GLASGOW (Kentucky) – The attorney for a Greensburg-based, now former lawyer accused of misusing client funds to pay off gambling debts has requested and received extra time to prepare his defense in the federal case against his client.
In the meantime, Danny Perkins Butler, who has had cases in Barren, Metcalfe and other area counties, was permanently disbarred in December from the practice of law in the Commonwealth of Kentucky.
A Hardin County grand jury indicted Butler in November 2016, charging him with theft by unlawful taking and theft by failure to make required disposition over $10,000, according to a previous Kentucky State Police press release. It said the indictment came after the grand jury heard evidence related to Butler’s mishandling of client funds and escrow accounts. He was arrested at the time, and search warrants were executed at his Campbellsville residence and Greensburg business office.
Then, however, Butler was indicted Nov. 15 by a federal grand jury on five counts of wire fraud, with the allegation being that from around August 2009 through October 2016, he “devised a scheme to obtain money by means of false or fraudulent pretenses, representations or promises from clients of his legal practice, and for the purpose of executing said scheme, did knowingly transmit and cause to be transmitted wire communications in interstate commerce.”
Butler entered a plea of not guilty in U.S. District Court, Western District of Kentucky, in Bowling Green on Nov. 29.
Shane Young, commonwealth’s attorney for the 9th Circuit, which is Hardin County, told the Daily Times in December that the federal government’s indictment went along with the one in Hardin Circuit Court, “so the whole thing is in federal court now.”
Technically speaking, the Hardin County case would show as a dismissal, but that’s only because it was transferred to federal jurisdiction.
According to a report from The News-Enterprise in Elizabethtown, that case involved an allegation that Butler took $207,000 from a client following settlement of a civil lawsuit settlement in Hardin County in 2012.
Butler is said in the federal indictment to have maintained seven bank accounts at three banks that he used for both personal and business purposes, “routinely” using them to commingle client funds and using client funds in the accounts to pay for his gambling expenses.
“While commingling funds he would often misappropriate funds from one client to distribute funds to other, unrelated clients. He also used client funds from the Bank accounts to make cash withdrawals and pay personal expenses. In addition, he transferred client funds from business bank accounts to his personal bank accounts,” the indictment alleges.
The document lists dollar figures for each year from 2009 through 2015, ranging from $47,370 in 2015 to $512,562 in 2011, that are said to be personal gambling losses “paid for, in large part, by the misappropriation of client funds.”
The indictment also lists 11 approximate amounts and the client accounts for estates or for representation – using client initials only – from which Butler allegedly misappropriated them. Most of the total amounts per client were less than $100,00, ranging from two estates at $25,000 each to one estate and one representation account each at $90,000. Three others were $125,000, $148,106 and $401,500.
The indictment also lists five specific interstate wire transmissions made – two on June, 18, 2013, one in December 2014 and two in fall 2015 – to coincide with the five counts of wire fraud. The first count involved a deposit of $58,000 into a PBI account that caused and interstate wire communication from Glasgow to Georgia. The others involved deposits that caused wire transactions from Campbellsville to Georgia. The total of the five transactions was $521,479.59.
If found guilty, Butler could be subject to up to 20 years’ imprisonment, and/or $250,000 fine, with up to three years supervised release for each count, plus forfeiture of “any property, real or personal, which constitutes or is derived from proceeds obtained therefrom, directly or indirectly.” He could also be ordered to make restitution to any victim of the offense in addition to or in lieu of any other penalty.
Butler is free on his own recognizance.
On Dec. 18, Butler’s attorney, Elmer J. George, filed a motion for the federal case to be declared “complex” under the Speedy Trial Act. Essentially, it means exceptions could be permitted in the case that would extend the timeline for it to go to trial.
A telephonic conference took place Dec. 19 with George and Assistant U.S. Attorney Bryan Calhoun, according to an order entered Dec. 20 by Judge Greg N. Stivers granting the motion. During the conference, the order says, George requested more time to review evidence in the case, confer with the client and U.S. attorney and to consider any possible resolution. Calhoun did not object, and the parties agreed that a period of delay between Dec. 19 and March 19 would be excluded from the time allowed for a speedy trial, according to Stivers’ order.
The Kentucky Supreme Court Opinion and Order allows Butler, who had been admitted to the practice of law in Kentucky on Sept. 1, 1973, to resign “for his admitted violations of the Rules of Professional Conduct” as a “negotiated discipline.”
According to the document, Butler noted in his motion for a voluntary resignation the Hardin County indictment, and the order says the charges arose “as a result of misappropriating a client’s funds for his own use.” As a result, Butler was temporarily suspended from practice on April 27, 2017.
The court writes that Butler “has had an extensive disciplinary history including four private admonitions and a private reprimand with conditions.”
The Kentucky Bar Association had no objection to the proposed discipline, according to the opinion, and it cited two other cases in which a voluntary disbarment was imposed.
The court orders Butler permanently disbarred from practice in Kentucky and required him to pay all costs associated with the disciplinary proceedings.
The order was issued Dec. 14, signed by Chief Justice John D. Minton Jr., and it also said all were present and all concurred with the decision.