Robbing Peter to pay Paul

Yesterday the Supreme Court of Florida reported to Historic City News that they had disciplined 19 attorneys; including local attorney Jay Floyd.

This is a story with no happy ending; only a word to the wise in a depressed economy and a warning not to tempt an honest man.

Attorneys are subject to the jurisdiction of the Supreme Court of Florida and the Rules Regulating The Florida Bar. In addition to numerous other requirements, a lawyer is required to hold in trust, separate from the lawyer’s own property, any property connected with representing clients or third persons. Specifically, all money in a lawyer’s possession, connected with representing a client, must be kept in a separate bank account from the lawyer’s operating funds.

Jay Floyd was licensed to practice law in Florida after he was admitted to The Bar on October 26, 1990 — the same year that he graduated the University of Maryland School of Law. He was admitted to practice before the U.S. Court of Appeals for the Eleventh Circuit, U.S. District Court, Middle District of Florida, and the U.S. District Court, Northern District of Florida.

44-year old Floyd, who operated a solo law practice, began an “of counsel” relationship with the firm of R.J. Larizza and Associates P.A. in March of 2008.

Following a December 23, 2008, court order, on April 15, 2009, The Florida Bar reported that, according to an emergency suspension order, Jay Charles Floyd “appeared to be causing great public harm by misappropriating funds from his trust account.” In one instance, a check for $11,000 written on Floyd’s trust account was returned due to insufficient funds.

During 2008, Floyd represented Patricia Thompson in a disability insurance dispute. On July 28, 2008, Floyd deposited settlement funds into his trust account in the amount of $25,000.00; received on behalf of Ms. Thompson. According to court documents, Floyd used the settlement funds to pay an unrelated obligation; leaving an insufficient balance in his trust account to honor the obligation owed to Ms. Thompson.

Ms. Thompson was entitled to receive a total of $22,500.00 from the settlement. On August 5, 2008, the balance in Floyd’s trust account was $11,588.43. On August 6, 2008, the amount in Floyd’s trust account was insufficient to pay the full settlement due Ms. Thompson, so, Floyd wrote trust account check 3373 to Ms. Thompson in the amount of $11,000.00.

On August 7, 2008, Floyd wrote a second trust account check number 3374 to Ms. Thompson in the amount of $11,500.00; representing the balance she was owed. That same day, Ms. Thompson negotiated check 3374 with Bank of America, who honored the check — despite the fact that it overdrew the trust account by $11.57.

On August 11, 2008, Ms. Thompson presented Floyd’s trust account check number 3373 for payment. That check was returned due to insufficient funds.

Floyd’s trust account remained overdrawn until August 14, 2008, when he deposited $25,000.00 into it from an unidentified source.

In a second matter, Floyd received a personal injury settlement in the amount of $5,500 intended for Robert Russakoff; the brother-in-law of now State Attorney R. J. Larizza. Floyd admitted to misappropriating the money for his personal use.

Jay C. Floyd, and in some cases, his wife Theresa Ann Navins Floyd, have been subject to Federal tax liens filed by the Internal Revenue Service in recent years, including 6/22/2009 Amount: $24,930 Volusia County Circuit Court, 3/25/2008 Amount: $27,041 Volusia County Circuit Court, Release Date: 8/19/2008, 8/24/2007 Amount: $86,642 St Johns County Circuit Court, 8/31/2005 Amount: $13,346 Volusia County Circuit Court, Release Date: 10/31/2005, 8/31/2005 Amount: $25,220 Volusia County Circuit Court, Release Date: 2/27/2006, 9/18/2000 Amount: $14,812 Duval County Circuit Court, Release Date: 2/27/2006.

There is an old analogy of “Robbing Peter to pay Paul”. As officers of the court, we trust attorneys to be honest in their business dealings with their clients, however, attorneys are people — just like everyone else. Today’s economy may get worse before it gets better and attorneys are not exempt from the financial pressures affecting us all. With the IRS breathing down your neck, even an honest man can be tempted to make a desperately wrong decision.

After a 19-year career as an attorney, Jay Charles Floyd finds himself disbarred. According to Karen Kirksey at The Florida Bar, once disbarred, fewer than 5 percent of those attorneys ever seek readmission. Floyd can not reapply before 5 years and until all court-ordered restitution and outstanding disciplinary costs have been paid.