On Friday, October 27, 2023, the District of Columbia Court of Appeals Board on Professional Responsibility recommended the disbarment of Attorney James C. Bailey due to his alleged violations of the Professional Conduct Rules.
The case is titled ‘In the Matter of James C. Bailey’ with case no. 22-BD-037.
Attorney Bailey allegedly violated Rule 1.15(a) of the Professional Conduct by engaging in intentional or reckless misappropriation, commingling, and failing to keep complete records of IOLTA account funds for five years after the firm’s representation ended.
The District of Columbia Rules of Professional Conduct can be found here.
James Bailey was a partner at Bailey & Ehrenberg law firm and the signatory on the firm’s IOLTA and operating bank accounts in early 2018. In November 2017, the DC Superior Court ordered $867,000 to be deposited in the firm’s IOLTA account as part of an ongoing housing dispute involving Fannie Mae.
From January to September 2018, Bailey made over a dozen improper transfers from the IOLTA to cover shortfalls in the operating account. On January 3, 2018, he transferred $5,000 and $10,000 on January 11, 2018, dropping the IOLTA below $867,000 both times. In mid-January 2018, Bailey replenished the account with other client funds after Fannie Mae requested balance confirmation.
Over the next several months, Bailey continued to access the IOLTA to bail out the operating account, repeatedly allowing the balance to fall below the court-ordered $867,000 minimum. These transfers included $2,375 on February 15, 2018, $4,750 on February 20, 2018, $2,250 on February 28, 2018, $11,275 on March 6, 2018, and $8,250 on March 7, 2018.
The operating account was overdrawn frequently during this period due to Bailey’s actions. He covered one such overdraft on February 27, 2018, with another IOLTA transfer on February 28, 2018. The case was settled in September 2018 and the $867,000 was ordered released to Fannie Mae, which Bailey complied with on September 19, 2018.
However, on October 9, 2018, Eagle Bank notified authorities that Bailey’s IOLTA was again overdrawn. This led to an investigation of Bailey, during which he failed to fully cooperate or disclose records. On July 11, 2022, Bailey was formally charged with misappropriation, commingling, and bookkeeping violations for his repeated improper drainage of client funds held in the IOLTA to benefit his operating account and personally cover deficits.
On October 13, 2023, Attorney James C. Bailey executed an affidavit consenting to disbarment from the District of Columbia Bar.
On October 27, 2023, the District of Columbia Board on Professional Responsibility considered Disciplinary Counsel’s motion to accept Bailey’s consent to disbarment. The motion was accompanied by Bailey’s signed affidavit consenting to the disbarment.
The Board reviewed Attorney Bailey’s affidavit as required by Rule XI, Section 12(b) of the District of Columbia Bar Rules and found that the affidavit complied with the requirements of Rule XI, Section 12(a) regarding consent to disbarment. Specifically, Attorney Bailey acknowledged the pending disciplinary charges against him and consented to disbarment freely and voluntarily.
In its report, the Board recommended that the D.C. Court of Appeals enter an order disbarring Bailey based on his consent. The Board also recommended drawing Bailey’s attention to the requirements to demonstrate his compliance with Rules XI, Sections 14 and 16 after disbarment. This included filing an affidavit under Section 14(g) certifying that he provided required notices to clients and attorneys. Only after complying with all requirements would the period of disbarment begin for purposes of any potential future reinstatement.
The recommendation reads:
“The Board, acting through its Chair, and pursuant to D.C. Bar R. XI, § 12(b)and Board Rule 16.2, has reviewed Respondent’s affidavit of consent to disbarment and finds that it conforms to the requirements of D.C. Bar R. XI, § 12(a). Accordingly, the Board recommends that the Court enter an order disbarring Respondent on consent pursuant to D.C. Bar R.XI, § 12(b).”
According to Avvo, Attorney James C. Bailey is an employment and labor attorney. He acquired his license to practice in the District of Columbia in 1999.
A copy of the original filing can be found here.