ARDC Accuses Lawyer of Creating False Documents in Loan Transaction

BEFORE THE HEARING BOARD:

The ARDC has accused a lawyer of creating false documents in a loan transaction. The pertinent allegations are these:

“2. In late 2010 or early 2011, Respondent was engaged in discussions with another lender, Prime Equity of Atlanta, Georgia, about borrowing $25,000 from Prime Equity. Respondent intended to use the proceeds of that loan to reduce the amount of LOP’s obligation to American Community. Prime Equity told Respondent that it would not lend the money to LOP unless Prime Equity received a first security interest in the Stephens County property, which would require American Community to agree to subordinate its own security interest in that property.

3. On or about January 10, 2011, Respondent created a document entitled “Subordination Agreement” that purported to show that American Community had “waive[d] and subordinate[d] all right, title or interest under its outstanding security deed in or to the [Stephens County] property as against the loan to be made by [Prime Equity] to [LOP] so that the security deed to be executed by [LOP] to [Prime Equity] shall convey title to the property superior to the outstanding security deed of [American Community] and superior to the indebtedness secured thereby.” Respondent added the purported signatures of American Community’s executive vice president (Rick Francois) and chief financial officer (Robert W. Getty) to the document, and then added the purported signature and notary stamp of Mark Taranelli, a notary and attorney with whom Respondent was acquainted.
4. At no time did Respondent request or receive authority from anyone at American Community to take any action concerning the Stephens County property on the bank’s behalf, nor did he have the authority of Mr. Francois, Mr. Getty or Mr. Tarinelli to add their purported signatures (and, in Mr. Tarinelli’s case, to use his notary stamp) on the purported agreement.
5. Respondent knew that the purported subordination agreement was false, because he knew that American Community had not agreed to waive or subordinate its interest in the Stephens County property, and because he knew that he had created the document and affixed purported signatures and a notary stamp to it without authority.
6. After he prepared the purported subordination agreement, Respondent delivered the document to representatives of Prime Equity in order to induce that entity to lend $25,000 to LOP based on the false representation that American Community had agreed to subordinate its interest in the Stephens County property. Respondent then caused the purported subordination agreement to be filed with the office of the Clerk of the Superior Court for Stephens County, Georgia.
7. On or about June 1, 2012, Respondent created a second document, entitled “Cancellation of Subordination Agreement,” that purported to show that American Community had cancelled the agreement described in paragraphs three through six, above. Respondent then added the purported signature of Mr. Francois and the purported signature and notary stamp of Mr. Taranelli to the document, which Respondent later caused to be filed with the office of the Clerk of the Superior Court for Stephens County, Georgia.
8. At no time did Respondent request or receive authority from anyone at American Community to take any action concerning the bank’s interest in the Stephens County property, nor did he have the authority of Mr. Francois or Mr. Tarinelli to add their purported signatures (and, in Mr. Tarinelli’s case, to use his notary stamp) on the purported cancellation document.
9. Respondent knew that the purported cancellation of the subordination agreement was false, because he knew that he had created the document, that he did not have authority from anyone at American Community to take any action on the bank’s behalf, and because he had affixed purported signatures and a notary stamp to the document without authority.
10. By reason of the conduct described above, Respondent has engaged in the following misconduct: conduct involving dishonesty, fraud, deceit or misrepresentation, by knowingly creating and signing documents without authority that contained false signatures and notary stamps, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010).

In sum, these are allegations and have not been proven. The ARDC tends to be very concerned about cases where lawyers created false documents.

Edward X. Clinton, Jr.

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