San Francisco, CA – September 2024

Case Number	Court	Judicial Office
SBC-24-O-30017	San Francisco	Chawla, Manjari
File Date	Case Type	Case Status
01/30/2024	Original Discipline	Supreme Court – Closed

Richard Sax, a California attorney licensed since 1978, is facing serious disciplinary charges from the State Bar of California, which could lead to his disbarment. According to a Notice of Disciplinary Charges filed on January 30, 2024, Sax allegedly committed multiple acts of moral turpitude, including using his client trust account to hide personal funds from creditors and misappropriating client funds.

Hiding Personal Funds from Creditors

One of the central allegations against Sax involves the misuse of his client trust account. In 2018, Sax had a judgment entered against him for $323,611.21 in a lawsuit filed by Fast Trak Investment Company, LLC. The State Bar accuses Sax of opening a client trust account in July 2017 and depositing his personal funds into that account between October and November 2019 to hide them from Fast Trak’s collection efforts. This misuse of a client trust account constitutes an act of moral turpitude, a violation of Business and Professions Code section 6106.

Misappropriation of Client Funds

In addition to hiding personal assets, Sax is also charged with misappropriating over $44,000 from a client. In 2020, Sax received a $100,000 settlement on behalf of his client, Moab Tesfazgi, but failed to distribute the full amount owed to Tesfazgi and the lienholders. By November 2020, the balance in Sax’s client trust account had dropped to just over $20,000, despite the fact that $64,583.17 was still owed. The State Bar claims Sax intentionally misappropriated $44,529.51, which constitutes another act of moral turpitude under section 6106.

Additional Violations

Sax faces several other charges, including:

• Failure to Maintain Client Funds: Sax allegedly failed to maintain the required balance of $64,583.17 in his client trust account for Tesfazgi and lienholders, violating Rule 1.15(a) of the Rules of Professional Conduct.
• Failure to Maintain Proper Records: The State Bar accuses Sax of failing to keep adequate records of client funds, including client ledgers and account journals, as required by Rule 1.15(d)(3).
• Commingling Personal Funds: Sax allegedly deposited his own funds into the client trust account on several occasions, violating Rule 1.15(c), which prohibits attorneys from mixing personal and client funds.
• Payment of Personal Expenses from Client Trust Account: Between October 2019 and February 2020, Sax is said to have paid personal and business expenses directly from the client trust account, further violating the Rules of Professional Conduct.