Myrtle Beach attorney David Swanner has been suspended from his law practice for two years because of mismanagement of his firm’s trust account and because he arranged loans to clients from his father without informing the clients of potential conflicts of interest those loans presented, according to a court order this week.
A complaint filed in 2011 by a local banker initiated the investigation, according to the order. That banker, who is not named in the order, contacted the state’s Office of Disciplinary Counsel — which regulates the conduct of judges and lawyers — after Swanner wrote three checks to himself from the trust account, which is supposed to safeguard clients’ funds.
An investigation showed that Swanner for years delegated monthly reconciliation of his firm’s trust account to his wife, who was not trained in accounting. During the investigation period, Swanner issued 14 checks totaling $59,485 from the trust account to himself, and those checks were not recorded in any ledger or accounting software system. That resulted in a $42,500 shortfall in the trust account.
Swanner told investigators that he wrote the checks because he believed the trust account contained sufficient fees that were owed to him for representing clients. Swanner’s practice consisted mostly of personal injury and workers’ compensation cases handled on a contingency fee basis. Settlement funds were deposited into the trust account, with some of the money paid to clients and the rest remaining in the fund to pay Swanner’s fees.
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Swanner replaced the money that was missing from the trust account during the agency’s investigation, according to the court order.
The investigation also showed Swanner occasionally arranged loans to clients with money provided by Swanner’s father. Although the promissory notes for those loans showed repayment terms and interest rates, they did not explain how interest would be calculated or whether clients would have to repay the money if no recovery was obtained in their cases, according to the order.
The disciplinary counsel noted that no complaints had been filed about the loans and that Swanner did not receive any personal benefit from the loans. Failing to disclose all of the loan terms and the potential for conflicts of interest, however, violated the rules of professional conduct for lawyers, the order states.
The disciplinary counsel also said Swanner failed to diligently pursue the appeal for a client whose workers’ compensation claim had been denied.
Contact DAVID WREN at 626-0281 or via twitter at @David_Wren_