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Article Courtesy of The Tampa
Bay Times
By Susan
Taylor Martin
Published August 29, 2016
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."
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