The Review Board of the Illinois Attorney Registration and Disciplinary Commission (ARDC) has recommended disbarment for a Hinsdale attorney accused of engaging in fraud and deceit.
The Review Board's Jan. 22 decision, which affirms the May 2013 report and recommendation of the Hearing Board, follows allegations Terry Huebner mismanaged and abused $100,000 that two business partners had wired into his escrow account.
The Illinois Supreme Court suspended Huebner's license on an interim basis in October. The board's recommendation will go to the high court, which has the final say in disciplining attorneys.
Huebner's disciplinary case stems from a business venture gone sour.
In 2011, according to the ARDC, John Idzik and Thomas Longeway partnered with several other individuals to get funding to start a senior living community in Missouri. The group was going to use profits from a $200,000 investment vehicle to fund the project.
Idzik and Longeway were to contribute $100,000, with Carol Lucas contributing the remaining $100,000. Lucas recommended putting the investment in the attorney escrow account of Huebner, her attorney at the time.
The three agreed. Longeway and Idzik wired their $100,000 into an account held by Huebner in March 2011, but Lucas allegedly never deposited her $100,000 in the account.
In less than a year, the account held a negative balance.
The ARDC asserts that Huebner used the money from the escrow account for his rent, his daughter's school fees and to pay himself, as well as to give Lucas money to buy a car.
Longeway and Idzik began to question the status of the investment fund, which led them to question the status of their money. When Longeway asked the money be transferred out of the escrow account, Huebner assured him it was safe, but delayed action, according to commission documents.
Longeway eventually contacted the ADRC and police, and sued Huebner over the matter.
During questioning by DuPage County Circuit Judge Bonnie Wheaton about the status of the money during a civil trial, Huebner replied “everything is where it is, Judge.” That was in October 2011 when the ARDC asserts the fund was quickly approaching a zero balance.
Huebner told the Hearing Board he was simply doing what he was told by what he perceived as the investment holders, namely Lucas, and that any dispute over how the $100,000 was spent was between the business partners.
He maintained he was just the “fall guy,” according to commission documents.
Huebner also argued there was the lack of a specific escrow contract between the three business partners and him, despite informal agreements made over e-mail, thus negating part of the Hearing Board’s report.
“The evidence overwhelming supports the finding that Respondent understood he was to hold $200,000 in escrow and that he was holding the LLC's $100,000 in escrow,” the Review Board's report states.
“Moreover," it adds, "as noted by the Hearing Board, the absence of a written executed escrow agreement does not relieve the attorney of his ethical obligations when the attorney acts as an escrow agent.”
Before the Review Board, Huebner also argued the Hearing Board erred by barring Lucas from testifying.
Several attempts were made to obtain Lucas’ testimony, including attempts to serve her with a subpoena, before barring her testimony. The Review Board sided with the Hearing Board because of that fact, and the fact that Huebner didn’t give any specific reason for his allegation.
In the end, the Review Board affirmed the Hearing Board’s report and findings.
"We agree with the Hearing Board ... that Respondent should be disbarred for several reasons. First, Respondent's misconduct is serious. He intentionally took over $100,000 in escrowed finds for his own purposes without any justification. He then repeatedly lied and dissembled when he was asked about the funds," the Review Board report states.
Additionally, the Review Board agreed with the Hearing Board that Huebner's mitigation evidence was weak and that his conduct was aggravated.
The Review Board in Huebner's case was comprised of West Dundee attorney Benedict Schwarz II and Chicago attorneys Anna Loftus and Gordon Nash Jr.