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Published October 25, 2012, 02:16 PM

Former Grand Forks Attorney Disbarred by Supreme Court for Forgery, Mishandling Funds

The North Dakota Supreme Court has disbarred a former Grand Forks attorney who admitted forging documents, lying to business associates and mishandling clients’ funds.

By: Mike Nowatzki, Forum Communications

The North Dakota Supreme Court has disbarred a former Grand Forks attorney who admitted forging documents, lying to business associates and mishandling clients’ funds.

Alan M. McDonagh engaged in a “very serious pattern of deceit,” the high court said in its order released Tuesday.

The court, which is in charge of lawyer discipline, said a hearing panel’s recommendation of a three-year suspension wasn’t enough.

Brent Edison, who served as disciplinary counsel in the matter, said the Supreme Court overrules the panel recommendation “from time to time.”

Disbarment is relatively rare. Before McDonagh, only a dozen lawyers have been disbarred by the state’s high court in the past decade.

According to the Supreme Court’s order, McDonagh in January 2009 sought a $150,000 line of credit from Choice Financial, intending to pledge land as collateral. Knowing the bank would require an attorney other than him to do the title opinion, he used attorney Ryan Norrell’s letterhead and forged Norrell’s signature on both the preliminary and final title.

The case culminated with McDonagh pleading guilty on Jan. 9 to a misdemeanor charge of forgery or counterfeiting in Grand Forks County District Court. He received a deferred imposition of sentence, 40 hours of community service, one year of unsupervised probation and $325 in fees, court records show.

Cass County Assistant State’s Attorney Cherie Clark prosecuted the case.

“As a member of the North Dakota bar this was offensive to me, and as a prosecutor it was a clear case of forgery, which could have resulted in harm to Mr. Norrell’s reputation,” she said Wednesday.

Among McDonagh’s other wrongdoings listed in the order:

• When he was hired in May 2006 to handle a family law matter, McDonagh failed to deposit a $3,000 advance payment into a client trust account or return any unearned portion of the payment.

• After receiving a $34,231 commission check for a land sale, McDonagh wrote checks to himself totaling $13,000 but repeatedly denied to his two business partners — one of them was Dennis Biliske, well-known Grand Forks auction company owner — that he had received payment. They eventually learned McDonagh had misapplied the funds and took action to recover their shares.

• In summer 2011, McDonagh admitted to a senior partner at the now-defunct Grand Forks-based firm Carter McDonagh & Sandberg that, as managing partner of the firm, he had used client retainers to pay firm expenses rather than depositing them into a trust account.

McDonagh admitted to misapplying $28,448 from 19 clients and gave the law firm a check for that amount along with a list of the clients entitled to refunds or adjustments. It was later discovered he’d misapplied $21,500 in funds from six others clients.

The Supreme Court placed McDonagh on interim suspension in June 2011 after a petition for discipline was filed against him.

A three-member panel of the state Disciplinary Board approved a negotiated stipulation with McDonagh, recommending he be suspended for three years, pay $8,000 in restitution, refund clients as needed and pay the costs of the proceeding.

The Supreme Court accepted the board’s recommendations except for the sanctions. Justices stated that while it’s important to promote cooperation and restitution, “the protection of the public and the profession is paramount.”

A listed phone number for McDonagh, who apparently lives in Fargo, could not be found.

His attorney in the disciplinary proceedings, Al Boucher of Grand Forks, said he no longer represents McDonagh and couldn’t provide his number.

Grand Fork Herald Staff Writer Stephen J. Lee contributed to this report.

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