WALNUT CREEK -- Attorney and decorated Vietnam War veteran Eugene Hannon has been recommended for disbarment after the State Bar of California found he misappropriated more than $28,000 in client's trust funds for his own use.
Hannon argued that he suffered from Post-Traumatic Stress Disorder, alcoholism, numerous ailments and other family issues that led to his behavior. But a state bar judge in San Francisco found him culpable on four of five counts stemming from a family court case he started litigating a decade ago.
Judge Lucy Armendariz ruled Wednesday the misappropriation of client funds is a "grievous breach of an attorney's ethical responsibility."
The state bar considers any misappropriation of more than $25,000 as a "major" violation, which warrants a consumer alert on the attorney's online profile.
On Saturday, Hannon will be involuntarily placed on the state bar's inactive list, meaning he cannot practice law in the state. The California Supreme Court will have the final say on whether Hannon should lose his law license.
Hannon, reached Friday, referred questions to his attorney William Balin.
"He's disappointed. He knew these were serious charges," Balin said.
The charges stemmed from an unmarried Alameda couple's dissolution settlement agreement in which the father, who Hannon represented, was supposed to deposit $55,000 into a trust for his three children. He sent Hannon more than $28,000 in monthly
"It's a lot of money to three minor children who were counting on that money to pay for their college educations," senior trial counsel Sherrie McLetchie said.
He also was found culpable of three counts of moral turpitude by telling the woman's attorney he hadn't spent the money, overdrafting his client's trust account and bouncing three checks.
Hannon admitted to much of this, but maintained he did not intentionally spend the money, but instead was just careless.
Hannon suffered from numerous health conditions, including nearly dying from an intestinal blockage, and stress from family issues and a house fire, his attorney said. The "heavily decorated Vietnam War veteran," who served from 1966 to 1969, had a clean record over 28 years of litigating and suffers from post-traumatic stress disorder and depression, along with alcoholism, according to the ruling.
The mother of the children has sued Hannon in civil court to recoup the money, but no funds have been returned, the court found. There have been no criminal charges filed.
"His health is bad, his income is down and he's not been able to get the money together," Balin said.
Hannon has until Saturday to file a motion to delay the order to place in on the inactive attorney list. Balin said it will be hard to make that deadline, but they plan to delay the ruling because Hannon is scheduled for trial Aug. 8.
He also has 30 days from the Wednesday ruling to appeal the disbarment recommendation to the state bar review department. If that deadline passes, the state bar will send the recommendation to the state Supreme Court.
Contact Matthias Gafni at 925-952-5026. Follow him at Twitter.com/mgafni.