BEFORE THE HEARING BOARD
OF THE
ILLINOIS ATTORNEY REGISTRATION
AND
DISCIPLINARY COMMISSION

In the Matter of:

EDWARD EARLE HEARN,

Attorney-Respondent, 

No.  6194650..

 

Commission No.  07 CH 94

FILED -  August 30, 2007

COMPLAINT

Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission, by his attorney, Dorothy B. Zimbrakos, pursuant to Supreme Court Rule 753(b), complains of Respondent, Edward Earle Hearn, who was licensed to practice law in Illinois on May 7, 1987, and alleges that Respondent has engaged in the following conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute:

COUNT I
(Conversion of $60,000 of Grace Church funds related to Tanya Parks' mortgage
and breach of fiduciary duties to Grace Church and its members)

1. At all times relating to the events in this Complaint, Grace Conservative Baptist Church of Chicago ("Grace Church") was an Illinois not-for-profit organization. Grace Church was established on January 21, 1963, for the purposes of creating a place for its members to assemble, fellowship, and conduct worship services.

2. On or after June 21, 1963, Grace Church established a constitution setting forth the faith-based guidelines on which Grace Church was established and outlining, inter alia, the conditions of election and terms of office relating to the election and termination of the pastor of Grace Church.

3. The Grace Church guidelines state in pertinent part:

Section E. Election and Terms of Office

1. Pastor: The Pastor shall serve for an indeterminate term and shall be elected by a three-fourths vote of the members present at a special meeting of the church, of which public notice shall have been given to all members at least fourteen days (14) prior to the date of the meeting. The election of a pastor, or the termination of his relationship with the church, shall not be valid unless at least fifty percent (50%) of the active voting membership is present at a meeting called for this purpose.

4. In or about June 1990, Respondent was elected by the membership of Grace Church to serve as its Pastor. As an employee of Grace Church, Respondent was subject to the provisions of the Grace Church Constitution and to the provisions of the Illinois General Not-for-Profit Corporation Act of 1986.

5. As of January 1, 1987, and at all times thereafter, 805 ILCS 105/108.80, formerly Ill. Rev. Stat. ch. 32 108.80, of the Illinois General Not-for- Profit Corporation Act of 1986, stated as follows regarding loans to directors and officers:

sub. sec.105/108.80. Prohibited loans to directors and officers.

Except as permitted by subsection (e) of Section 108.75, no loan shall be made by a corporation to a director or officer except that a loan may be made to a director or officer who is employed by the corporation if authorized by a majority of the non-employed directors and either (a) in the case of a corporation organized for and holding property for any charitable, religious, eleemosynary, benevolent, educational or similar purpose, the purpose of such loan is to provide financing for the principal residence of the employed director or officer upon receipt of adequate collateral consisting of marketable real estate or securities readily capable of valuation or (b) the loan is otherwise in furtherance of the purposes of the corporation and in the ordinary course of its affairs. The directors of a corporation who vote for or assent to the making of a loan to any non-employed director or non-employed officer of the corporation, or otherwise prohibited by this Section, and any other person knowingly participating in the making of such loan, shall be jointly and severally liable to the corporation for the amount of such loan until the repayment thereof.

6. At all times relating to the events set forth herein, Article VI, Section F of the Grace Church Constitution provided that both the Pastor and several members of the Board of Deacons were officers of the corporation and that all members of Grace Church who were at least 18 years old were entitled to have a voice in, and a vote on, all matters of business.

7. At all times relating to the events set forth herein, Respondent conducted his law practice out of the offices of Grace Church and used Grace Church's address as his business address.

8. At all times relating to the events set forth herein, Tanya M. Parks ("Parks") was a member of Grace Church. At least as of August 2003, Parks was the Treasurer and Chair of the Finance Committee of Grace Church. As of December 2003, Parks was Respondent's client in a mortgage foreclosure action.

9. As a result of Respondent's position as Pastor and as an officer of Grace Church Not for Profit Corporation, Respondent was privy to confidential information about the financial condition of Grace Church, including the availability of funds held in various Grace Church accounts.

10. By reason of the trust and confidence the members of Grace Church placed in Respondent as Pastor of Grace Church and as an officer and registered agent of the corporation, Respondent had a fiduciary responsibility to Grace Church. As such, Respondent was obligated to perform his duties as Pastor and as an officer of the corporation with the highest degree of honesty, fidelity and good faith. Respondent also owed Grace Church and its members a duty to avoid placing himself in a position where his personal interests would conflict with the interests of Grace Church.

11. As a consequence of the fiduciary duties and relationships referred to in Paragraph 10 above, Respondent was prohibited from engaging in transactions that gave preference to his own interests above the interests of Grace Church, and Respondent was required to obtain permission from the Board of Deacons before disbursing any funds from the Grace Church accounts.

12. As Pastor and President of Grace Church, a not-for-profit corporation, Respondent knew, or should have known, that he had fiduciary duties to Grace Church and to all of its members and that he had a duty to act with the highest degree of fidelity, loyalty, honesty, and good faith toward Grace Church and its members.

13. Because Respondent was experiencing personal financial difficulties, Respondent requested, sometime prior to October 20, 2000, that Grace Church loan him $25,000 from the church's existing accounts. Respondent advised the congregation of Grace Church of his financial difficulties, and the church members voted and agreed to loan Respondent $25,000.

14. At no time did Respondent prepare a promissory note which disclosed the amount of the loan to be repaid to Grace Church, the amount of the interest, if any, to be paid by Respondent, or what security, if any, Respondent would provide in the event Respondent was unable to repay the loan.

15. At no time, as the Pastor of Grace Church, and as the registered agent and President of Grace Church not-for-profit corporation, with a fiduciary responsibility to the members of the church, and as an attorney licensed to practice law in Illinois, did Respondent advise Grace Church that the Illinois Not-for-Profit Corporation Act prohibited Grace Church from loaning money to officers of the corporation for personal purposes, unrelated to the church or its congregational needs.

16. As of October 20, 2000, Grace Church's real property was free and clear of any loans, liens, or debt. On or about that date, at the request of Respondent, Grace Church applied for a loan, initially in the amount of $135,000, from Shore Bank in Chicago, Illinois, using Grace Church's real property, located at 1002 E. 75th Street, Chicago, Illinois, as collateral for the loan. The purpose of the loan was to acquire and pave property adjacent to Grace Church for a parking lot and to fund the $25,000 loan to Respondent at his request as described in Paragraph __ above.

17. As part of the loan application process, Respondent, along with Associate Pastor Eduardo Allen, completed financial statements at the request of Shore Bank. The loan was to be used to buy two lots adjacent to the Grace Church real property to be used as parking lots for Grace Church members.

18. On or about October 20, 2000, Respondent submitted a financial statement to Shore Bank, on which he indicated that he practiced law on a part-time basis, that Grace Church was a not-for-profit corporation, and that the loan would be used to supplement congregational donations. Respondent did not disclose in the financial statement that at least $25,000.00 of the loan would go to Respondent to be used for his own business or personal purposes.

19. On or about December 6, 2000, Shore Bank agreed to loan Grace Church as much as $375,000, which was the appraised value of the Grace Church real property located at 1002 E. 75th Street in Chicago, Illinois. The Grace Church real property was the collateral for the loan.

20. On or about December 18, 2000, unbeknownst to any of the members of the congregation of Grace Church, and without acquiring the authority of the Board of Deacons of Grace Church, Respondent asked Shore Bank to fund a loan in the amount of $160,000 to Grace Church by signing and returning documentation to Shore Bank indicating acceptance of a $160,000 loan. The $160,000 loan was comprised of the $125,000 amount authorized by the Board of Deacons of Grace Church for the church parking lot, $25,000 authorized by the Board of Deacons for Respondent personally, and an additional $10,000 of which Respondent did not inform the Board of Deacons and which the Board of Deacons did not authorize.

21. At no time prior to February 7, 2001 did Respondent inform the Board of Deacons of Grace Church that he was seeking, on behalf of Grace Church, a loan in the total amount of $160,000 from Shore Bank.

22. On or about February 7, 2001, Shore Bank authorized a loan to Grace Church in the amount of $160,000 and Respondent executed a mortgage as a securing instrument on behalf of Grace Church, using the Grace Church real property as collateral for the loan.

23. On or about February 9, 2001, as the representative for Grace Church, Respondent attended the closing on the loan and signed a "HUD-1 Settlement Statement," "Loan Disbursement Statement," "Collateral Promissory Note," and various other documents indicating that he was the borrower. Shore Bank then disbursed a check to Grace Church in the amount of $158,710.96, which represented the remaining amount of the $160,000 loan after closing fees and interest were deducted from the total amount of the loan. Repayment of the loan was to begin on April 1, 2001, with monthly payments in the amount of $1,622.83 and a loan maturity date of March 1, 2016.

24. On or about February, 12, 2001, Respondent, or someone at his direction, caused $157,710.96 to be deposited into Grace Church's Parking Lot Fund Account No. 6092851 at Shore Bank.

25. Shortly thereafter, Respondent took $25,000 of the $157,710.96 as the loan to him from Grace Church described in Paragraph 23 above, and he used those funds for his own personal or business purposes.

26. On August 26, 2003, a "Complaint to Foreclose Mortgage" was filed against Parks by Household Finance Corporation with regard to the real property she owned at 1183 E. 83rd St. Unit 204, Chicago, Illinois. The complaint was docketed as case no. 03 CH 14212 and filed in the Circuit Court of Cook County, Chancery Division.

27. The complaint filed in case no. 03 CH 14212 alleged that Parks had defaulted on her mortgage payments as of August 1, 2002, and that, as of July 21, 2003, Parks owed the sum of $230,657.32 on the mortgage note.

28. On December 12, 2003, Respondent filed his appearance on behalf of Parks in case no. 03 CH 14212.

29. On January 13, 2004, the court entered an order granting Parks twenty-one days in which to file an answer to the complaint.

30. On February 18, 2004, pursuant to Respondent's request, the court entered an order granting Respondent, on behalf of Parks, an additional ten days in which to respond to the complaint.

31. At no time during the additional ten days or thereafter, did Respondent file an answer to the complaint on behalf of Parks in case no. 03 CH 14212.

32. On March 3, 2004, a "Judgment of Foreclosure and Order of Sale" was entered against Parks in case no. 03 CH 14212.

33. On May 17, 2004, a "Notice of Sale" was filed in case no. 03 CH 14212. Pursuant to the "Notice of Sale," the property was to be sold at public auction to the highest bidder. Parks' statutory period of redemption was to end as of June 14, 2004.

34. Between June 10, 2004 and June 21, 2004, Respondent, on behalf of Parks, made contact with a representative of Household Finance and its attorney, Ira T. Nevel, in an attempt to redeem Parks' property and to determine the amount of funds needed to redeem the property before the redemption period ended. Respondent was told on each occasion that he was required to direct a formal request in writing, by facsimile, to Household Finance before a reinstatement figure could be secured. However, after following the directions given, Respondent was unable to obtain the amount necessary to redeem the property.

35. On June 16, 2004, after receiving a bid of $226,612.05, the property at 1133 E. 83rd Street was sold. On June 24, 2004, a "Report of Sale and Distribution" was filed in Case No. 03 CH 14212.

36. On June 21, 2004, Parks received word that she had failed to redeem the property before the statutory period of redemption.

37. On June 24, 2004, attorney Ira T. Nevel, on behalf of Household Finance, filed a motion asking the court to approve the sale and grant an order of possession against Parks in case no. 03 CH 14212. On that date, the Honorable Jesse G. Reyes entered an order granting confirmation of the sale and an order of possession to Household.

38. On July 9, 2004, Respondent filed a "Motion to Vacate Order Confirming Sale" in case no. 03 CH 14212, indicating that Household Finance had refused to provide Parks with the necessary assistance needed to redeem her property. Respondent also alleged in the motion that because of Household Finance's inaction, Parks was deprived of the full statutory period of redemption and that Parks had been fully prepared, since June 10, 2004, to pay the arrearage owed to Household Finance. Respondent asked the court to vacate the sale and order of possession and to grant Parks the opportunity to pay the amount required to redeem the property.

39. On July 16, 2004, the Honorable Thomas P. Quinn entered an order in case no. 03 CH 14212 granting Respondent the opportunity to contact Household Finance to attempt to reinstate Parks' mortgage and to pay all necessary costs associated with the redemption of the property. The matter was then continued for status to July 20, 2004.

40. On July 20, 2004, Judge Quinn entered an order in case no. 03 CH 14212 that required Household Finance to supply reinstatement figures to Respondent, on behalf of Parks, within seven days. The order also gave Parks seven days thereafter to reinstate the mortgage using certified funds. The order provided that the sale and judgment would be vacated and the case dismissed in the event that Parks was able to reinstate the mortgage.

41. Some time after July 20, 2004, Respondent left the country and was not scheduled to return until August 9, 2004. Prior to leaving the country, Respondent informed Household Finance's attorney, Ira T. Nevel, of his impending absence and his inability to follow-up in case no. 03 CH 14212 until his return.

42. On or about August 9, 2004, Respondent learned that the deadline for payment of the sum required to reinstate Parks' mortgage had passed and that the Cook County Sheriff had been contacted for execution of the eviction of Parks from the property.

43. On August 19, 2004, Respondent, on behalf of Parks, filed an "Emergency Motion for Stay of Execution" in case no 03 CH 14212, regarding the impending eviction.

44. On August 19, 2004, Judge Quinn entered an order requiring Household Finance to provide the full reinstatement amount to Parks within the next three days and requiring Parks to tender to Household Finance the full amount of the reinstatement funds within twenty-four hours after that amount was obtained. The order also provided that, if Parks failed to comply, an order of eviction would issue.

45. Some time between August 19, 2004 and August 26, 2004, Respondent was informed that the amount necessary to reinstate Parks' mortgage was $59,098.52.

46. On or about August 26, 2004, Respondent, having knowledge of Grace Church's finances, authorized Grace Church member Stephanie Samuels to draft the following checks on Grace Church's Shore Bank accounts, made payable to Respondent from accounts held by Grace Church:

Check No

Date

Grace Church Acct. No.

Amount

1027

8/26/04

6092851

$43,000.00

1051

8/26/04

017449100

17,000.00

   

Total

60,000.00

Respondent characterized the distribution of the $60,000 in funds to him from Grace Church's account at Shore Bank as a "loan" to him.

47. At no time did Respondent prepare a promissory note which disclosed the amount of the loan to be repaid by him to Grace Church, the amount of interest, if any, to be paid, or what security, if any, Respondent would provide in the event Respondent was unable to repay Grace Church.

48. On or about August 26, 2004, Respondent negotiated check nos. 1027 and 1051, as described in Paragraph 46 above, at Shore Bank in exchange for Official Check No. 732541444 in the amount of $59,098.52. Check no. 732541444 was made payable to Household Finance with the remitter listed as Respondent. Respondent kept the $902.48 difference between the $60,000 in total funds he received as described in Paragraph 46 above and the $59,098.52 check to Household Finance and used the $902.48 funds for his own personal or business purposes.

49. Shortly thereafter, Respondent used the proceeds of check nos. 1027 and 1051 for his own business or personal purposes to reinstate the mortgage on Parks' property. At no time did Respondent use any of those funds for any legitimate business or other purpose of Grace Church.

50. At no time did Grace Church or any of its Board of Deacons, or any other representatives of Grace Church, authorize Respondent to use any portion of Grace Church's funds for his own business or personal purposes.

51. As of the date the Inquiry Board authorized the Administrator to file a complaint against Respondent, August 20, 2007, Respondent had not repaid any portion of the $25,000 Grace Church loan to him or of the $60,000 Grace Church funds he used to pay Parks' mortgage.

52. By the reason of the conduct described above, Respondent has engaged in the following misconduct.

  1. conversion;

  2. breach of fiduciary to Grace Church and its members;

  3. representing a client when the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interest, in violation of Rule 1.7(b) of the Illinois Rules of Professional Conduct;

  4. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct; and

  5. conduct prejudicial to the administration of justice in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct; and conduct which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770.

COUNT II
(Conversion of $26,282.79 in Personal Checks from Grace Church)

1. The Administrator realleges Paragraph 1 through Paragraph 51 of Count I above.

2. At all times related to the facts alleged in this count, Grace Church designated the use of funds contained in Shore Bank Account No. 6092851 for the purposes of securing property for parking lots adjacent to the Grace Church real property, as that account contained the remaining proceeds from the $160,000 loan borrowed from Shore Bank on February 9, 2001. Grace Church had a second account at Shore Bank, Account No. 17449100, which was designated as the "Building Fund" was to be used for the upkeep of the real property owned by Grace Church. Grace Church had a third account, Account No. 17298000, at Shore Bank, which was used for the day-to-day expenses of the church, including, payments to utilities and creditors, and payment of the Shore Bank loan. On many occasions, funds were transferred between accounts to cover expenses or overdrafts as necessary.

3. In 2004, Respondent's salary as a full time Pastor of Grace Church was $31,153.92.

4. From January 22, 2004 through December 28, 2004, Respondent caused at least an additional $26,282.79 in checks to be written to him personally from two accounts at Shore Bank, Account No. 17298000 and Account No. 1449100, not including the $31,153.92 funds he received as his full time salary, and used those funds for his own personal or business purposes, as follows:

Check No.

Date

Amount

Account No. 17298000

11282

1/22/04

$3,000.00

11246

2/19/04

1,000.00

11254

2/24/04

2,000.00

11255

2/24/05

2,000.00

11282

3/18/04

1223.46

11284

3/23/04

900.00

Check No.

Date

Amount

Account No. 17298000
11293

4/1/04

765.00

11310

4/22/04

725.00

11315

5/4/04

1,071.60

11336

5/20/04

175.00

11337

5/24/04

50.00

11338

5/25/04

100.00

11345

5/27/04

611.73

11352

6/10/04

1,223.46

11355

6/16/04

125.00

11380

7/19/04

179.49

11420

8/31/04

300.00

11424

9/2/04

611.73

11430

9/7/04

611.75

11436

9/15/04

740.88

11443

9/21/04

740.88

11446

9/28/04

740.88

11451

10/4/04

84.89

11452

10/4/04

740.88

11454

10/13/04

740.88

11456

10/18/04

740.88

11459

10/27/04

740.88

11462

10/29/04

275.00

11465

11/9/04

740.88

11471

11/12/04

100.00

 

Total

$23,060.15

Check No.

Date

Amount

Account No. 17449100

1050

8/31/04

1,000.00

1053

11/23/04

740.88

1055

12/7/04

740.88

1058

12/28/04

740.88

 

Total

$3,222.64

     
 

Total Both Accts.

$26,282.79

5. At no time did Respondent have the authority of Grace Church or its Board of Deacons to issue the checks set forth in Paragraph 4 above to himself.

6. In or about June of 2003, Grace Church began experiencing financial difficulties. The payments due to Shore Bank on the $160,000 loan ("Shore Bank loan") were periodically late through and until July of 2005. Shore Bank also began to assess Grace Church late charges in the amount of $81.14 for each month the loan payment was considered to be past due.

7. In early 2004, Tanya Parks, acting as Finance Committee Chairperson of Grace Church, prepared and released a "Grace Baptist Church Financial Ledger" reporting that the church had cash of $102,549 on hand at the end of 2003.

8. One year later, at a meeting in early 2005, Respondent stated that, with respect to income taken in during 2004, "we broke even." A "Grace Baptist Church" income report reported income for 2004 as $163,179.45. Respondent, however, refused to disclose "cash on hand."

9. On July 14, 2005, Shore Bank sent a letter to Respondent, who was a signatory on the loan, advising him that loan number 60293 was 104 days past due and that a past due amount of $6,327.92 was owed toward repayment of the loan. On July 21, 2005, representatives of Shore Bank contacted Respondent by telephone regarding the past due amount on the loan.

10. On July 22, 2005, a payment by Grace Church in the amount of $400, less than one-quarter of the scheduled monthly payment, was made toward the Shore Bank loan.

11. On August 2, 2005, Respondent met with a representative of the Shore Bank
and assured that person that Grace Church would pay half of the past due payment in two weeks, another payment in the next two weeks, and a payment every two weeks thereafter through the end of September 2005 until the Shore Bank loan was brought current.

12. On or about August 5, 2005, Respondent and Parks issued a document entitled "Financial Disclosure Report," reflecting the financial period of January to June 2005. That document indicated that Grace Church had $68,323.02 in income and $68,466.97 in expenses. The cash on hand reported under the title "Current Operational Amounts" on that document was $1,188.41, over $100,000 less than the cash on hand at the end of 2003.

13. An entry entitled "Pastor's Repayment Schedule" on the August 5, 2005 Financial Disclosure Report described in Paragraph 12 above reported the $25,000 loan described in Paragraph 20 of Count I above made in 2001 (and still unpaid) to Respondent, and also reflected the additional amount of "fund usage" by Respondent of $59,098.32 described in Paragraph 48 of Count II above. The August 5, 2005 Financial Disclosure Report did not disclose how those funds were used.

14. The members of Grace Church discovered for the first time when the August 5, 2005 Financial Disclosure Report was distributed that, in addition to the deficiency of the cash on hand, that the mortgage from Shore Bank was not being paid.

15. On August 17, 2005, after failing to receive a payment on the loan from Grace Church, Pamela D. Kenebrew, a Shore Bank representative, sent a 60-day delinquency notice to Respondent, advising him that the payments on the loan were past due and demanded a payment in the amount of $7,550.75.

16. After failing to receive any communication from Respondent regarding the August 17, 2005 delinquency notice, Dennis R. Gleason, Vice President of Shore Bank, sent a letter to Respondent advising him that the loan was in default, that all obligations had been accelerated, and that a payment in the amount of $151,083.02 was due from Grace Church within ten days after the date of the letter. The letter further advised Respondent that Grace Church would be charged $32.70 per diem thereafter if no payment was received.

17. On September 4, 2005, concerned that Grace Church funds were missing, that Shore Bank would foreclose on the property, and that Respondent was mismanaging Grace Church's funds, Deacon James Miller requested that Respondent add Miller's name to the Shore Bank accounts to investigate and protect the Church's finances. Respondent refused.

18. On September 25, 2005, thirty-four members of Grace Church, more than half of the churches voting members, conducted a special meeting for the purpose of determining whether to remove Respondent from the office of Pastor and as a member of Grace Church. All thirty-four members unanimously voted to dismiss Respondent as Pastor of Grace Church and affirmed the leadership of Deacon James Miller, Deacon Bernard Wren, and Pastor Randolph Strahan as the Governing Board of the Church.

19. On September 28, 2005, attorney Carrie A. Dolan ("Dolan"), on behalf of Shore Bank, sent a demand letter to Grace Church and to Respondent, indicating that the full amount of the loan, plus interest, was due and owing, and that Respondent, personally, and as representative of Grace Church, was liable for repayment of the loan. The letter stated that Grace Church was in arrears in the amount of $18,550.43 and that it would institute legal proceedings to foreclose on the Shore Bank Loan. The September 28, 2005 letter was the first notice that members of Grace Church received that Respondent had borrowed $160,000 from Shore Bank instead of the $150,000 he was authorized to borrow from Shore Bank, $125,000 for the parking lot, and $25,000 as a personal loan to Respondent.

20. On or about October 5, 2005, Respondent contacted attorney Dolan by telephone and stated that he would be receiving a donation from a member of the church and that he would make the loan current. Respondent stated that he would call Dolan again in a few days.

21. On or about October 21, 2005, Respondent met with M. Redd at Shore Bank and presented a check made out to Respondent from a third party, Laurette H. Martin of Madison, Mississippi, in the amount of $20,000.00. Shore Bank refused to accept the check and requested that Respondent provide the bank with certified funds. Respondent then deposited the check into Grace Church Account No. 6092851 and requested that the bank withdraw the $20,000 from the account once the funds cleared and use the funds to bring the loan current. Respondent also stated that he would pay the November loan payment as soon as possible.

22. On November 3, 2005, Shore Bank applied the entire $20,000 toward repayment of the loan. On that date, when Respondent contacted the bank to see if the funds had been applied to the loan, the bank inquired as to whether Respondent had proof of property insurance. Respondent stated that there was insurance on the church. However, Respondent had not provided proof of insurance since before June of 2002. As a result, Shore Bank had initiated a forced-placed insurance policy at a cost to Grace Church of $2,402.00 a year.

23. Between November 3, 2005 and April 2006, Respondent caused sporadic, and in many cases, partial loan payments to be made to the Shore Bank in payment of the Shore Bank loan, which in turn caused numerous late charges to be assessed on the Shore Bank loan.

24. On or about November 2, 2005, certain deacons, one pastor, and two other members of Grace Church filed a "Complaint for Injunctive and Other Relief" in the Circuit Court of Cook County, Chancery Division against Respondent, Tanya Parks, and four other members of Grace Church. The clerk of the Court docketed the matter as James Miller, et al. v. Edward E. Hearn, et al., case no. 05 CH 18756. In that matter, the plaintiffs set forth claims against Respondent for, inter alia, his misappropriation of $59,098.52 from the Shore Bank accounts of Grace Church to pay the mortgage of Tanya Parks, his failure to pay the $25,000 personal loan, his wasting and mismanaging $101,360.59 in church funds, including the checks written to himself set forth in Paragraph 4 above.

25. On October 23, 2006, the plaintiffs in case no. 05 CH 18756 moved for partial summary judgment against Respondent, Tanya Parks, and the other defendants, seeking judgment against Respondent in the amount of: $25,000 for the personal loan that Respondent had not repaid; $26,382.92 for the personal checks written to Respondent in excess of his salary; $14,185.16 in credit card charges Respondent had made on Grace Church credit cards for such personal expenses as food, clothing, various personal items, and various trips, including to the Sybaris in Frankfort, Illinois, and $59,098.02 against Respondent and Tanya Parks for the payment of her mortgage.

26. On March 15, 2007, the Honorable William Maki entered partial summary judgment against Respondent in the amount of $51,382.79, comprised of the $25,000 Grace Church loan to him which he never repaid and $26,382.92, the total of the personal checks set forth in Paragraph 4 above. Judge Maki also declared Respondent terminated as Pastor of Grace Church, and required him to turn over the keys, all church property, and vacate the premises by April 30, 2007. Finally, Judge Mackey entered judgment against Tanya Parks in the amount of $59,098.53 and imposed a constructive trust on her property in favor of Grace Church.

27. As of the date the Inquiry Board authorized the Administrator to file a complaint against Respondent, August 20, 2007, Respondent had not paid any portion of the judgment entered against him.

28. By the reason of the conduct described above, Respondent has engaged in the following misconduct.

  1. conversion;

  2. breach of fiduciary to Grace Church and its members;

  3. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct; and

  4. conduct prejudicial to the administration of justice in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct; and conduct which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770.

WHEREFORE, the Administrator respectfully requests that this matter be assigned to a panel of the Hearing Board, that a hearing be held, and that the panel make findings of fact, conclusions of fact and law, and a recommendation for such discipline as is warranted.

Dorothy B. Zimbrakos
Counsel for Administrator
One Prudential Plaza
130 East Randolph Drive, #1500
Chicago, Illinois 60601
Telephone: (312) 565-2600
Respectfully submitted,

Jerome Larkin, Administrator
Attorney Registration and
Disciplinary Commission

By:   Dorothy B. Zimbrakos