Justices disbar lawyer for theft of $150K from clients, ‘brazenness’

An Indianapolis lawyer has been disbarred for stealing about $150,000 from his clients, “disclosing client confidences for purposes of both retaliation and amusement, threatening and intimidating his office staff (and) lying pervasively to all comers,” according to the Indiana Supreme Court.

David J. Steele had been under emergency interim suspension since Sept. 4, when he tendered an affidavit consenting to discipline for eight counts alleging violations of rules of professional conduct. In a per curiam opinion issued Tuesday, justices adopted the allegations in the Disciplinary Commission’s verified complaint and “conclude without hesitation that (Steele) should be disbarred.”

The court identified 16 rule violations from charging an unreasonable fee to lying to the commission. Aside from cheating clients, justices wrote Steele brandished a gun while he fired an office manager about whom he concocted wild stories concerning the staff member’s sexual orientation.

“The seriousness, scope, and sheer brazenness of (Steele)’s misconduct is outrageous. He stole approximately $150,000 from his clients, threatened and intimidated his staff, disparaged and mocked virtually everyone around him, lied to all comers, and obstructed the Commission’s investigation.  Perhaps most disturbingly, Respondent repeatedly and fundamentally breached the duty of confidentiality that lies at the heart of the attorney-client relationship,” justices wrote.  

The court found Steele misappropriated about $150,000 of client funds from his attorney trust account. He “redirected most of these unearned fees into his personal or operating account although he sometimes ‘peel(ed) off a few hundred dollars’ to give to his employees as a ‘spot bonus.’”

Steele also typically charged clients a deposit of $2,500 to $3,500 at the beginning of a representation, then “vigorously enforced” non-refundable fee provisions. He “instructed his office staff to inflate billable hours and rates by a variety of means,” justices wrote.

“Numerous clients requested refunds of unearned fees,” the opinion says, “which (Steele) was unable to provide because he had stolen virtually all the funds contained within his trust account.” In other cases, Steele refunded portions of client fees with advance payments collected from other clients.

Much of the evidence against Steele came from his office manager referred to in the opinion as JD. Steele “attempted to persuade JD and others to go along with these practices and frequently reminded JD that (Steele) had fired the prior office manager when that person had questioned” his unethical conduct.

Steele fired JD after just two and a half months, at which time JD reported his former boss to the Disciplinary Commission. Steele retaliated in threatening texts, including one in which he wrote, “No one will ever hire you if (I) get disbarred for something you told them. You think lawyers want someone in their office who tried to get their last boss disbarred?”

Justices wrote Steele also lied to the commission by telling them JD was fired for having sex with another man in the office and for using “the firm’s website to post disparaging comments about the gay community.

“Additionally, (Steele) brandished a handgun when he terminated JD’s employment, and … instructed an associate attorney who witnessed this incident to lie about this fact to the Commission,” the order says.    

Steele also told his staff to “lie to all comers” about his whereabouts and other matters, justices wrote, including falsely telling opposing counsel he was in a hospital waiting room watching a loved one die of cancer or that his dog had just died. “Respondent made false statements to the Commission during its investigation that, by Respondent’s own description, were ‘virtually pathological in frequency and scope,’” justices wrote.

In other counts, Steele was found to have incentivized positive client reviews on his Avvo.com profile and punished people who posted negative reviews by disclosing confidential information. He is also accused of recording conversations of clients and potential clients for his amusement, sharing them with staff and relatives. He “openly mocked these recorded individuals in his conversations with others and in a meeting with the Commission,” the opinion says.

Steele operated Steele Legal Group LLC, a family law practice in the northern Indianapolis suburbs. He had been licensed to practice since 2003 and had no prior disciplinary history.