California Bar Recommends Boot For Attorney Who Played 'Hide & Seek' With Escrowed CMO, Pocketing $400K In Accrued Interest Owed To Rightful Owners; Judge: Lawyer "Fails To Understand & Appreciate The Basic Duties Of A Fiduciary ... Misconduct Displays Shocking Lack Of Basic Honesty"
From The State Bar of California:
- A State Bar Court hearing judge has recommended the disbarment of a Beverly Hills attorney for misappropriating about $400,000 in interest from two investment vehicles that he agreed to hold in escrow pending their sale.
In each case, Jon A. Divens, 57, [bar # 145549] agreed to hold in escrow a collateralized mortgage obligation (CMO), a type of investment vehicle that owns an underlying pool of mortgages. When the proposed sales of the CMOs fell through, Divens hid the CMOs from their rightful owners for months and transferred the monthly interest payments to his personal investment accounts.
State Bar Court Judge Richard A. Platel rejected Divens’ argument that he was entitled to the interest under article 8 of the California Uniform Commercial Code and found him culpable of three counts of moral turpitude.
“It is clear from the evidence that, from day one, respondent never intended on returning the Cobalt CMO or the FNMA CMO or the interest income they generated to the rightful owners,” Judge Platel wrote in the April 17 decision. “Respondent displays a complete lack of insight and recognition of the wrongfulness of his misconduct. What is more, the record establishes that, after 23 years as a member of the State Bar of California, respondent fails to understand and appreciate the basic duties of a fiduciary. Finally, respondent’s misconduct displays a shocking lack of basic honesty.”(1)
(1) The State Bar of California Client Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzlement by a California-licensed attorney.
For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
- Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
- Check the USA Client Protection Funds Map;
- Check the Canada Client Protection Funds Map.