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SC Supreme Court Disbars Attorney For Misappropriating Client Funds, Tax Evasion

He is accused of disbursing $2,500 of a client’s settlement to himself …

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A North Carolina attorney who also practices in this state was disbarred last week by the South Carolina Supreme Court for “misappropriating client settlement funds” and “willfully failing to pay state and federal income taxes for six and seven years respectively,” according to an order filed Wednesday.

H. Bright Lindler was also accused of failing to remit federal employment taxes for 37 quarters from 2008 to 2020.

Lindler was disbarred by the North Carolina State Bar in December.


According to Wednesday’s order, he reported his disbarment to the Office of Disciplinary Counsel in South Carolina and argued that his misconduct warranted “substantially different discipline in this state.”

The South Carolina Supreme Court decided that Lindler’s admitted misappropriation of client funds and “criminal tax-related misconduct” were enough to prevent him from practicing law here.

Read the order here.

This is the second disbarment so far this year of an attorney who practices in both North and South Carolina.

In January, FITSnews reported that the South Carolina Supreme Court disbarred Christi Anne Misocky, a Lancaster attorney who was accused of using personal client information to steal money and counterfeit checks to buy a car.

Misappropriation of Client Funds

The accusations against Lindler date back to June 2008 when he was hired to represent a client in a workers’ compensation case, according to a complaint filed in February 2021 against Lindler by the North Carolina State Bar.

A year later, he negotiated a $2,500 settlement for his client. The client initially agreed but then changed her mind, saying she did not want to settle her case.

Lindler, however, signed the settlement agreement on his client’s behalf and accepted the $2,500 for full and final settlement, the complaint states.

“By signing the settlement agreement on (the client’s) behalf, Lindler falsely represented to the defendants that (she) agreed with the terms of the settlement.”

The settlement was approved in September 2009, and Lindler was given $625 in fees, deducted from the $2,500.

When Lindler received the settlement funds on behalf of his client, he did not tell her and instead sent her a letter, asking her to make an appointment with him.

“There have been other developments in your case … One topic of the discussion will be the expense in the amount of $2,553.45 that you owe this office.”

The client did not respond to his letter, and Lindler made no additional effort to inform the client of her settlement.

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He instead disbursed the money to himself.

In 2010, the client contacted the defendant to ask about her claim and learned that her case had been settled.

The defendant contacted Lindler and he wrote his client a letter with details of his representation of her. He then forwarded a copy of that letter, as well as an earlier letter he had sent his client, to the defendant and the defendant’s attorney.

The North Carolina State Bar determined that Lindler was guilty of violating five Rules of Professional Conduct, including violating the attorney-client relationship.

Income Taxes

The North Carolina State Bar also found that Lindler did not pay state income tax between 2009 and 2014, nor his federal income tax between 2007 and 2013.

According to the complaint, the IRS filed tax liens against Lindler for income tax, penalties and interest in June 2011 for $223,261.54 (for tax years 2007, 2008 and 2009); June 2014 for $206,171.86 (for tax years 2010, 2011 and 2012); January 2015 for $39,210.81 (for tax year 2013); and August 2015 for $544,464.41 (for tax years 2007, 2008, 2009, 2010, 2011, 2012 and 2013).

Similarly, the North Carolina Department of Revenue place liens on Lindler’s property in July 2011 for $25,448.89 (for tax year 2009); January 2012 for $20,040.98 (for tax year 2010); July 2014 for $20,569.80 (for tax year 2011); May 2013 for $9,838.29 (for tax year 2012); January 2015 for $8,802.72 (for tax year 2013); and October 2015 for $4,554,33 (for tax year 2014).

The complaint notes that Lindler’s failure to pay income taxes was “willful,” and that willful failure to pay taxes is a misdemeanor.

Employment Taxes

The North Carolina complaint also outlines Lindler’s failure to pay employment taxes on his employees for 37 quarters.

“As the owner of his law firm, Lindler was required to collect, truthfully account for, and timely pay over to the IRS employment taxes for employees of his law firm.”

The willful failure to “collect, account for, and pay any tax imposed by the Internal Revenue Service” is a felony.

After disbarring Lindler, the North Carolina State Bar granted him 60 days to complete any pending legal matters and ordered him to pay them the administrative fees and costs associated with his case. Lindler was also given 10 days to hand over his client files and contact information to the State Bar.

Read the North Carolina decision here.


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ABOUT THE AUTHOR …

(Via: Provided)

Liz Farrell is the new executive editor at FITSNews. She was named 2018’s top columnist in the state by South Carolina Press Association and is back after taking a nearly two-year break from corporate journalism to reclaim her soul. Email her at [email protected] or tweet her @ElizFarrell.

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