Former State Bar District Officer Disbarred

On February 1, 2007, a North Carolina State Bar Disciplinary Hearing Committee, chaired by F. Lane Williamson, warmed up for this summer’s anticipated action against Defendant Nifong by disbarring Durham attorney Teresa Smallwood. At her State Bar hearing held January 11-13, Ms. Smallwood was found guilty of several charges relating to her misappropriation of client funds and her efforts to cover up her misdeeds.

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The Order of Discipline issued by the State Bar details Ms. Smallwood’s misconduct in a 155 paragraph finding of fact. The highlights of Ms. Smallwood’s criminal conduct included embezzling $122,241.25 from one unsuspecting client’s trust account, $33,335.00 from another, and $2,454.67 from a third. In total, the State Bar noted five clients who were victimized by Ms. Smallwood.

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Tonza Ruffin

“By knowingly and willfully misapplying and converting the $122,241.25 balance of proceeds from the Ruffin loan that she was holding in trust as a fiduciary and by using those funds for her own personal benefit and for the benefit of third persons without authorization from Ruffin or from St. Luke and in violation of the express prohibition of Ruffin and of the closing instructions of St. Luke, defendant used entrusted property for her own personal benefit and for the benefit of third parties without authorization in violation of Rule 1.15-2(j); engaged in criminal conduct, embezzlement, that reflects adversely on her honesty, trustworthiness, or fitness to practice law in violation of Rule 8.4(b); and engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.

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“By failing to inform CitiFinancial that she had made a stop payment order on the $122,241.25 trust account check issued to CitiFinancial, defendant engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.” State Bar v. Smallwood

Dorothy Harris

“By knowingly and willfully misapplying and converting the $4,000.00 and the $29,335.00 disbursed by checks #s 5188 and 5228, which she was holding in trust as a fiduciary for the benefit of Dorothy Harris, and by using those funds for her own personal benefit and for the benefit of third persons without authorization from Dorothy Harris, defendant used entrusted property for her personal benefit and for the benefit of third parties without authorization in violation of Rule 1.15-2(j); engaged in criminal conduct, embezzlement, that reflects adversely on her honesty, trustworthiness, or fitness to practice in violation of Rule 8.4(b); and engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.”

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“By preparing and submitting to the State Bar a ledger card purporting to reflect that check #5228 was written to pay a medical lien when in fact no such lien was paid and when in fact defendant had knowingly and willfully misapplied the $29,335.00, defendant engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.” State Bar v. Smallwood

Clotee Gillam

“By knowingly and willfully misapplying and converting the $2,454.67 disbursed by check # 5173 that she was holding in trust as a fiduciary for the benefit of the Estate of Clotee Gillam, and by using those funds for her own personal benefit or the benefit of third persons without authorization from the Estate, defendant utilized entrusted funds for her own benefit or for the benefit of third persons without authority in violation of Rule 1.15-2(j); engaged in criminal conduct, embezzlement, that reflects adversely on her honesty, trustworthiness, or fitness to practice law in violation of Rule 8.4(b); and engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.

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“By preparing and submitting to Clerk of Superior Court a final accounting falsely representing that check #5173 was issued for "funeral expenses" of the Estate of Clotee Gilliam when defendant actually misappropriated the $2454.67, defendant engaged in conduct involving fraud, deceit, dishonesty, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.” State Bar v. Smallwood

Donald and Teresa Swindle

“By failing to reschedule the Swindles' depositions upon advance notice of their conflict, failing to attempt to reschedule the depositions after they were missed but before the case had been dismissed, failing to appear for the hearing on the motion to dismiss, and failing to take appropriate steps to resolve her scheduling conflicts and protect her clients' ability to defend against the motion to dismiss, defendant neglected a client matter in violation of Rule 1.3 of the Revised Rules of Professional Conduct.

“By failing to respond to the Swindles' telephone calls and e-mail on a timely basis, failing to discuss her failures to protect their interests in the deposition matter and in defending the motion to dismiss and failing to tell the Swindles she had failed to appear at the hearing on the motion to dismiss, defendant failed to promptly comply with the clients' reasonable requests for information, failed to keep the clients reasonably informed about the status of the matter, and failed to explain matters to the extent reasonably necessary to permit the clients to make informed decisions regarding the representation in violation of Rule 1.4 of the Revised Rules of Professional Conduct.” State Bar v. Smallwood

In addition to these five clients, the State Bar noted three additional victims of the crimes and misconduct committed by Smallwood - the legal profession, the justice system, and the State Bar itself. In her reply to the notice sent by the Bar’s Grievance Committee, Ms. Smallwood, who previously served as the State Bar’s District 6B president and briefly represented Alan Gell prior to his false conviction, was found by the Disciplinary Hearing Committee to have made several misrepresentations. These misrepresentations, as well as others made to opposing counsel and the court, were the basis for the finding that the legal profession, the justice system, and the State Bar were included among those harmed by Ms. Smallwood.

“In her response to the Grievance Committee of the State Bar, defendant indicated that she first learned the Swindles could not attend the depositions on July 30, 2003 when her office called the Swindles on July 30, 2003. In her response, defendant stated that her office offered to pick Mrs. Swindle up and bring her to the deposition and that Mrs. Swindle declined. In her response, defendant stated that she attempted to reschedule the Swindles' depositions and offered to pay the costs but opposing counsel would not reschedule. Defendants' statements to the Grievance Committee of the State Bar referenced above were false and were material. Defendant knew when she made the false statements described above that the statements were false. Defendant never corrected the false statements she had made to the Grievance Committee.”

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“By falsely stating to the Grievance Committee of the North Carolina State Bar that she had not received advance notice of the Swindles' unavailability for the scheduled deposition date due to work conflict, that her office had offered to transport Mrs. Swindle to the deposition and Mrs. Swindle declined, and that she attempted to reschedule the depositions and offered to pay costs but opposing counsel would not reschedule, defendant knowingly made false statements of material fact in violation of Rule 8.1 and N.C. Gen. Stat. § 84-28(b)(3) and engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation in violation of Rule 8.4(c) of the Revised Rules of Professional Conduct.”

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“Defendant's misconduct significantly harmed the legal profession. Defendant's neglect and failure to communicate with the Swindles caused the Swindles to feel their trust had been betrayed. The Swindles expressed a sense of distrust of the legal profession in general due to defendant's misconduct. Additionally, defendant's dishonesty with her fellow attorney, Mr. Ellis, also constitutes harm to the profession. Attorneys have a duty to deal honestly with each other. When attorneys do not do so they engender distrust among fellow lawyers, thereby harming the profession as a whole.

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“Defendant's false statements to the Grievance Committee of the North Carolina State Bar interfered with the State Bar's ability to regulate attorneys and undermined the privilege of lawyers in this State to remain self-regulating.

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“Defendant's false statement to the Court in the Swindles' case and her failure to appear for the Swindles without having followed proper procedures for notifying the Court and opposing counsel of conflicting court obligations caused prejudice to the administration of justice.” State Bar v. Smallwood

Considering that Defendant Nifong will also face a Disciplinary Hearing Committee chaired by F. Lane Williamson, it bodes well that his numerous misrepresentations to the Grievance Committee will be viewed in the same unfavorable light. If an attorney in private practice does damage to the Bar, the legal profession, and the administration of justice by making false statements to other attorneys, the Court, and the Bar, it stands to reason that similar deceit by a district attorney can only be viewed as causing greater harm to those same institutions