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A veteran Manhattan bankruptcy attorney charged with misappropriating some $800,000 of escrow funds over a period of five months has been immediately suspended from practicing law for alleged misconduct that “threatens the public interest,” a state appeals court ruled Tuesday, brushing back the lawyer’s attempts to clarify what occurred.

Pincus David Carlebach’s license is suspended until further court order, a unanimous panel of the Appellate Division, First Department, decided. The immediate, interim suspension indicates that the First Department’s Attorney Grievance Committee will look to move forward with full disciplinary charges against Carlebach, and that he may ultimately suffer a heavier punishment.

Carlebach, who was admitted to the state bar in 1991, is accused of converting or misappropriating third-party funds from an escrow account he managed that was being used for an expected bankruptcy-related real estate transaction, the panel wrote.

In fighting the grievance committee’s motion to immediately suspend him, Carlebach, who appeared before the panel pro se, argued that the third-party buyer had “unclean hands” because the buyer never intended to close the real estate sale. Carlebach also contended that he was able to prevent the buyer’s fraudulent scheme aimed at having the bankruptcy court cancel the contract so the buyer would reap a $400,000 “breakup fee,” the panel wrote.

But the justices indicated that Carlebach’s “unclean hands” and related arguments amounted to a red herring. After listing them, they never addressed them.

Instead, the panel simply pointed out that Carlebach “does not address his conversion/misappropriation of the down payment.”

Carlebach—who, according to online directories, operates a small or solo practice based in Lower Manhattan—did not return a phone call seeking comment on Tuesday.

A spokeswoman for the First Department’s Attorney Grievance Committee declined to comment on the matter, which was labeled M-4856 in the opinion. The committee’s standard position is not to comment, she noted.

According to the justices, the grievance committee began an investigation of Carlebach after receiving a complaint that he’d failed to refund a down payment in a canceled real estate transaction. Carlebach was representing the seller in the transaction, who was also a debtor in an ongoing bankruptcy proceeding.

In early 2017, the buyer entered into a contract to purchase real estate from the seller, according to the panel. Carlebach acted as escrowee in the transaction, and on March 10,  the buyer wired a down payment of $1 million into Carlebach’s IOLA account, the panel said.

Later, the buyer, who was not named by the panel, exercised its right to terminate the contract and demanded return of the down payment. Then in June, Carlebach returned $200,000 of the down payment, the panel said. The buyer’s attorney, also unnamed in the opinion, in turn demanded that Carlebach immediately send the remaining balance.

In August, Carlebach returned an additional $25,000. But after that, the buyer never received any more of its funds, said the panel, consisting of Justices Rolando Acosta, David Friedman, Rosalyn Richter, Karla Moskowitz and Ellen Gesmer.

Moreover, Carlebach’s IOLA account records covering January to July, obtained by the grievance committee, showed that he began making account withdrawals after the down payment was received. The account balance fell below $1 million on March 16, and continued to drop, dipping to $18,092.64 as of July 31, the panel wrote.

Carlebach’s former counsel, also unnamed, emailed the grievance committee bank statements for Carlebach’s IOLA account and business accounts, but did not provide additional records requested by the committee, the panel said.

The panel wrote that “the bank’s records presented by the committee, which respondent [Carlebach] has failed to address adequately, demonstrate that he converted and/or misappropriated approximately $800,000 of the buyer’s down payment, and that this conduct immediately threatens the public interest.”

At least one online directory listed Carlebach as not having any history of “instances of professional misconduct,” and it noted that his practice involved both bankruptcy and commercial real estate representation. The panel’s opinion noted that he was admitted in the Second Department but, during times relevant to the disciplinary proceeding, had an office in the First Department.