A Crystal Lake attorney has had his law license suspended for a year after an attorney licensing board found he misappropriated more than $74,000 from a client trust bank account.
The Illinois Attorney Registration and Disciplinary Commission (IARDC) said this week that Frank John Zangara, 64, who is a sole practitioner attorney in Crystal Lake, was suspended.
His license will be suspended for one year, effective Tuesday, with the suspension stayed after four months by a two-year period of probation.
If Zangara fails to comply with the conditions of his probation, the stay on the suspension will be lifted.
Zangara was first licensed as an attorney in 1985. He handles commercial and residential real estate and business asset transactions.
The IARDC said Zangara misappropriated more than $74,000 from his client trust account between June 2019 and October 2021.
The funds in the account should have been held on behalf of clients and others for real estate escrows and earnest money deposits, the IARDC said.
A petition to impose discipline on consent said that Zangara withdrew the funds from the client trust account, drawing the balance in that account below the amounts that should have been held, primarily for real estate escrows and earnest money deposits.
The petition also said Zangara did not prepare or maintain any ongoing records of the deposits or withdrawals from the account.
The petition said he did not maintain a check register, disbursement or receipts journals, or client ledges, and he did not reconcile the account on a consistent basis or keep track of funds due to clients and others.
“Respondent did not keep track of the amount of money deposited by each client or third person, how the money was disbursed, or how much remained in the account for each client or third person,” the petition said.
The IARDC investigation showed that Zangara received and deposited $77,585.50 into the client trust account on behalf of six clients between September 4, 2020, and October 29, 2021, and did not make any disbursements on behalf of the clients.
“Therefore, on October 29, 2021, Respondent should have been holding at least $77,585.50 in the IOLTA account. However, on October 29, 2021, Respondent had drawn the balance in the IOLTA account to $41,810.38, meaning that Respondent had used for his own purposes, without authority, at least $35,775.12 of escrow funds, which he should have been holding for the benefit of clients or third parties,” the petition said.
Zangara drew a check on the account in the amount of $46,987 on behalf of a client on November 15, 2021, the petition said.
Chase refused to honor the check because there was only $41,810.38 in the account.
Chase returned the check due to insufficient funds and reported Zangara to the IARDC.
Zangara immediately deposited personal funds in the amount of $8,500 into the client trust account in order to cover the overdraft and issued a new check to the payee.
The petition said that none of the clients or third persons involved in the transactions complained to the IARDC about Zangara nor were they paid in an untimely manner.
Zangara, who has not previously been disciplined and cooperated in the disciplinary proceedings, has since implemented proper recordkeeping procedures for the account.