the form of a two-year stayed suspension, two years’ probation, and a ninety day actual suspension on an attorney who established a client trust account at the request of his client for the purpose of shielding the client’s money from judgment creditors. The attorney then ceded total control of the account to the client for a period of approximately two years before closing the account and paying the funds to the client, ultimately resulting in the client defrauding others. The Court discussed and gave minimal weight to the following factors in mitigation: the attorney’s lack of prior record as his time in practice was short, the attorneys claimed emotional difficulties, and lack of harm to clients. The Court further discussed in mitigation the attorney’s good faith, good character, cooperation and remorse, but found the mitigating factors did not render the discipline excessive.
In Kelly v. State Bar (1991) 53 Cal. 3d 509, the Supreme Court imposed discipline in the form of a three-year stayed suspension, three years’ probation, and a 120 day actual suspension on an attorney as a result of misconduct in two client related matters. In the first client matter the attorney received funds from a client intended to pay a settlement, but did not deposit those funds into his client trust account, commingled those funds, and failed to promptly appropriately pay out the funds. In the second client matter the attorney failed to promptly pay out the proceeds of an airplane sale, and misappropriated a portion of those funds. In mitigation, the Court considered the lack of serious harm to the clients, the attorney’s lack of wrongful intent, and his 13 years in practice without any prior imposition of discipline. The Court, however, considered the attorney’s misconduct "serious and inexcusable" concluding, in light of the mitigation, that a 120-day actual suspension was necessary.
Coppock is informative on the issue of level of discipline insofar as that case involved fraud in the use of a CTA over an extended period of time, however, Coppock ceded control of his CTA to a client, while Respondent here continued to actively use his CTA despite knowledge of the potential for fraudulent activity. But, in this matter the appropriate level of discipline should fall in line with that imposed in Kelly. Unlike Kelley, there is no evidence Respondent here either failed to pay promptly or misappropriated client funds. Instead Respondent engaged in an extended period of commingling accompanied by gross negligence and breach of fiduciary duties in handling client funds through his continued use of a CTA subject to fraudulent debits. The facts of the current matter, coupled with the significant aggravation in Respondent’s demonstrated indifference justifies discipline in line with Kelly.
PENDING PROCEEDINGS.
The disclosure date referred to, on page 2, paragraph A(7), was December 28, 2012.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as &December 28, 2012, the prosecution costs in this matter are $2,865.00. Respondent further acknowledges that should this stipulation be rejected or should relief from the stipulation be granted, the costs in this matter may increase due to the cost of further proceedings.
EXCLUSION FROM MCLE CREDIT
Pursuant to rule 3201, Respondent may not receive MCLE credit for completion of State Bar Ethics School, State Bar Client Trust Accounting School, and / or any other educational course(s) to be ordered as a condition of suspension. (Rules Proc. of State Bar, rule 3201.)
Case Number(s): 12-O-14855
In the Matter of: Anthony N. Luti
By their signatures below, the parties and their counsel, as applicable, signify their agreement with each of the recitation and each of the terms and conditions of this Stipulation Re Facts, Conclusions of Law and Disposition.
Signed by:
Respondent: Anthony N. Luti
Date: 12/28/12
Respondent’s Counsel: Vicken Sonentz Papazian
Date: 12/28/12
Deputy Trial Counsel: Meredith A. McKittrick
Date: 12/28/12
Case Number(s): 12-O-14855
In the Matter of: Anthony N. Luti
Finding the stipulation to be fair to the parties and that it adequately protects the public, IT IS ORDERED that the requested dismissal of counts/charges, if any is GRANTED without prejudice, and:
checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
<<not>> checked The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
<<not>> checked. All Hearing dates are vacated.
The parties are bound by the stipulation as approved unless: 1) a motion to withdraw or modify the stipulation, filed within 15 days after service of this order, is granted; or 2) this court modifies or further modifies the approved stipulation. (See rule 5.58 (E) & (F), Rules of Procedure.) The effective date of this disposition is the effective date of the Supreme Court order herein, normally 30 days after the file date. (See rule 9.18(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: George E. Scott, Judge Pro Tem
Date: 1-11-13
[Rules Proc. of State Bar; Rule 5.27(B); Code Civ. Proc., § 1013a(4)]
I am a Case Administrator of the State Bar Court of California. I am over the age of eighteen and not a party to the within proceeding. Pursuant to standard court practice, in the City and County of Los Angeles on January 17, 2013, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING
in a sealed envelope for collection and mailing on that date as follows:
checked. by first-class mail, with postage thereon fully prepaid, through the United States Postal Service at Los Angeles, California, addressed as follows:
VICKEN SONENTZ-PAPAZIAN
517 E. WILSON AVE., STE. 101
GLENDALE, CA 91206
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
MEREDITH MCKITTRICK, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on January 17, 2013.
Signed by:
Angela Carpenter
Case Administrator
State Bar Court