In the Matter of James W. Davis, III

An insurance company called Coface North America agreed to pay one of its policyholders more than $3 million, but scammers hacked email communications and tricked the insurer into wiring the money to a trust account controlled by attorney James W. Davis III instead of the policyholder. Davis eventually returned most of the money after being confronted, but over $550,000 remained missing. The State Bar of Georgia brought disciplinary charges against Davis, who did not respond in time and was therefore treated as having admitted the underlying facts, including that he knowingly participated in intercepting and stealing the funds and used client money to help cover part of the shortfall. The Supreme Court of Georgia reviewed the admitted facts and the Bar's recommendation and ordered Davis disbarred.

The court held that disbarment is the appropriate sanction where an attorney, by default, is deemed to have admitted knowingly using his trust account to intercept and steal a client-related insurance payment and converting client funds to partially cover the shortfall, conduct that seriously reflects on his fitness to practice law.

The ruling removes an attorney who misused a client trust account to help carry out a multimillion-dollar wire fraud scheme, reinforcing that Georgia lawyers who knowingly convert funds and act dishonestly will lose their license to practice, protecting clients and the public who rely on attorney trust accounts.

Disbarred

1. Because Davis failed to file a Notice of Rejection after being served with the State Bar's Notice of Discipline, he was in default under Bar Rule 4-208.1(b), which means he waived his right to a hearing and the facts alleged against him were deemed admitted.
2. Those admitted facts showed Davis knowingly used his attorney trust account (called an IOLTA account, a special account lawyers use to hold client and third-party funds) to receive and help conceal a fraudulently redirected insurance payment of over $3 million.
3. The admitted facts also showed Davis used $3,500 belonging to his own clients to help make a partial reimbursement of the stolen funds to the insurer, which the State Disciplinary Board found amounted to knowingly converting client property.
4. The Board determined Davis's conduct violated Georgia Rules of Professional Conduct governing safekeeping of client property (Rules 1.15(I) and 1.15(II)) and the rule against professional misconduct involving dishonesty or fraud (Rule 8.4(a)(4)), each of which carries disbarment as the maximum sanction.
5. Applying guidance from the American Bar Association's Annotated Standards for Imposing Lawyer Sanctions, the court found disbarment generally appropriate both for knowing conversion of client property causing injury and for intentional dishonest or fraudulent conduct seriously reflecting on fitness to practice.
6. The court found this outcome consistent with prior Georgia disbarment cases involving attorneys who used fraud to misappropriate funds and defaulted during the disciplinary process, weighing Davis's extensive legal experience as an aggravating factor and his lack of prior discipline as a mitigating factor.

• attorney disbarment
• wire fraud
• trust account misuse
• State Bar of Georgia
• insurance payment interception