Even before the Great Recession, New Port Richey attorney Constantine Kalogianis was in serious financial trouble.
In a letter to a bank that was suing him, Kalogianis said he had exhausted his savings and "simply could not go (on) this way any longer.'' His real estate holdings were worth less than the loan amounts. He had stopped paying on two business lines of credit.
Yet Kalogianis told none of this to a client who agreed to "invest'' nearly $230,000 with him.
In a scathing report filled with terms like "completely self-serving,'' "strategically evasive'' and "drenched in deceitful motive,'' a judge is recommending that the Florida Supreme Court disbar Kalogianis for five years for violating numerous Bar rules in his dealings with 73-year-old Jacqueline Drury.
The report comes as the Pinellas-Pasco State Attorney's Office confirmed it is investigating unrelated allegations that Kalogianis doctored official court files in several mortgage foreclosure cases.
Kalogianis, 53, has denied wrongdoing in both matters. In an email Tuesday about the Drury case, he said: "This is perhaps the first time in history that an attorney is about to be disciplined for following the rules. One cannot have any regret doing something unethical when there was nothing unethical done.''
A veteran lawyer and former congressional candidate, Kalogianis was developing a subdivision in New Port Richey in 2007 when Drury hired him to handle the sale of her late mother's home. An assistant to Kalogianis suggested that Drury "invest'' the $227,0644 proceeds of the sale with the attorney.
According to the report by Hillsborough County Circuit Judge Robert Foster, neither the assistant nor Kalogianis ever made it clear to the "financially unsophisticated'' Drury exactly what she was investing in. In fact, the judge said, the money was a personal loan to Kalogianis secured by second mortgages on his then-home and lots in the subdivision where he was building a new million-dollar house.
The lenders eventually foreclosed on the first mortgages, wiping out Drury's second mortgages. Kalogianis also stopped making monthly interest payments on his loan from Drury, nor did he pay back the $227,00 balance after the agreed-on five years.
In his report, Foster blasted the attorney for not stressing to Drury that she could seek independent legal counsel before signing their "investment agreement,'' which was scrawled on a piece of lined notebook paper and partly illegible.
When Drury told him, "You're my lawyer, I trust you'' and thus didn't need another attorney, "a five-alarm bell should have gone off in (Kalogianis') head,'' the judge wrote.
"Whether it was greed, necessity or something else, (Kalogianis) did not answer the alarm's call. He did not stop the moving train, pull Drury aside and explain that he was not her attorney for purposes of this transaction, and that he could not represent her or her interests because his own interests were involved.''
The judge, serving as referee in the Florida Bar's complaint against Kalogianis, also lambasted him for using $60,000 of Drury's money for expensive upgrades on his new house including hardwood floors and granite countertops.
"It shocks the conscience of this court that (Kalogianis) would so nonchalantly take money from a client,'' the judge wrote. "It is additionally egregious that he did so without seeking Drury's permission.''
In his email Tuesday, Kalogianis said Drury "herself testified that nothing unethical or improper was done.'' He blamed his failure to repay the loan on the recession and Drury's unwillingness to work with him "because she wanted payment in full.''
If the state Supreme Court follows Foster's recommendation, Kalogianis would be among 54 Florida attorneys disbarred in the past year. The judge recommended that Kalogianis be ordered to pay $11,180 in costs related to the Bar complaint; the Supreme Court also could also order him to make restitution to Drury, who said her dealings with Kalogianis left her unable to afford a car, dental care or visits to her daughters in New York,
Meanwhile, State Attorney Bernie McCabe said his office is investigating a lender's accusations that Kalogianis altered records in several Pasco foreclosure cases so as to benefit homeowners he represented. Surveillance videos taken in a Pasco clerk's office last year appear to show him stamping something on papers in two different cases.
Under certain circumstances, altering officials records is a felony
"We are trying to find out what he did,'' McCabe said. "We're trying to find a common thread that would support a criminal charge. The video doesn't tell you what he did, it shows him doing something.''
In his report, Foster noted that Kalogianis' own home has been in foreclosure for years but that he and his wife still live there — "presumably paying no mortgage, taxes or insurance.''
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate.