A Richmond lawyer who had a high-volume real estate practice has surrendered his law license after findings of long-time lapses in bookkeeping and registration as a settlement agent.
G. Dean Foster borrowed money to cover errors in his trust account that at one time totaled $176,000, according to the Virginia State Bar’s findings. In 2006, Foster refinanced his own home and deposited the money received to his trust account rather than pay off the old home loans. Instead, he continued to make payments on the prior mortgages, the bar said.
Foster’s accounting was so sloppy that a staffer’s embezzlement of $38,000 in 2004 or 2005 went undiscovered “until well after the fact,” according to an affidavit signed by Foster that summarized allegations of misconduct.
VSB investigators determined Foster – who had his own title agency – failed to register as a settlement agent and maintain a security bond for a period of almost three years, and did not regularly reconcile his trust account for at least seven years, going back to 2005.
The disbarment was not the first time Foster’s bookkeeping practice became a disciplinary issue. Foster accepted a public reprimand in 1997 for failing to obtain a title insurance policy as agreed in a real estate closing. The client later discovered he had paid for a title policy he never received.
Foster admitted in that case that his trust account procedures were “rather slipshod” at the time of the 1988 closing.
Details are slim about the recent allegations because Foster quickly agreed to surrender his license when complaints arrived at the VSB, said Bar Counsel Edward L. Davis. “We nipped this one in the bud,” said Kara L. McGehee, assistant bar counsel, who investigated the case for the bar.
Because the case was ended before charges were referred to a VSB disciplinary panel, information on complaints about Foster is unavailable, Davis said.
Nevertheless, the VSB reported a claim for nearly $5,000 has been filed with the VSB’s Clients’ Protection Fund based on alleged dishonesty by Foster. The claim, from Karen R. Schwartz-Phaup, seeks reimbursement of $4,992.45.
Details of the claim were not provided by the VSB, but online court records indicate Foster represented Schwartz-Phaup in a 2011 civil action in Hanover County Circuit Court. Records from Hanover County General District Court show Schwartz-Phaup obtained a $4,365.65 default judgment against Foster in November.
Contacted by Virginia Lawyers Weekly, Schwartz-Phaup declined to comment.
Davis said he could not comment on any possible civil actions or criminal charges against Foster.
Neither Davis nor McGehee had any explanation for why longstanding lapses in bookkeeping could go unnoticed by regulators when the attorney would have been handling real estate closings.
“It’s very unusual that somebody could be involved in a mismanaged escrow account with no person aggrieved,” Davis said.
Foster was represented by Michael L. Rigsby of Richmond, who did not return a call for comment as of press time.
CORRECTION: This article was corrected on Feb. 8 to reflect that Schwartz-Phaup was contacted by Virginia Lawyers Weekly, not the VSB.