La Jolla lawyer disbarred for taking more than $725,000 in trust funds

A La Jolla lawyer who once represented the wife of disgraced Congressman Randy “Duke” Cunningham was disbarred Oct. 28 for misappropriating more than $725,000 from a family trust and partnership. JAMES A. MACY [#57677], 64, lost his license for also not complying with a disciplinary order stemming from his admission that he mishandled funds belonging to Nancy Cunningham.

In that case, Cunningham hired Macy to handle a variety of issues arising from her husband’s arrest, including disputes with the IRS and a civil forfeiture action. (Cunningham resigned his seat in Congress in 2005 after pleading guilty to taking more than $2 million in bribes.) Mrs. Cunningham gave Macy $31,000 cash and a check for more than $98,000 to hold until the federal government determined if it had a claim to the funds. In the end, Macy claimed legal fees of more than $158,000.

He was suspended and placed on probation in 2010 after stipulating that he failed to account for or properly maintain client funds and that he placed the cash in his safe rather than in a client trust account. As part of the discipline, Macy was ordered to comply with rule 9.20 of the California Rules of Court by submitting to the bar court an affidavit declaring that he notified his clients, opposing counsel and other interested parties of his suspension. He didn’t submit the affidavit. Failure to comply with the rule is grounds for disbarment.

Later the same year, the bar charged Macy with a variety of offenses for his handling of a family trust and partnership and in a default proceeding, the bar court found he committed two acts of misconduct.

He was co-trustee with his mother of a trust his parents created for their four children.  Macy and his mother also created a family limited partnership, Macy Investments, L.P., that held $1.6 million, the family’s summer home in Big Bear and miscellaneous cash and securities. When his mother died, Macy became sole trustee of the trust and general partner of the partnership, and spent approximately $725,424 on personal expenditures that amounted to more than his interest in the trust. Among other things, the money was spent to pay off a personal litigation settlement to a law partner and to pay a secretary, his mortgage, his son’s college tuition and medical bills, and he bought a new car.

When Macy’s father died, he was to distribute the estate equally among himself and his three siblings. He made an unsecured $50,000 loan to a friend whose business rehabilitated and resold residential property and later invested another $20,000 in the friend’s business with trust fund money. He asked to receive a priority position relative to other investors, including the trust. No principal or interest was ever collected on the loan.

Macy refused his siblings’ repeated requests for information about the accounts and they eventually had him removed as trustee. When his brother complained to the bar that Macy mishandled both the trust and partnership funds, Macy did not answer an investigator’s questions.

Bar court Judge Richard Platel recommended Macy’s disbarment for committing acts of moral turpitude by misappropriating funds. He “willingly abandoned his fiduciary duties owed to his father and siblings in exchange for his own financial benefit,” Platel wrote, adding that Macy “simultaneously demonstrated an inability or unwillingness to comply with the professional obligations and rules of court imposed on California attorneys.”