Md. solo attorney disbarred for hiding assets from bankruptcy filing

Listen to this article

A Montgomery County solo practitioner was disbarred for deliberately failing to disclose assets in his bankruptcy petition, Maryland’s top court said.

Mark Kotlarsky left out information concerning his firm’s pension plan when filing for Chapter 7 bankruptcy, according to the Court of Appeals. Among the omissions was more than $50,000 transferred from his attorney trust account to his Florida-based limited liability corporation whose resident agent is his girlfriend and paralegal, the court said in an opinion filed last week.

Kotlarsky, who was admitted to the Maryland Bar in 1992, had been immediately disbarred by per curiam order April 4. He could not be reached for comment Monday.

“(Kotlarsky’s) repeated failure to respond to Bar Counsel’s inquiries regarding outstanding tax liens, his attorney trust account, and his failure to disclose assets associated with his law firm’s pension plan in his Petition for Chapter 7 Bankruptcy, warrant such a sanction,” Judge Michele D. Hotten wrote Thursday in explaining the court’s decision.

In January 2015, Citibank rejected a check from Kotlarsky because his account had insufficient funds. About a week later, Bar Counsel received a letter from Citibank saying Kotlarsky overdrafted that same account, the opinion states.

Bar Counsel asked Kotlarsky to provide an explanation and documentation about the overdraft. Kotlarsky told Bar Counsel that the account in question was an operating account, not a client trust account, and that the overdraft took place because of a stop payment, according to the opinion.

Kotlarsky provided bank statements from January 2015 for both the account in which the overdraft occurred and his attorney trust account. The statement for the attorney trust account showed Kotlarsky paid just over $53,000 to 6 Beachside LLC, a Florida limited liability company he owns. The resident agent for the company is Kotlarsky’s girlfriend and paralegal, the opinion states.

Kotlarsky told investigators the money transferred to the LLC was for his firm’s pension plan. Bar Counsel ultimately discovered Kotlarsky had applied for Chapter 7 bankruptcy and failed to disclose all of his assets in his petition, including assets associated with his pension plan. Bar Counsel also learned Kotlarsky had outstanding tax liens with the state and federal governments for $23,000. Another lien was previously filed against Kotlarsky by the U.S. National Association for $12,000, the opinion states.

Bar Counsel asked Kotlarsky for information about the tax liens but he failed to respond to three separate requests, according to the opinion. Investigators subpoenaed Kotlarsky’s bank records and asked him for more information about eight transactions in those records related to his attorney trust account and client ledgers for six individuals. Kotlarsky never responded, the opinion states.

In February, a hearing judge in Montgomery County Circuit Court found Kotlarsky committed multiple violations of the Maryland Lawyers’ Rules of Professional Conduct, and the Court of Appeals agreed.

Acting Bar Counsel Raymond Hein declined to comment on the ruling.

The case is Attorney Grievance Commission v. Mark Kotlarsky, Misc. Docket No. 30, September Term 2016.