Statement of Charges Allowed by the Illinois Supreme Court
and Imposing Discipline on Consent

Allowed January 12, 2018

IN THE SUPREME COURT OF ILLINOIS

In the Matter of:

RAJESH KANURU,

Attorney-Movant

No. 6286540.

 

Supreme Court No. M.R.29088

Commission No. 2017PR00117

 

STATEMENT OF CHARGES PURSUANT TO
 SUPREME COURT RULE 762(a)

Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission, by his attorney, Lea S. Gutierrez, pursuant to Supreme Court Rule 762(a), states that on the date Rajesh Kanuru (hereinafter "Movant") filed a motion requesting his name be stricken from the Roll of Attorneys, the Administrator was investigating allegations that Movant converted funds belonging to multiple clients, including at least $700,000 belonging to the five clients described below, often using the proceeds from one settlement to pay other clients whose funds Movant had converted earlier. At the time this statement of charges was filed, the clients described herein, whose settlement funds Movant converted, had either received none of the proceeds to which they were entitled or had received only a small portion of those proceeds. Had Movant's conduct been the subject of a hearing, the Administrator would have introduced the evidence described below, and that evidence would have clearly and convincingly established the misconduct set forth below:

  1. FACTUAL BASIS

Movant's admissions, bank records, court orders and records, and the testimony of various former clients, would establish the following facts:

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Movant's Background

1. Movant was admitted to practice law on November 10, 2005, is the principle lawyer in his firm (Kanuru Law Group P.C.) and had two associates during the period of time of the matters described in this statement of charges. Movant represented clients in personal injury as well as worker's compensation matters.

2. During the period of time alleged in this statement of charges, Movant had an IOLTA account at MB Financial Bank, ending in the four digits 0160 ("MB Bank IOLTA"), and an IOLTA account at Private Bank, ending in the four digits 4961 ("Private Bank IOLTA").

3. On or about September 20, 2017, Movant abandoned his practice, providing no notice to clients whose legal matters he had been handling, including clients whose matters had been settled and for which he had received, but not yet disbursed, settlement proceeds.

4. Between June 2016 and September 2017, Movant received funds in settlement of client matters, whose proceeds he subsequently converted. Movant's representation of those clients and his conversion of their settlement funds are detailed below.

Conversion of proceeds of worker's compensation settlement-Jose Rodriguez

5. On September 15, 2014, Movant filed a worker's compensation claim on behalf of Jose Rodriguez ("Rodriguez"), against Rodriguez's employer CabinetPro, Inc., in the Illinois Worker's Compensation Commission. Movant agreed to accept 20% of any recovery as his fee.

6. Prior to June 2016, Movant and counsel for CabinetPro, Inc. agreed to settle Rodriguez's claim against the company for $387,000, plus $106,894 for future medical expenses, for a total of $493,894. The payments were to be made by way of two checks, one for $387,000 and the other for $106,894. Movant offered to pay Rodriguez $350,000 from the first settlement check, and told Rodriguez that Movant was required to hold the entirety of the proceeds of the

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second check for Rodriguez's benefit, to draw upon as Rodriguez incurred further medical costs. On June 24, 2016, Movant received and deposited into his Private Bank IOLTA account a check from CabinetPro's insurer in the amount of $387,000. On July 18, 2016, Movant drew a $75,000 check on his Private Bank IOLTA account as a partial distribution to Rodriguez. On September 26, 2016, Movant received and deposited a second check from the insurance company in the amount of $106,894. By November 29, 2016, Movant had caused the balance of his Private Bank IOLTA account to fall to $289.45 by making various withdrawals and transfers without authorization. As of the date this statement of charges was filed, Movant had not distributed any of the remaining settlement proceeds, in the amount of $381,894, to or on behalf of Rodriguez. Movant's use of those funds constitutes conversion.

Conversion of proceeds of worker's compensation settlement-Rafael Cavillo

7. On August 28, 2014, Movant filed a worker's compensation claim on behalf of Rafael Cavillo ("Cavillo"), against Cavillo's employer, Groot Industries, Inc., in the Illinois Worker's Compensation Commission. Movant agreed to accept 20% of any recovery as his fee.

8. In August 2016, Movant and counsel for Groot Industries agreed to settle Cavillo's claim for $300,000. On August 8, 2016, Movant filed a settlement statement in the case which stated that Movant's fees and costs for representing Cavillo totaled $53,745.38, and that Cavillo was entitled to $246,254.62. Movant later received a $300,000 check from Groot Industries' insurer, which he deposited into his MB Financial Bank IOLTA account. Between August 1, 2016 and October 31, 2016, Movant transferred at least $280,000 in funds, including funds due to Cavillo, from that IOLTA account to his Private Bank IOLTA account. As of December 12, 2016, the balance in Movan's MB Financial Bank IOLTA account fell to $312.17. On or about October 7, 2016, Movant disbursed $40,000 to Cavillo by way of a check drawn on

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his Private Bank IOLTA account. By November 29, 2016, Movant had caused the balance of the Private Bank IOLTA account to fall to $289.45 by making various withdrawals and transfers without authorization. As of the date this statement of charges was filed, Movant had not distributed any of the remaining $206,254.62 in settlement proceeds to or on behalf of Cavillo. Movant's use of those funds constitutes conversion.

Conversion of proceeds of worker's compensation settlement-Niessie Linzy

9. On April 27, 2015, Movant filed a worker's compensation claim on behalf of Niessie Linzy ("Linzy"), against her employer, Whole Foods Market, in the Illinois Worker's Compensation Commission. Movant agreed to accept 20% of any recovery as his fee.

10. In February 2017, Movant and counsel for Whole Foods Market agreed to settle Linzy's claim for $62,000. Movant then received from Whole Foods's insurer a check in that amount, forged Linzy's signature to the rear of that check and deposited it into his Private Bank IOLTA account. Pursuant to the fee agreement, Movant was entitled to only $12,665 of the $62,000 in fees and costs, and the remaining $49,375 was owed to Linzy. By April 10, 2017, Movant had caused the balance of his Private Bank IOLTA account to fall to $3,831.25 by making various withdrawals and transfers, without Linzy's authorization. Movant had not, by that date, informed Linzy that he had received settlement funds on her behalf. Linzy learned of the settlement and was forced to hire counsel to seek the return of the settlement funds from Movant. On or about August 16, 2017, Movant drew a check payable to Linzy on his Private Bank business account in the amount of $49,375, which was later returned due to insufficient funds. Movant's use of those funds constitutes conversion. In August 2017, Linzy retained new counsel to investigate and pursue any claims Linzy might have had against Movant. On October

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6, 2017, Movant caused his attorney to issue a check to Linzy in the amount of $49,375, representing the remaining settlement proceeds owed to Linzy.

Conversion of proceeds of worker's compensation settlement-Derrick James

11. On August 9, 2010, Movant filed a worker's compensation claim on behalf of Derrick James against James' employer Ford Motor Company ("Ford") in the Illinois Worker's Compensation Commission. Movant agreed to accept 20% of any recovery as his fee.

12. In August 2016, Movant and counsel for Ford agreed to settle James' claim against Ford for $26,488. Movant had not sought or obtained James' authority to settle his claim, nor did Movant ever inform James of his receipt of the settlement funds. When Movant received the settlement check, he forged the James signature to the rear of the settlement check, and deposited the check into his Private Bank IOLTA account. By November 29, 2016, Movant had caused the balance in that IOLTA account to fall to $289.45 by making various withdrawals and transfers, without James' authorization. After settling James' claim, Movant falsely informed James on at least three occasions that his claim was still pending. As of the date this statement of charges was filed, Movant had not distributed to James any portion of James' settlement proceeds. Movant's use of those funds constitutes conversion.

Conversion of proceeds of worker's compensation settlement-Eleanor Davis

13. On March 15, 2013, Movant filed a worker's compensation claim on behalf of Eleanor Davis ("Davis") against her employer, United Parcel Service ("UPS"), in the Illinois Worker's Compensation Commission. Movant agreed to accept 20% of any recovery as his fee.

14. In April 2017, Movant and counsel for UPS agreed to settle Davis' claim against UPS for $97,300. Movant then received the following checks from UPS's insurer: two checks payable to Eleanor Davis (in care of Movant), in the amounts of $79,459 and $1,500, and a third

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check payable to Kanuru Law Group in the amount of $16,341, which represented payment of Movant's legal fee. On or about April 12, 2017, Movant forged Davis' signature to the rear of the checks and deposited the checks into his Private Bank IOLTA account. After receiving and depositing all three settlement checks, Movant falsely informed Davis in a telephone call that the settlement checks had been "shredded" in the United States Mail and had to be reissued, which would result in additional delay in disbursing the funds to her. As of August 22, 2017, Movant had caused the balance of his Private Bank IOLTA account to fall to $249.93 by making various withdrawals and transfers, without Davis' authorization. As of the date this statement of charges was filed, Movant had not made any distribution to or on behalf of Davis of the $80,959 in settlement funds to which she is entitled. Movant's use of those funds constitutes conversion.

Med pays received from the law Office of Glen Lerner

15. Between at least September 2016 and April 2017, the Law Office of Glen Lerner referred several client matters to Movant.

16. Between September 2016 and April 2017, the Law Office of Glen Lerner received, and sent to Movant, the following checks, which were provided to Lerner as medical payments on six client matters which had been referred by Lerner to Movant, and which were deposited by Movant into one of his IOLTA accounts, as set forth below:

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17. The medical payments that Movant received from Lerner represented funds immediately due to Movant's clients pursuant to the terms of the policies they had with their respective insurers. On August 22, 2017, prior to making any disbursement of the funds he received from Lerner, as set forth in paragraph 16, above, the balance of Movant's Private Bank IOLTA account fell to $249.93. As a result, Movant had used, without authority, $19,680.70 of the medical payments. Movant's use of those funds constitutes conversion.

18. As of the date this statement of charges was filed, Movant had not distributed any portion of the above medical payments he had received from Lerner to the clients or their medical providers.

Misrepresentation to and theft of funds from attorney Coston

19. As of September 2017, Patricia Rademacher Coston shared office space with Movant.

20. Around September 14, 2017, Movant falsely stated to Coston that he had paid on Coston's behalf her $5,400 rent payment to the office of the building in which their respective offices were located. Based on that representation, Coston agreed to "reimburse" Movant for the payment and wrote Movant a check payable to Kanuru Law Group PC in the amount of $5,400.

21. Movant's statement to Coston that he had paid her rent on her behalf was false and Movant knew that the statement was false when he made it. Movant had not paid Coston's rent prior to (or after) September 14, 2017, and at the time Movant accepted Coston's check, Movant had a $50,000 arrearage in rent payments for his own office space.

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22. Movant deposited Coston's check into his Private Bank business account on September 14, 2017, and as of September 29, 2017, Movant's Private Bank business account was overdrawn by -$2,995.47.

  1. CONCLUSIONS OF MISCONDUCT

23. As a result of the conduct described above, Movant has engaged in the following misconduct:

  1. failing to hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property, by conduct including commingling and converting the settlement proceeds due to Rodriguez, Cavillo, Linzy, James, Davis, and over $18,000 in medical payments on behalf of the five clients which were sent to him by referring attorney Glen Lerner, for a total of over $700,000 in client funds, which Movant used, without authority, for his own business and personal purposes, in violation of Rule 1.15(a) of the Illinois Rules of Professional Conduct (2010);

  2. failing to promptly notify and deliver to clients funds that the client is entitled to receive, by conduct including failing to timely distribute to Rodriguez, Cavillo, Linzy, James and Davis funds to which they were entitled, in violation of Rule 1.15(d) of the Illinois Rules of Professional Conduct (2010); and

  3. conduct involving dishonesty, fraud, deceit or misrepresentation, by: knowingly misappropriating over $700,000 in client funds from at least five different settlements which he used for his own business or personal purposes without authority; forging the names of Linzy, James and Davis to settlement checks without their permission; falsely informing Davis that her checks had been destroyed in the mail; by misappropriating medical payments sent to him by the office of Glen Lerner in five other client matters; and by accepting a check from Coston based on the false statement that he had already paid her portion of the rent for their shared offices space, all in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010).

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Lea S. Gutierrez
Counsel for Administrator
130 East Randolph Drive, Suite 1500
Chicago, Illinois 60601
Telephone: (312) 565-2600
Email: lgutierrez@iardc.org

Respectfully submitted,

Jerome Larkin, Administrator
Attorney Registration and
Disciplinary Commission

By:  /s/Lea S. Gutierrez
           Lea S. Gutierrez