A Middlesex real estate lawyer has been censured for falsifying closing statements in 174 transactions in order to collect in advance for postclosing legal services.
The state Supreme Court on June 13 accepted the findings of the Disciplinary Review Board that although the fees were earned, Roger Weil engaged in "rampant misrepresentation."
However, the court did not go as far as the DRB, which recommended a three-month suspension.
Weil came under Office of Attorney Ethics scrutiny when a former client reported that he had inflated charges on a U.S. Department of Housing and Urban Development settlement statement (HUD-1) in a 2005 case.
The revelations of overcharges in that case led OAE investigators to conduct an audit of the 174 real estate matters Weil handled in 2006.
Weil billed clients $250 per hour, but typically added a flat $395 charge on the closing statement for his "title examination" prior to closing. He also tacked on higher title, survey and filing fees than what he was required to disburse, to cover work he did after closing.
In each of five matters on which investigators focused, Weil overcharged an average of $865, which added up to more than $150,000 for the 174 real estate matters, according to the OAE's formal complaint.
In his answer, Weil contended that every charge was legitimate. "Excess charges for recording fees may not have been improper when seen as payment for significant postclosing services, which was then and still is standard practice among real estate lawyers," he wrote.
He documented examples of postclosing work, such as attending to unpaid water bills, public defender liens, lost mortgage documents, unpermitted property improvements, occupancy issues and an uncapped well. In some cases, he showed, he had performed between two and seven hours of postclosing work.
Weil apparently relied solely on the inflated fees to cover postclosing work, advised clients of this method, and never billed them on an hourly basis for those services or otherwise overcharged them.
The District XIV Ethics Committee found that Weil had violated Rule of Professional Conduct 1.15(b) — which requires a lawyer to promptly hand over funds in which the client has an interest — because he charged excess fees and did not refund them.
Weil also violated RPC 8.4(b), which prohibits misrepresentations in HUD-1 statements, the committee said.
The panel urged a censure, because Weil "benefitted at the cost of his clients."
In an April 16 decision, the DRB overturned some of the DEC's findings but nonetheless recommended a three-month suspension rather than a censure.
The DRB dismissed the RPC 1.15(b) violation because Weil was entitled to the fees he collected — even though he collected them inappropriately — and thus was not required to pay any refunds.
"There is no indication that respondent did not earn the fees that he collected," DRB chairman Louis Pashman said, noting Weil's documentation, clear recollection of each client matter and lack of evidence of double billing.
The panel did uphold the RPC 8.4(c) violation, warning that a HUD-1 statement "requires the closing agent to certify that the information contained in it is accurate" and "is not an invitation for creativity, as respondent utilized it for fees."
The DRB compared Weil's case to In re Gensib, 206 N.J. 140 (2011), where the attorney, New Brunswick solo Carl Gensib, was censured for inflating clients' title insurance costs by $300 in order to cover possible future fees from the title company. Gensib concealed this practice from clients but did eventually reimburse them, even before he was aware of the pending ethics investigation.
By contrast, Weil's conduct was committed on a very large scale, and he didn't adequately advise clients up front about what his total fees would be, the panel said, counting each as an aggravating factor and recommending a three-month suspension.
Pashman and two members voted for a censure, while another voted for a less-serious reprimand.
On June 13, the state Supreme Court settled on a censure, but did not provide its reasoning in the order.
Weil, admitted in 1979, had one prior discipline: he was reprimanded in September 2011 for drafting a friend's will in which Weil's wife was a beneficiary — to the tune of $1.3 million.
Weil did not return a call. Neither did his lawyer, Medford solo David Dugan III, nor Deputy Ethics Counsel Christina Blunda Kennedy, who prosecuted the matter.