The presiding disciplinary judge of the Colorado Supreme Court today recommended that Royal “Scoop” Daniel be immediately suspended from the practice of law in Colorado for the misuse of client’s funds.
In the recommendation to the Colorado Supreme Court, Judge William Lucero said there is reasonable cause to believe Daniel, who disappeared April 27 from his Breckenridge office, converted the funds of his clients.
The state high court could act on Lucero’s request by the end of the day.
Earlier this month, Breckenridge officials said that Daniel, 61, had been in serious debt for some time and may have been planning an international escape for months.
Search-warrant affidavits unsealed today indicate that since Daniel went missing, at least seven clients reported that he had been holding their real-estate transfer money, totaling more than $1.08 million.
Breckenridge police obtained 23 search warrants for Daniel’s house, business, SUV, storage units and computers, his cellphone company, banks and credit-card companies, seeking credit reports, credit-card and bank statements and other financial documents to build a picture of his finances.
Daniel has been the subject of a large-scale search effort since co-workers reported him missing. An arrest warrant was issued May 8 for the lawyer, but he remains at large.
In the petition for immediate suspension, Lucero told the justices that an investigation revealed Daniel took $80,303 from the proceeds of a condominium sale that had belonged to Wendy and Stacy Beaty without their permission.
The Beatys had contacted Daniel in late March to determine whether he would act as a intermediary in their potential 1031 exchange on the sale of their condominium.
According to Lucero, Daniel, without telling the Beatys, sent a letter to Jennifer Farrell of Land America, the title company that held the Beatys’ proceeds. He told Farrell he had a signed agreement with the Beatys to receive funds on their behalf. Farrell sent Daniel the money based on his representation.
Lucero said the Beatys had signed no such agreement.
In addition, Lucero said an investigation revealed that although Daniel should have been holding at least $561,571 of his clients’ money in trust, a review of his bank accounts showed they contained only $233,791.
Lucero said a police investigation also established other conduct by Daniel involving misuse of client funds.
He said a previous client, Gene Gregory of Franktown, reported to the Colorado Bureau of Investigation that Daniel had helped him in a 1031 real-estate exchange.
In that exchange, Daniel held $250,000 in trust as part of the transaction. When Gregory was ready for the money, Daniel said he could not produce it and “gave him the runaround.”
Gregory said Daniel eventually told him that he had used the money to repay other people’s 1031 monies that he had used.
Additionally, a friend, Dick Yankowski, told police he had given Daniel a $200,000 loan in 2003 on the promise that Daniel would turn over the deed to his home as collateral.
Daniel continued to make payments through March, Yankowski reported, but he now is out $192,068 because the deed of trust never was filed on the property.
And Daniel’s girlfriend, Jennifer Rathbun, indicated that Daniel had made several “questionable” online transfers from the bank where she worked as his account manager.
Staff writer Howard Pankratz can be reached at 303-954-1939 or Pankratz@denverpost.com.
