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Recent Disciplinary Actions by the North Carolina Bar: Spring 2017

Each quarter, the North Carolina State Bar (“NC Bar”) publishes its most-recent disciplinary actions against attorneys licensed in the state. Here is a summary of some of the most noteworthy actions from Spring 2017:

1. Disbarments

The NC Bar’s Disciplinary Hearing Commission (DHC) disbarred four attorneys during the quarter. Three of the disbarments were based, at least in part, on misappropriation of clients’ entrusted funds. All three of the disbarred attorneys had been in practice for at least 30 years. In one case, the attorney had misappropriated well in excess of $80,000 from multiple clients. In the other two, the misappropriated amounts were smaller, but the attorneys were also found to have mismanaged and misrepresented the handling of their client trust accounts, including intentionally misidentifying the source of trust funds.

In the fourth disbarment action, the attorney consented to resignation of his law license while facing an investigation for sending sexually-suggestive emails and engaging in sexual relations with immigration clients who were “especially vulnerable.”

2. Suspensions

Ten North Carolina-barred attorneys received suspensions and stayed suspensions from the DHC during the spring. The grounds for suspension included:

3. Censures and Reprimands

Six attorneys received censures and/or reprimands during the quarter. The grounds for discipline included making misrepresentations to the court, practicing on a suspended license, failing to take action as appointed appellate counsel for indigent clients, charging excessive fees, failing to communicate with clients, failing to make timely filings on behalf of clients, and failure to timely comply with the Grievance Committee’s requests.

Representation for Attorneys Facing Disciplinary Action in Raleigh, NC

The lawyers in Cheshire Parker Schneider & Bryan, PLLC’s professional license defense practice represent attorneys who are facing disciplinary action by the NC Bar. If you have received a Letter of Notice from the Grievance Committee, we can help you assess your situation and seek to protect your license. To speak with an attorney at our Raleigh, NC offices in confidence, please call (919) 833-3114 or inquire online today.

 

A Look at the CPA Ethics Rule Changes Effective May 1, 2017

Some noteworthy changes to the professional ethics and conduct rules for Certified Public Accountants (CPAs) in North Carolina went into effect on May 1, 2017. The amended rules include the following:

1. 21 NCAC 08N .0203 Discreditable Conduct Prohibited

Rule .0203 prohibits CPAs from engaging in conduct that is “discreditable to the accounting profession.” Under the revised rule, listed examples of “discreditable conduct” now include:

Failure to participate in a peer review program is an addition from the previous version of the rules.

2. 21 NCAC 08N .0208 Reporting Convictions, Judgments, and Disciplinary Actions

Section (c) of Rule .0208 has been revised to clarify the conditions under which a CPA must notify the State Board of certified Public Accountant Examiners (the “Board”) of a settlement with a client or firmer client. The revised language states:

“A CPA shall notify the Board within 30 days of any written settlement in which a client or former client releases the CPA from liability that is grounded upon an allegation of professional negligence; gross negligence; dishonesty; fraud; misrepresentation; incompetence; or violation of any federal, state, or local law, regardless of whether the client or former client has filed a civil suit or criminal charge.”

3. 21 NCAC 08N .0305 Retention of Client Records

The revisions effective May 1 include substantial changes to Rule .0305, which governs the retention of client records. The changes affect CPAs’ obligations with respect to the delivery or return of work product, and also acknowledge that state and federal regulations may impose obligations to deliver work papers to clients even when such obligations are not imposed by the Board. The revisions also clarify that CPAs may charge fees for their time spent in retrieving copies of work papers at a client’s request (in addition to charging any copying costs incurred). CPAs are not required to convert records into electronic format; however, “[i]f the client requests records in a specific format and the records are available in such format within the CPA’s custody and control, the client’s request should be honored.”

Contact the Raleigh CPA License Defense Attorneys at Cheshire Parker

The professional license defense attorneys at Cheshire Parker Schneider & Bryan, PLLC provide experienced representation for CPAs facing disciplinary action in North Carolina. To speak with an attorney at our offices in Raleigh, please call (919) 833-3114 or request a consultation online today.

 

Ethical Considerations for Virtual Law Offices (VLOs) in North Carolina

Whether your goal is to save on expenses or maintain as much personal freedom as possible (or, as is perhaps most common, a combination of both), operating a virtual law office (VLO) has grown into a viable option within the legal profession. These days, more lawyers are spending the majority of their time working from home, having less direct contact with clients, and relying heavily – if not exclusively – on the Internet in all aspects of their practice.

While virtual law offices are subject to the same ethical requirements as more-traditional law firms, practicing in a VLO raises some unique ethical considerations as well. For example:

1. VLOs and UPL

Thanks to the Internet, a home-based solo practitioner can reach a worldwide audience with the click of a button. While this can be a good thing for demonstrating your competence and capabilities (i.e. through blog articles, third-party publications and other forms of content marketing), it also raises some potential concerns about the unauthorized practice of law (UPL).

With regard to issues of UPL, North Carolina’s Rules of Professional Conduct (the “Rules”) not only address attorneys licensed in the state, but also those licensed in other jurisdictions who are targeting in-state residents and businesses. Other states have similar rules as well. As a result, the North Carolina State Bar advised in a 2006 Formal Ethics Opinion that, “a prudent lawyer may want to research other jurisdictions’ restrictions on advertising and cross-border practice to ensure compliance before aggressively marketing and providing legal services via the internet.”

2. Convenience vs. Competence and Conflict Avoidance

Another potential concern for virtual lawyers touches on one of the most-basic rules of ethical practice: providing competent representation to the client. When communications take place over email, in chats and text messages, and through standardized questionnaires and forms, it is possible for both the lawyer’s and the client’s (or prospective client’s) intent to get lost in translation. While operating a virtual practice gives lawyers the freedom to be available 24/7 (or not), it also raises the risk that the quality of the representation will be inherently impaired.

The same issues also raise potential concerns regarding conflict checks. Identifying potential conflicts often requires an in-depth discussion so that the lawyer can gain a clear understanding of the prospect’s business or personal circumstances. In many cases, prospective clients will need to be educated on the issue of conflicts in general as well. Without adequate communication, lawyers may find it difficult to be confident that they are complying with the Rules’ conflict-of-interest requirements.

3. Electronic Records and Confidentiality

While there are now numerous service providers that offer online document storage specifically designed for VLOs and other law firms, the recent Yahoo data breach and other high-profile cases show that data security remains a significant concern. Internet-based law firms must not only make sure that their file storage systems meet the necessary standards, but that their email applications and other communication tools sufficiently protect their clients’ confidential information.

Contact Cheshire Parker Schneider & Bryan, PLLC

Cheshire Parker Schneider & Bryan, PLLC is a law firm with offices in Raleigh, NC that represents attorneys in matters involving ethical issues and professional license defense. If you have questions about establishing a virtual law office, or if you are facing an ethical issue in your practice, call (919) 833-3114 or contact us online for a confidential consultation.

 

Confidentiality and Client Records: Understanding CPAs’ Ethical Obligations

All certified public accountants (CPAs) in North Carolina are subject to Subchapter 08N of the North Carolina Administrative Code, which is entitled “Professional Ethics and Conduct.” This subchapter establishes the rules that govern all CPAs and accounting practices in the state, including those relating to confidentiality and client records.

While there are several provisions of Subchapter o8N that either directly or indirectly address confidentiality and client records, the two primary sections devoted to these topics are:

Confidentiality

Under 21 NCAC 08N .0205, CPAs in North Carolina owe a strict duty of confidentiality to their clients:

“A CPA shall not disclose any confidential information obtained in the course of . . . a professional engagement except with the consent of the . . . client.”

While there are a number of exceptions to this rule, they are all narrowly limited, and they only apply in certain discrete circumstances where disclosure is required by law or rule. For example, disclosure of confidential client information is allowed without consent if required by court order or subpoena, or if requested in connection with an enforcement action by the State Board of Certified Public Accountant Examiners (the “State Board”).

Retention of Client Records

Under 21 NCAC 08N .0305, North Carolina CPAs owe a number of duties with regard to the retention and return of client records. Generally speaking, a CPA must return a client’s records “in his or her possession . . . after a demand is made for their return.” The rule further makes clear that “records shall be returned upon demand,” unless a reasonable delay is necessary to retrieve a closed file or extract work papers that are subject to retention under the rule.

With regard to work papers, CPAs in North Carolina have a general obligation to retain them for at least five years (or longer if required by law). All retained records remain subject to the confidentiality obligations in 21 NCAC 08N .0205. However, if certain work papers “contain data that should be reflected in the client’s books and records but . . . have not been duplicated therein,” then those work papers must be provided to the client upon request as well. As examples of work papers to which clients may be entitled, 21 NCAC 08N .0305 lists:

Speak with a Raleigh Professional License Defense Attorney in Confidence

If you are facing licensing action due to an alleged breach of confidentiality or failure to appropriately dispose of client records, the professional license defense attorneys at Cheshire Parker Schneider & Bryan, PLLC can defend you in your State Board proceeding. To discuss your situation in confidence, call our Raleigh, NC law offices at (919) 833-3114 or request a consultation online today.

 

A Look at the Rule Changes Currently Pending with the North Carolina Medical Board

The NC Rules Review Commission of the North Carolina Medical Board (NCMB) regularly considers and approves changes to the rules that govern the practice of medicine in North Carolina. You can follow the latest developments and review drafts of proposed and final rule changes through the NCMB’s Rule Change Tracker.

Here are some highlights from the NC Rules Review Commission’s most recent activity:

Effective July 1, 2017: Mandatory CME on Controlled Substance Prescriptions

Beginning July 1, 2017, all licensed practitioners and physician assistants who prescribe controlled substances will be required to complete annual continuing medical education (CME) on, “controlled substance prescribing practices, recognizing signs of the abuse or misuse of controlled substances, and controlled substance prescribing for chronic pain management.” Physicians must complete at least three hours of controlled substance CME (from the already-required 60 hours of Category 1 CME); and, for physician assistants, at least two of their mandatory 50 hours of CME must be devoted to the controlled substance-related topics listed above. The revisions affect Rules 21 NCAC 32R .0101 and 21 NCAC 32S .0216.

Physicians holding a residency training license are excluded from the new requirements.

Proposed: Mandatory CME on Controlled Substances Prescriptions for Nurse Practitioners

The NCMB has also proposed a change to Rule 21 NCAC 32M .0107 that would require nurse practitioners who prescribe controlled substances to complete at least one hour of continuing education annually that specifically addresses controlled substance prescription practices and abuse. As currently drafted, the rule change would become effective upon approval.

Proposed: Changes to Prescription Refill Rules for Controlled Substances

Also pending is a change to Rule 21 NCAC 32M .0109 that would change current practices concerning prescription refills. Under the current rule, refills can be issued for a period of up to one year, with the exception that dosage units for controlled substances on Schedules II, IIN, III, IIIN, IV and V are limited to a 30-day supply. The proposed change eliminates both of these qualifications, and simply states that refills for all controlled substances are subject to the Controlled Substance Law and Regulation.

The NCMB’s Disciplinary Authority

It is critical that medical practitioners in North Carolina stay up-to-date on the NCMB’s rule changes. Failure to adhere to the revised rules, even if the failure represents an adherence to previous standards, can lead to professional discipline – up to and including license revocation. While a single, minor rule violation is unlikely to have such dire consequences, multiple violations can lead to enhanced discipline, and violations such as prescription errors resulting from a lack of CME can have severe professional implications as well.

Speak with a Raleigh Professional License Defense Attorney

If you are facing disciplinary action by the NCMB and would like to speak with an attorney about protecting your professional license, contact the Raleigh, NC law offices of Cheshire Parker Schneider & Bryan, PLLC. To schedule a confidential initial consultation with one of our professional license defense attorneys, call (919) 833-3114 or request an appointment online today.

 

Steps to Take When Facing a Grievance Filed by the North Carolina Medical Board

As a physician facing disciplinary action from the North Carolina Medical Board, there are steps you should begin taking promptly in order to minimize the consequences to the greatest extent possible. Depending on the severity and extent of the allegations, you could be facing sanctions up to and including revocation of your license – so you need to commit yourself to doing what is necessary to protect your practice.

While each case is unique, the following are all general steps physicians can take to begin preparing their defense when facing a grievance filed by the North Carolina Medical Board:

1. Make Sure You Understand the Allegations

The first step toward building an effective defense strategy is to understand the allegations against you. The notice you received should provide some insights, but you may need help from an attorney to gain a clear understanding of the severity of your present circumstances. The North Carolina Medical Board pursues cases for issues ranging from misrepresentations on license applications to criminal healthcare fraud, and the nature of your case will determine what you need to do to protect yourself.

2. Start Gathering Evidence

Once you know what the case is about, then you can start gathering evidence to aid in your defense. This could include academic records, patient records, billing records or any of a number of other types of documentation. You need to be careful about whose help you solicit during this process, and the best thing you can do is to seek guidance from your attorney.

3. Advise Your Staff to Avoid Mistakes that Could Hinder Your Defense

While you are facing disciplinary action, it is important that you and your staff avoid making mistakes that could jeopardize your defense. This takes on heightened importance if there is a possibility that the allegations involved could also lead to criminal charges. Any ongoing improprieties relating to the grievance should be addressed promptly, and your staff must avoid disposing of emails, records and other evidence that may be relevant to the case.

4. Understand the Possible Consequences of an Unfavorable Resolution

In disciplinary proceedings, the North Carolina Medical Board’s authority ranges from taking no adverse action to annulling or revoking the physician’s license to practice medicine in the state. Similar to understanding the allegations against you, understanding the potential consequences will be critical to constructing your defense. Can you avoid sanctions altogether? Or, should your defense strategy focus on minimizing the consequences of an adverse decision? These are crucial questions that require you to make informed decisions as soon as possible.

5. Hire an Experienced Professional License Defense Attorney

You are entitled to legal representation during your disciplinary proceeding; and, with your professional reputation (and potentially your license) at stake, you cannot afford to try to defend your case on your own. At Cheshire Parker Schneider & Bryan, PLLC, the attorneys in our professional ethics and licensing defense section represent physicians in Raleigh and statewide; and, if necessary, we can take action quickly to help you protect your practice.

Speak with a Professional License Defense Attorney about Your North Carolina Medical Board Grievance

If you are facing a grievance from the North Carolina Medical Board and would like to speak with an attorney about your case, contact Cheshire Parker Schneider & Bryan, PLLC to schedule a confidential initial consultation. You have questions. We have answers. Call (919) 833-3114 or request an appointment online today.

 

Can Criminal Charges Put Your Professional License at Risk?

As a licensed professional in North Carolina, facing criminal charges can cause significant harm to your reputation, especially if the charges become publicized. But, did you know that, in many instances, facing criminal charges can put your professional license at risk as well?

In many professions requiring licensure, commission of a criminal act is grounds for license suspension or revocation. While the rules governing some professions only provide for discipline in the event that a professional commits a crime that is in some way relevant to his or her practice, these rules are often subject to broad interpretation. As a result, if you are a licensed professional facing criminal charges in North Carolina, you may need to defend yourself on two separate fronts in order to attempt to safeguard your career.

When Criminal Charges May Lead to Professional Discipline

The following are a few, non-exclusive examples of licensing laws and rules in North Carolina that provide for potential discipline when a professional faces criminal charges:

1. North Carolina Rules of Professional Conduct for Lawyers

Under Rule 8.4 (“Misconduct”) of the Rules of Professional Conduct, it is professional misconduct for a lawyer to, “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.”

Under Comment [2] to Rule 8.4, “[o]ffenses involving violence, dishonesty, breach of trust, or serious interference with the administration of justice,” may all warrant disciplinary action. Comment [3] makes clear that a conviction is not necessary to establish that a lawyer has committed a criminal act.

2. North Carolina General Statutes Chapter 90, Medicine and Allied Occupations

Under Section 90-14(a) of the North Carolina General Statutes, the North Carolina Medical Board (the “Board”) has the authority to revoke a physician’s license if he or she is convicted, “in any court of a crime involving moral turpitude, or the violation of a law involving the practice of medicine, or a conviction of a felony.”

Pursuant to subsection (c) of Section 90-14, a felony conviction results in automatic revocation of the physician’s license unless (i) the Board decides otherwise, or (ii) the physician submits a request for a hearing within 60 days of receiving notice from the Board.

3. North Carolina General Statutes Chapter 93, Real Estate License Law

Under Section 93A-6(b) of the North Carolina General Statutes, the North Carolina Real Estate Commission has the power to suspect or revoke the license of any licensee who, “has been convicted or has entered a plea of guilty or no contest . . . of any misdemeanor or felony that involves false swearing, misrepresentation, deceit, extortion, theft . . . or any other offense showing professional unfitness or involving moral turpitude.” In addition, to justify suspension or revocation, the offense must, “reasonably affect the licensee’s performance in the real estate business.”

Contact Our Raleigh Professional License and Criminal Defense Attorneys Today

If you are a licensed professional facing criminal charges in the Raleigh area, we encourage you to contact us for a confidential initial consultation. To speak with our professional license and criminal defense attorneys about your case, call (919) 833-3114 or inquire online today.

 

Summary of Recent Disciplinary Actions by the NC Bar

Each quarter, the North Carolina State Bar (“NC Bar”) updates its website to include summaries and links to the most-recent disciplinary actions involving North Carolina-barred attorneys. These updates should be of interest to all practicing attorneys in North Carolina, not only as a reminder of the wide range of unprofessional (or illegal) conduct that can lead to discipline, but also for purposes of analyzing the varying degrees of discipline that the NC Bar can impose depending upon the specific circumstances involved.

For example, as you’ll see below, three of the four most-recent disbarments were the result of misappropriation of trust funds – in amounts ranging from $3,000 to over $110,000. However, another attorney who failed to maintain and properly disburse trust funds to clients received only a three-year stayed suspension. Needless to say, the NC Bar takes all allegations of unprofessional conduct extremely seriously, and any attorney who receives a Letter of Notice from the bar must take timely and appropriate action in order to protect his or her license.

Three Attorneys Disbarred in June and July for Misappropriating Client Funds

In unrelated disciplinary matters, three North Carolina attorneys lost their licenses this summer for misappropriating funds from their client trust accounts. While two of the disciplinary actions involved misappropriation of funds “totaling at least $100,000,” in the third action the attorney consented to disbarment after admitting to misappropriation of just over $3,000.

Suspensions and Stayed Suspensions

An attorney who had been licensed in North Carolina for nearly 20 years consented to a five-year suspension for mismanaging his client trust account (including unintentionally misappropriating funds) and “neglect[ing] multiple clients.” The specific findings of fact in the Consent Order included:

Following a June hearing before the NC Bar’s Disciplinary Hearing Commission (DHC), a criminal attorney received a three-year license suspension as a result of, among other things: deposing multiple State’s witnesses without notifying the District Attorney’s Office, attempting to misrepresent a client’s spouse as his “assistant” in order to conduct an after-hours penitentiary visit, and obtaining a fraudulent notarization on a Power of Attorney he obtained from one of his clients.

Finally, an attorney licensed for decades received a three-year stayed suspension (subject to compliance with various conditions) following a DHC hearing in April during which it was found that the attorney had, among other things:

Of note, the DHC acknowledged that the attorney (i) suffered from a medical condition which caused her to wind down her practice, and (ii) had closed her client trust account subsequent to the violations.

Speak with a Raleigh Professional License Defense Attorney at Cheshire Parker Schneider & Bryan, PLLC

Cheshire Parker Schneider & Bryan, PLLC’s professional ethics and licensing defense section represents attorneys facing disciplinary action throughout North Carolina. If you need to speak with an attorney about protecting your license, call (919) 833-3114 or request a consultation online today.

 

I Received a Letter of Notice From the NC Bar Grievance Committee – What Now?

If you have received a Letter of Notice from the Grievance Committee of the North Carolina State Bar, you need to take it seriously. Even if you believe that the allegations contained in the letter are unfounded, you have a professional obligation to respond, and failure to respond is itself grounds for discipline under the Rules of Professional Conduct (RPC).

However, absent a failure to respond, receiving a Letter of Notice is not necessarily a precursor to facing discipline from the Grievance Committee or a referral to the Disciplinary Hearing Commission (DHC). Many client grievances are unfounded, and in many cases attorneys will have sound defenses to what would otherwise be discipline-worthy allegations.

What is a Letter of Notice?

A Letter of Notice is exactly what it says it is – a letter that puts you on notice that a client has filed a grievance against you. It does not reflect the position of the Grievance Committee (other than its determination that the allegations, if proven, would constitute a violation of the RPC), and it does not mean that any disciplinary action is being taken against you. The Letter of Notice, essentially, is your opportunity to respond to the allegations before they go to the Grievance Committee for a determination of misconduct.

Responding to a Letter of Notice

You have fifteen days from the date of service to respond to a Letter of Notice. The response should contain, “a full and fair disclosure of all facts and circumstances pertaining to the alleged misconduct,” including copies of all relevant documents from the client’s file. If you need more than fifteen days (as is typically the case), you can request an extension, and as noted on the State Bar’s website, “extensions of time to respond are regularly granted.”

You are, of course, entitled to representation throughout the disciplinary process, and it will typically be in your best interests to hire an attorney who regularly practices in professional license defense. The more apt your response to the Letter of Notice, the greater your chances of securing a favorable resolution prior to full consideration by the Grievance Committee. If your response is incomplete, appears evasive, or raises more questions than it answers, the Grievance Committee is more likely to find probable cause to consider the grievance – and possibly open an investigation.

Potential Discipline Following a Letter of Notice

Upon considering a client’s grievance and the attorney’s response, the Grievance Committee can take a number of different actions. These include:

Contact a Raleigh Professional License Defense Attorney at Cheshire Parker Schneider & Bryan, PLLC

The attorneys in our professional ethics and licensing defense section regularly represent other lawyers in North Carolina who have received Letters of Notice from the State Bar’s Grievance Committee. To discuss your response in confidence, call (919) 833-3114 or contact us online today.

 

Examples of Recent Disciplinary Actions by the North Carolina Medical Board

Among its many roles, the North Carolina Medical Board is tasked with conducting disciplinary proceedings and imposing disciplinary action for physicians who fail to meet their professional responsibilities. If you are facing disciplinary action by the North Carolina Medical Board (the “Board”), you need to take your situation extremely seriously. The Board has broad authority to impose sanctions for professional misconduct — sanctions that can include revocation of your medical license.

Recent License Revocations and Suspensions by the North Carolina Medical Board

The following are some examples of recent disciplinary actions by the North Carolina Medical Board:

License Suspended Indefinitely Due to Arrest for Driving While Impaired (DWI)

In July, the North Carolina Medical Board ordered an indefinite license suspension for an experienced physician due to his arrest for driving while impaired (DWI) and simple possession of a controlled substance. The physician was found stopped on the side of the road, “extremely impaired” and in possession of a number of controlled prescription medications without a valid prescription.

Following his arrest, the physician inactivated his license and refused to meet with anyone from the Board. The Board indefinitely suspended his license in his absence, citing N.C. Gen. Stat. § 90-14(a)(5) (authorizing suspension based upon “[b]eing unable to practice medicine with reasonable skill and safety to patients by reason of illness, drunkenness, excessive use of alcohol, drugs, chemicals, or any other type of material”).

License Revoked for Health Care Fraud Conviction

Also in July, the Board issued a notice of revocation to a physician who had been convicted on two counts of felony health care fraud in federal court. Under N.C. Gen. Stat. § 90-14(c), a felony conviction results in automatic license revocation unless the disciplined physician requests a hearing within 60 days of receiving the notice of revocation from the Board.

False Statements on Application Result in License Annulment

In May, a physician who was newly-licensed in North Carolina had his license annulled after the Board discovered that he had failed to disclose material information and made false representations on his license application. Specifically, in his application, the physician withheld information that he was currently under investigation by another state medical board and that he had resigned his prior license during the pending investigation. He also failed to notify the Board when the other state’s medical board ultimately issued a suspension.

The Board annulled the physician’s license pursuant to N.C. Gen. Stat. § 90-14(a)(3), which prohibits making “false statements or representations to the Board, or willfully conceal[ing] from the Board material information in connection with an application for a license.”

For more examples of recent disciplinary actions, you can visit the North Carolina Medical Board’s Board Actions Archive.

Contact a Raleigh Professional License Defense Attorney at Cheshire Parker Schneider & Bryan, PLLC

The professional license defense lawyers at Cheshire Parker Schneider & Bryan, PLLC provide experienced representation for physicians facing disciplinary action by the North Carolina Medical Board. To discuss your case in confidence, call our Raleigh, NC law offices at (919) 833-3114 or request a consultation online today.

 

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