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Judges: Lawyer used trust account as personal bank account

A Richmond Circuit Court panel has suspended a Virginia lawyer for three years on findings that he mishandled client money and used his office trust account as a personal bank account.

The Virginia State Bar in May sought speedy disciplinary action against Richmond attorney Kenneth W. Paciocco saying his continued practice of law “poses an imminent danger to the public.”

For two years, Paciocco failed to notify a client about a $15,000 insurance “med pay” check he received, VSB prosecutors said. Paciocco only repaid the client after he received the client’s bar complaint, the VSB charged. During the intervening time, the trust account balance fell below $3,000, the bar alleged.

The bar charged that Paciocco failed to pay liens against his clients’ settlement money after withholding money for those liens from client payments.

“He then does not advise clients that he has not paid their liens and that he continues to hold their funds, nor does he preserve or return their funds,” wrote assistant bar counsel Renu M. Brennan when the VSB brought ethics charges May 16.

Paciocco’s lawyer, Michael L. Rigsby, said Paciocco was seeking to negotiate reductions in some of those liens.

Paciocco allowed his trust account to dip to less than $2,000, then replenished it with personal life insurance proceeds, the VSB charged. From the trust account, Paciocco allegedly made a personal loan to his assistant, paid alimony to his ex-wife, paid college tuition for his children, and paid rent.

The bar asserted that Paciocco was likely to continue in his ways. He reportedly misrepresented details of the $15,000 settlement in discussions with a bar investigator and showed little effort to clean up his finances.

“Respondent’s attitude and actions reflect an underlying failure to appreciate his professional duty to his clients,” Brennan wrote.

Brennan acknowledged Paciocco had no prior disciplinary record.

Rigsby said Paciocco never took client money for his own use.

On Aug. 29, the three-judge Richmond Circuit Court panel ruled the bar had proved its case by clear and convincing evidence as to various charges, most related to record keeping. The court’s findings included conduct involving “dishonesty, fraud, deceit or misrepresentation which reflects adversely on the lawyer’s fitness to practice law.”

Paciocco’s three year suspension was effective Sept. 15.

Update Oct. 27: Paciocco has filed an appeal with the Supreme Court of Virginia, according to Bar Counsel Edward L. Davis.

Corrected on Oct. 8 to reflect that Paciocco was not found to have misappropriated client money or converted client money to his own use. VLW regrets the error in an earlier account.

 

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