IL State Rep Candidate Once Censured For 'Mishandling Client Funds'

OAK LAWN, IL — An Oak Lawn attorney running in the upcoming Democratic primary for Illinois state representative was once censured by the Illinois Supreme Court over claims that he used a client’s settlement funds for his own personal and business expenses.

Rick Ryan is one of two candidates seeking the Democratic nomination to represent the 36th District in a contentious race with Sonia Anne Khalil. The seat is currently represented by Kelly Burke, who decided not to seek another term in the state legislature.

The 36th District includes all or parts of Palos Hills, Palos Park, Palos Heights, Oak Lawn, Chicago Ridge, Worth, Evergreen Park, and Chicago’s Beverly, Wrightwood and Mount Greenwood neighborhoods.

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According to the Illinois State Bar Association, Ryan was censured in 2013 by the Illinois Supreme Court over allegations that he mismanaged client funds when he withdrew fees earned in a case before depositing his client’s settlement funds.

A censure is a reprimand by a body administering ethics rules. The violation is not so serious as to warrant a suspension or debarment that would affect an attorney’s authority to continue practicing law, according to the Illinois Attorney Registration and Disciplinary Commission.

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Ryan described being censured as similar to a “traffic ticket.”

“It’s the least amount of things they [the Illinois Supreme Court] can do to you,” Ryan said. “Most people have common sense, so I’m not worried about it.”

In a complaint filed before the hearing board of the ARDC, Ryan agreed to represent Walter Kroll, who was referred to him by a colleague. Kroll required rehabilitation for injuries he suffered from a car accident. A separate underinsured motorist claim was also filed against Kroll’s insurer.

In May 2003, the parties agreed that Ryan and his colleague would be paid one-third of any settlement, unless the case went to trial or was settled within a week of the trial, in which case, the attorneys would receive 40 percent of the settlement or verdict.

Sometime in 2003, Ryan received notice that a physician with Chicago Pain Medicine Center, placed a lien of $11,640 from any of the proceeds recovered on Kroll’s behalf related to his client’s accident the previous November.

The claim was settled in December 2003 by Ryan on Kroll’s behalf with the other driver’s insurer, Progressive Halycon Insurance Co., for $20,000. Ryan received and distributed funds from the settlement to his colleague for attorney fees and other certain lien holders, including Maximum Rehabilitation Services. The balance went to Kroll, the complaint said.

A few years later in February 2005, Ryan settled a separate underinsured motorist claim on Kroll’s behalf with Kroll’s insurer, AllState Insurance. Ryan received a check for $30,000 from AllState. The check was deposited into an escrow account at Founders Bank that Ryan used for the deposit and disbursement of client funds, or other third parties, involved in his cases.

At most, the complaint maintains that Ryan was entitled to $10,000 for attorney fees according to his agreement with Kroll, leaving Kroll with a balance of $20,000. In September 2005, Ryan withdrew $4,375 from Kroll’s underinsured motorist claim, which he paid to his colleague.

Further, in August 2005, Ryan offered to pay Chicago Pain Medicine Center $1,840 from Kroll’s underinsured motorist proceeds to settle the clinic’s lien.

Later that fall, Ryan is alleged to have withdrawn $16,833 from Kroll’s underinsured motorist settlement, $5,625 of which was used for attorney fees in connection to Kroll’s case. The complaint maintains that Ryan used $11,208 for other attorney fees unrelated to Kroll.

Between September 2005 and February 2008, the complaint alleged that Ryan had used $4,797 from his client fund escrow account for business and personal expenses unrelated to Kroll’s case and without Kroll’s knowledge.

“The [medical clinic] wanted more money than they were entitled to,” Ryan said. “We refused to pay until the [medical clinic] took what we offered.”

While holding the $20,000 check, Ryan said balance dipped before he was able to deposit it into the client fund escrow account.

“The next day I saw the check still sitting on my desk,” he said. “It was an accounting error. ”

By January 2009, the complaint stated that Ryan still had not paid any of the settlement funds to lienholder Chicago Pain Medicine Center. The medical clinic filed a lawsuit against Ryan in Cook County Circuit Court over allegations that he failed to pay the physician’s lien funds of $1,840. The complaint requested a judgment in that amount, plus attorney fees and damages.

Ryan was ordered to appear in court on May 29, 2009, in person or through his attorney, and pay the $1,840 to Chicago Pain Medicine Center. The complaint alleges that Ryan was a no-show. The next month, the judge entered an amended judgment against Ryan in favor of the medical clinic in the amount of $11,040 plus court costs, and $980 in attorney fees.

Before a court hearing in November 2009 requiring Ryan to answer questions about his property and income, the judge entered an order for The Private Bank and Trust Company to turn over Ryan’s funds in the total amount of $13,140 to satisfy the judgment in the case. Chicago Pain Medicine Center released its lien on the settlement.

Ryan stated the physician at the medical clinic was the whole $16,000. “He was unhappy because he made a complaint to the ARDC.

In May 2011, Ryan delivered a final check of $14,000 to Kroll, as Kroll’s share of the underinsured motorist claim.

The Attorney Registration and Disciplinary Commission submitted a petition to discipline Ryan on grounds of conversion, misconduct and “defeating the administration of justice.” Ryan was censured by the Illinois Supreme Court in September 2013.

Ryan has sent out similar campaign literature regarding Khalil’s arrest for trespassing. Her campaign states Khalil and her friends were doing a high school project about “The Blair Witch Project” on forested property behind a resident’s home, who called police on the teens.

“But she was arrested,” Ryan told Patch. “I never stole money. If [Khalil] wants to throw mud, throw mud, but don’t go after my business and make false claims. I’ve knocked on over 200 doors and it hasn’t been an issue.”


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