NY Bar Says Attys Can't Divulge Client Fraud In Property Sale

Law360, Los Angeles (March 13, 2014, 8:25 PM EDT) -- The New York State Bar Association said Thursday that attorneys representing a buyer and seller in a real estate short sale who discovered their clients had exchanged an illegal side payment couldn’t reveal the fraud to authorities or the lender.

The attorneys discovered the fraud a day after the sale closed, when the checks written to pay the lawyers and the side payment bounced, according to the association's ethics opinion, which it posted on its website. But because each attorney learned of the fraud in the...
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