In Re: Karl J. Koch

Supreme Court of Louisiana
January 17, 2024
Chief Deputy Clerk of Court
For the Court
The Supreme Court of the State of Louisiana
IN RE: KARL J. KOCH
No. 2023-B-01395
_ _ _ _
_ _
IN
RE: Disciplinary Counsel - Applicant Other; Findings and Recommendations
(Formal Charges);
_ _ _ _ _ _
January 17, 2024
Suspension imposed. See per curiam.
Weimer, C.J., dissents and assigns reasons.
JDH
SJC
JTG
WJC
JBM
PDG
01/17/2024 "See News Release 002 for any Concurrences and/or Dissents."

S
UPREME COURT OF LOUISIANA
NO.
2023-B-1395
I
N RE: KARL J. KOCH
AT
TORNEY DISCIPLINARY PROCEEDING
P
ER CURIAM
T his disciplinary matter arises from formal charges filed by the Office of
Disciplinary Counsel (“ODC”) against respondent, Karl J. Koch , an attorney
licensed to practice law in Louisiana.
UND
ERLYING FACTS
On May 21, 2019, the ODC received notice from Chase Bank that
respondent’s client trust account held insufficient funds on May 14, 2019 to honor a
$300 check. Consequently, the ODC audited respondent’s trust account for the
period from January 1, 2017 through July 31, 2019. The audit revealed that, for the
entire audit period, respondent used the account as his personal and/or operating
account and failed to perform reconciliations. More specifically, the various
disbursements from the account were for personal or operating expenses or were
cash withdrawals. Furthermore, the initial overdraft occurred because respondent
made a disbursement from the account when he knew it held insufficient funds, and
he failed to make a deposit prior to the $300 check clearing the bank. The ODC’s
auditor was initially unable to confirm the presence of client funds in the trust
account during the audit period.
On September 10, 2019, respondent provided the ODC with a sworn
statement, during which he admitted to using his trust account as an operating
account. He further explained that he utilized his trust account in this way because
01/17/24

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the Internal Revenue Service (“IRS”) had previously seized funds from his other
bank accounts to pay his outstanding tax liabilities. Respondent also stated that he
had not deposited client funds into the trust account recently.
Following the sworn statement, respondent provided the ODC with additional
trust account records in support of his contention that the account held no client
funds. However, the auditor’s review of these records indicated that client funds
were, in fact, held in the account during the audit period. Specifically, respondent
deposited almost $52,000 in client settlement funds into the account between July
2017 and June 2018. The auditor also concluded that, because of respondent’s
failure to maintain and/or provide to the ODC complete records of his trust account,
an exact quantification of his misuse and the balance of client funds that should have
been held in the account could not be fully determined.

DISCIPLINARY PROCEEDINGS
In December 2021, the ODC filed formal charges against respondent, alleging
that his conduct violated the following provisions of the Rules of Professional
Conduct: Rules 1.15(a) (a lawyer shall 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), 1.15(b) (a lawyer may deposit the lawyer’s own funds in a
client trust account for the sole purpose of paying bank service charges on that
account or obtaining a waiver of those charges, but only in an amount necessary for
that purpose), 1.15(c) (a lawyer shall deposit into a client trust account legal fees and
expenses that have been paid in advance, to be withdrawn by the lawyer only as fees
are earned or expenses incurred), 1.15(f) (on client trust accounts, cash withdrawals
and checks made payable to “Cash” are prohibited; a lawyer shall subject all client
trust accounts to a reconciliation process at least quarterly, and shall maintain
records of the reconciliation), 8.4(a) (violation of the Rules of Professional

3

Conduct), 8.4(b) (commission of a criminal act that reflects adversely on the
lawyer’s honesty, trustworthiness, or fitness as a lawyer), and 8.4(c) (engaging in
conduct involving dishonesty, fraud, deceit, or misrepresentation).
Respondent, through counsel, filed an answer to the formal charges, admitting
to all the alleged rule violations except the Rule 8.4(b) violation. Accordingly, the
matter proceeded to a formal hearing on the merits. At the beginning of the hearing,
the ODC moved to dismiss the Rule 8.4(b) allegation. Respondent did not object,
and the ODC’s motion to dismiss was granted. The hearing then proceeded on the
remaining charges.

Hearing Committee Report
After considering the testimony and evidence presented at the hearing, the
hearing committee found that, for the most part, respondent admitted the factual
allegations set forth in the formal charges as well as the alleged rule violations,
except Rule 8.4(b) which the ODC dismissed. Based upon respondent’s admissions,
as well as the other evidence in the record, the committee determined respondent
violated Rules 1.15(a), 1.15(b), 1.15(c), 1.15(f), 8.4(a), and 8.4(c) of the Rules of
Professional Conduct as charged.
The committee then determined respondent knowingly violated duties owed
to the public, as attorneys should uphold the highest standards of honesty and
integrity. The committee also determined respondent’s conduct caused no actual
harm to any clients. After considering the ABA’s Standards for Imposing Lawyer
Sanctions, the committee determined the baseline sanction is suspension.
The committee appeared to find no aggravating factors present. In mitigation,
however, the committee found the following: absence of a prior disciplinary record,
1

1 In fact, respondent has prior discipline in the form of a 2011 admonition for failing to promptly
refund an unearned fee.

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personal and financial problems/stressors, full and free disclosure to the disciplinary
board and a cooperative attitude toward the proceedings, character or reputation, and
“sincere” remorse.
After further considering this court’s prior case law a ddressing similar
misconduct, the committee recommended respondent be suspended from the
practice of law for one year, fully deferred, subject to a two-year period of supervised
probation.
The ODC filed an objection to the committee’s report and recommenda tion,
arguing the recommended sanction is too lenient.

Disciplinary Board Recommendation
After review, the disciplinary board adopted the hearing committee’s factual
findings. The board then made the following additional factual findings:
1. Respondent was not trying to hide his personal funds from the IRS by
depositing them into his trust account. He disclosed the trust account to the
IRS early in its collection process, and he disclosed it again when a new IRS
agent was assigned to his case. The new agen t apparently knew respondent
had personal and operating funds, along with client funds, in his trust account
because she advised him that he needed to have an operating account for his
personal and operating funds and that he could not use his trust account in
such a manner.
2. During his sworn statement, respondent testified that he did not have any
client funds in his trust account during the IRS’s collection efforts, which
began in 2015 or 2016 and was ongoing during the formal hearing of this
matter. Specifically, respondent stated, “No. I mean not – certainly not any
time recently, you know.” The ODC argued respondent’s answer was
misleading because it indicated that, during the time of the IRS’s collection

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efforts, no client funds were present in his t rust account when they, in fact,
were present according to the documentary evidence. Although respondent’s
answer to the ODC’s question was undoubtedly unclear, the ODC did not
follow up with further questions regarding the exact time period in which
client funds were in his trust account. Given the ODC’s failure to further
explore and clarify respondent’s answer, respondent’s answer cannot be
classified as a misrepresentation.
Based upon these facts, the board determined that respondent violated the Rules of
Professional Conduct as found by the committee and admitted to by respondent.
The board then determined respondent knowingly violated duties owed to his
clients and the public. While respondent’s conduct caused no actual harm, the
potential for harm was present in that client funds in his trust account were at risk of
being seized by the IRS to satisfy his personal tax liability. The board agreed with
the committee that the baseline sanction is suspension.
In aggravation, the board found a prior disciplinary record and substantial
experience in the practice of law (admitted 1985). In mitigation, the board found
personal or emotional problems, full and free disclosure to the disciplinary board
and a cooperative attitude toward the proceedings, character or reputation, remorse,
and remoteness of prior offenses.
After further considering this court’s prior case law addressing similar
misconduct, the board recommended respondent be suspended from the practice of
law for one year and one day, fully d eferred, subject to a two- year period of
supervised probation with the condition that he attend the Louisiana State Bar
Association’s Trust Accounting School. One b oard member concurred but
emphasized that the recommendation “must be followed to the letter.”
Neither respondent nor the ODC filed an objection to the board’s
recommendation.

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DISCUSSION
Bar disciplinary matters fall within the original jurisdiction of this court. La.
Const. art. V, § 5(B). Consequently, we act as triers of fact and conduct an
independent review of the record to determine whether the alleged misconduct has
been proven by clear and convincing evidence. In re: Banks, 09-1212 (La. 10/2/09),
18 So. 3d 57. While we are not bound in any way by the findings and
recommendations of the hearing committee and disciplinary board, we have held the
manifest error standard is applicable to the committee’s factual findings. See In re:
Caulfield, 96 -1401 (La. 11/25/96), 683 So. 2d 714; In re: Pardue , 93 -2865 (La.
3/11/94), 633 So. 2d 150.
The record of this matter supports a finding that respondent mishandled his
client trust account, r esulting in commingling of funds. Based on these facts,
respondent has violated the Rules of Professional Conduct as found by the hearing
committee and disciplinary board and as admitted to by respondent.
Having found evidence of professional misconduct, we now turn to a
determination of the appropriate sanction for respondent’s actions. In determining
a sanction, we are mindful that disciplinary proceedings are designed to maintain
high standards of conduct, protect the public, preserve the integrity of the profession,
and deter future misconduct. Louisiana State Bar Ass’n v. Reis , 513 So. 2d 1173
(La. 1987). The discipline to be imposed depends upon the facts of each case and
the seriousness of the offenses involved considered in light of any aggravating and
mitigating circumstances. Louisiana State Bar Ass’n v. Whittington, 459 So. 2d 520
(La. 1984).
Respondent knowingly, if not intentionally, violated duties owed to his
clients, the public, and the legal profession. Although his conduct caused no a ctual
harm, the potential for harm was significant. We agree with the committee and the
board that the baseline sanction is suspension.

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A ggravating factors include a prior disciplinary record and substantial
experience in the practice of law. Mitigating factors present are as follows: personal
or emotional problems, full and free disclosure to the disciplinary board and a
cooperative attitude toward the proceedings, character or reputation, delay in the
disciplinary proceedings, remorse, and remoteness of prior offenses.
Our prior case law addressing similar misconduct suggests that the board’s
recommended sanction is reasonable. For example, in In re: Schoenberger, 21-0191
(La. 6/30/21), 320 So. 3d 1125, an attorney mishandled his client trust account,
which resulted in commingling and conversion but no actual harm. The attorney
also backdated four checks to third-party providers in an attempt to mislead the ODC
during its investigation. For this misconduct, we suspended the attorney from the
practice of law for one year and one day, with all but sixty days deferred, followed
by two years of supervised probation with conditions. In In re: Hunt , 19-1412 (La.
11/12/19), 282 So. 3d 213, an attorney mishandled her client trust account and failed
to fully cooperate with the ODC in its investigation. For this misconduct, we
suspended the attorney from the practice of law for one year and one day, fully
deferred, subject to two years of supervised probation with conditions. In In re:
Spears, 11-1135 (La. 9/2/11), 72 So. 3d 819, an attorney mishandled his client trust
account, resulting in commingling and conversion of client and third-party funds but
no actual harm. For this misconduct, we suspended the attorney from the practice
of law for one year and one day, fully deferred, subject to two years of supervised
probation with conditions.
In comparison, respondent’s misconduct is not as egregious as the misconduct
in Schoenberger as he did not convert client funds and he did not attempt to mislead
the ODC. Furthermore, unlike the attorney in Hunt , respondent fully cooperated
with the ODC’s investigation. Finally, the instant matter involves no conversion of

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client funds as was present in Spears. Considering this case law, the board’s
recommended sanction is appropriate.
Accordingly, we will adopt the board’s recommendation and suspend
respondent from the practice of law for one year and one day, fully deferred, subject
to a two-year period of supervised probation with the condition that he attend Trust
Accounting School.
DE
CREE
Upon review of the findings and recommendations of the hearing committee
and disciplinary board, and considering the record, it is ordered that Karl J. Koch,
Louisiana Bar Roll number 17010, be and he hereby is suspended from the practice
of law for one year and one day. This suspension shall be deferred in its entirety,
subject to respondent’s successful completion of a two-year period of supervised
probation with the condition that he attend the Louisiana State Bar Association’s
Trust Accounting School. The probationary period shall commence from the date
respondent, the ODC, and the probation monitor execute a formal probation plan.
Any failure of respondent to comply with the conditions of probation, or any
misconduct during the period from the date of this judgment through completion of
the probationary period, may be grounds for making the deferred suspension
executory, or imposing additional discipline, as appropriate. All costs and expenses
in the matter are assessed against respondent in accordance with Supreme Court Rule
XIX, § 10.1, with legal interest to commence thirty days from the date of finality of
this court’s judgment until paid.