New Smyrna Beach attorney suspended in emergency order related to alleged misuse of funds

The Florida Supreme Court has issued an emergency suspension against a New Smyrna Beach attorney after the Florida Bar stated he had misappropriated client trust funds to pay for items including payroll and LA Fitness, according to documents.

Larry Edward Powers Jr.,of 4155 S. Atlantic Ave. Apt. 110, New Smyrna Beach, was issued an emergency suspension until further order of the state Supreme Court.

Some of the money in Power's legal trust fund went to benefit himself or his law firm, including paying payroll, advertising and paying Mercedes-Benz of North Orlando and LA Fitness, according to the Florida Bar.

In a message to The News-Journal, Powers disputed the allegations that he used funds to pay for LA fitness and Mercedes.

"The respondent's records established that he misappropriated client trust funds to cover shortages over a period of several years and used client funds for the benefit of himself or his law firm," wrote Alexis Leigh Lombard, a Florida Bar counsel.

Powers, who was admitted to practice in 1987, was ordered not to accept any new clients as of an Aug. 14 court order and must cease representing any clients after 30 days of the court's order, according to the Florida Bar. He was also ordered not to say he was an attorney.

Powers has not denied the trust violations, Lombard wrote. Powers has primarily claimed that the Florida Bar abused its powers by obtaining his bank records without his permission, Lombard wrote.

But the Florida Bar was authorized to obtain the records to audit his records to check for compliance, Lombard wrote.

"Powers has caused, or is likely to cause, immediate and serious harm to clients or the public by misappropriating client funds and committing fundamental trust account violations," according to the Florida Bar which stated in a petition that immediate action was needed to protect his clients and the public.

Lombard wrote that "As a long-time practitioner respondent (he) knew, or reasonably should have known, that misappropriation of client funds is among the most serious offenses a lawyer can commit."

Powers was also ordered to cease withdrawing any money from any trust account or any financial institution holding funds from clients or third parties in connection with legal representation, according to the Supreme Court order.

The order also states that Powers must not "transfer any ownership of any real or personal property purchased in whole or in part with funds of clients or third parties in connection with legal representation ..."

In a text message Saturday to the News-Journal, Powers wrote: “Yes, I deny the accusations, and it is very unfair that my reputation has been destroyed without my having the opportunity to tell my side of the story and defend myself."

In a response in a motion, Powers accused the Florida Bar counsel of "ambushing" him and claimed that it improperly obtained the trust account records. Powers wrote that he had been semi-retired for three years and has made no money nor handled any client money in that time. He wrote he had a few pro-bono cases but has not accepted any new clients in three years.

Powers also wrote that he has one client other than pro-bono clients and that case is behing handled by another attorney on appeal.

"There is no reason to believe that the public is being harmed," Powers wrote.

When reached by The News-Journal on Friday, Powers said he could not comment at this time and referred the reporter to his response.

Complaint filed with Florida Bar

The bar received a complaint on July 24, 2023, from Gary Smith, president of SCS, saying that Powers failed to remit money owed to SCS from the settlement of a claim. When the Florida Bar requested documents from Powers in October 2023 related to the claim, Powers said he did not have any documents and that the documents had been "purged" and the money had been disbursed in 2016 or earlier.

When a Florida Bar investigator made another request related to a client named J.O., Powers responded Feb. 5, 2024, that he did not deposit the settlement check in his trust account because the "funds were minimal," and he provided the check directly to the client who was having financial difficulties, according to the document. Powers did not provide any documentation regarding the settlement explanation.

Powers also failed to provide any trust account records despite being served with a subpoena, the petition stated.

The bar then subpoena Powers' trust account records from Regions Bank and found a shortage of $49,714.74 due to Powers failure to maintain funds in the trust account, according to the Florida Bar. The funds should have been in the account for three clients.

The audit found that a settlement check for $100,000 was deposited in the trust account in October 2020 for a client identified as J.O. But J.O. only received one check for $25,000.

Two settlement checks for client T.S. totaling $30,000 were deposited in the trust account in October and December 2020. Two settlement checks totaling $20,000 were deposited in December 2020 for client M.T. But no payments were identified for T.S. or M.T. between October 2020 and March 2021, the petition stated.

Only $285.26 was left in the trust account by March 19, 2021, the petition stated.

A bankruptcy judge ordered Powers on Sept. 23, 2021, to provide $20,000 he received for M.T.'s settlements. At the time, there was only $8,788.07 in the trust account.

Powers wrote in his response the order was necessary because the client refused to allow him to turn over the money.

On Oct. 7, 2021, Powers' wife deposited a $20,000 check into Powers' trust account and the following day a $20,000 check referencing M.T. was issued to the bankruptcy trustee, the Florida Bar petition stated.

On April 6, 2023, the balance in Powers' trust account was $125.58 and later that day a $90,000 check apparently from Powers' wife's account was deposited in the trust account.

On July 24, 2023, a payment of $7,000 was made to T.S. No additional payments for T.S. were identified, the petition stated.

The records showed that Powers caused the shortage by making payments to unrelated clients and withdrawing money he was not entitled to from the trust account and depositing them in his operating account, the Florida Bar petition states.

On May 3, 2024, the Florida Bar subpoenaed Powers' operating account from Jan. 1, 2020, to present. The records from the account showed that Powers "used client funds for the benefit of himself or his law firm," according to the Florida Bar.

From March 4, 2021, to March 19, 2021, Powers made seven withdrawals totaling $18,700 from the trust account and deposited the money in the operating account to cover overdrafts, issue payroll checks, pay advertising, pay AT&T, pay Mercedes-Benz of North Orlando and pay LA Fitness, the petition stated.

The Florida Bar audit found that Powers was not in substantial compliance with the rules governing trust accounts, the petition stated.

This article originally appeared on The Daytona Beach News-Journal: New Smyrna Beach attorney suspended in emergency order related to alleged misuse of funds