PASCO – The Florida Bar is recommending a five-year disbarment for Pasco attorney and real estate investor Constantine Kalogianis for allegedly convincing an elderly woman to give him nearly $230,000 under the façade of a real estate investment and then failing to pay it back.
According to the Florida Bar complaint filed Nov. 12, 2015, 73-year-old Jacqueline Drury originally sought Kalogianis’ assistance in representing her in the administration of her deceased mother’s trust and selling her mother's home, a trust asset.
During conversations with Kalogianis’ paralegal, Miguel Perez, Drury mentioned financial issues she was having with her investments with Merrill Lynch. Perez allegedly suggested she invest in real estate and later presented her with a real estate investment agreement detailing her $227,000 investment to be secured by properties owned by Kalogianis and Perez. Drury was not informed by Perez or Kalogianis that her mortgage on the properties was junior to other lienholders, or that the properties had no equity. The lenders have since foreclosed on the first mortgages, eradicating Drury's second mortgages.
Under the terms of the agreement, Kalogianis was to pay Drury $1,000 a month in interest for five years, and then repay the entire principal in one balloon payment. Kalogianis allegedly failed to repay Drury in full. The complaint states that in 2009 Kalogianis reduced his monthly payments by half and by 2012 stopped paying on the loan altogether. The complaint also reads that Kalogianis had Drury sign a "waiver of conflict of interest."
In 2009, Drury states in the complaint that she became aware $60,000 of her investment was not secured by mortgages. When she confronted Kalogianis, he allegedly informed her that he used $60,000 of the funds to upgrade his own home.
In 2012, when the balloon payment was due, Drury testified that Kalogianis attempted to continue to make monthly payments at which time she refused the payments and demanded the balloon payment via a letter. Kalogianis did not repay.
Kalogianis testified that the loan was personal in nature and never associated to investment properties, according to the bar complaint.
When asked why the investment agreement did not disclose the nature of the investments or the mortgages, according to the complaint, Kalogianis testified,"[S]he didn't give a lick about that. All she cared about was getting 7 percent [for] my money. Whatever you do with it, you deal with it. She didn't care. She was happy that the money was to be secured by mortgages. She was satisfied with the fact that we were getting it. She said, ‘I trust my attorney.’ I don't know why. I only knew her for a short time, but she trusted me, and I took that whole scenario very seriously.”
In a lawsuit filed against Kalogianis by Bank of America for an allegedly defaulted line of credit, he wrote a letter to the bank to explain his situation. In the letter dated April 7, 2008, he said he and his wife went through all of their savings in 2006 and 2007 to stay afloat, adding that, "[t]owards the end of 2007, we came to the harsh realization that we simply could not go this way any longer." This letter indicates Kalogianis misrepresented his financial status at the time of the transaction with Drury.
Circuit Judge Robert Foster, serving as a referee in the Florida Bar's complaint against Kalogianis, issued a report beginning with a Mark Twain quote, “Always do right. This will gratify some people and astonish the rest.” Foster then wrote, “This is a tenant all lawyers should follow, Respondent [Kalogianis] did not.”
In Foster’s caustic report, he wrote Kalogianis’ testimony was “self-serving,” “strategically evasive” and “drenched in deceitful motive.” He added Kalogianis’ statements were “riddled with inconsistencies” and “not credible.”
Foster wrote, “[Kalogianis] did not fully disclose and provide to Drury the reasonable terms of the transaction, did not sufficiently advise her of the right to and give reasonable opportunity to seek independent counsel, and failed to obtain proper informed consent.”
Foster’s recommendation for Kalogianis’ alleged violation of several bar rules is disbarment for five years. Foster also addressed the Florida Bar’s request that a condition be imposed upon Kalogianis that his readmission to the Florida Bar be contingent upon payment in full to Drury.
Foster wrote: “This referee is of the opinion that such a request and requirement are better left to the determination of The Florida Supreme Court and/or The Florida Board of Bar Examiners, and as such, declines to recommend imposition of such restriction.”
The judge also recommended that Kalogianis be ordered to pay $11,180 in costs related to the bar complaint.
“I complied with rule 4-1.8(a), which states an attorney cannot do business with a client without a waiver," Kalogianis told the Florida Record. "I provided Ms. Drury with the waiver and she agreed to it and signed it. It’s shocking that the judge ruled the way he did, given that information.”
Kalogianis said Drury chose the wrong venue for this case. He said his case is not an ethical issue because he fully complied with the rules; it’s a civil matter and the bar can only determine if an attorney acted unethically and not collect upon debts.
“I made 60 payments to her; when the economy crashed I, like millions of others, suffered financially," Kalogianis said. "I tried to schedule meetings with her to modify the agreement. I sent payments and she refused to accept them. Instead of filing a lawsuit against me for repayment, she went to the bar and testified it was to obtain repayment, only. She even testified she did not believe I acted unethically. Now, I cannot repay her because I am not permitted to talk with her. It’s horrible. The saddest part about this whole case is Ms. Drury doesn’t have any resolution. She doesn’t have her money. I wish I could talk to her.
“I believe the bar ruled the way it did because they are fighting the perception they don’t do enough to punish unethical attorneys, but they picked the wrong case to make their point," he said. "I wasn’t unethical, even Ms. Drury agreed. I didn’t have a chance. My request for mediation during the case was denied, which could have resolved Ms. Drury’s only issue of wanting her money back. There’s no justification to deny mediation. It’s an opportunity to talk. There’s a poor lady who wants to be repaid and no one cares.”
Kalogianis said if he loses his license, life will go on for him and he will find a way to make it through.
“No good came out of this," he said. "She is a good person and I couldn’t say one bad word about her. The worst part about it all is that Ms. Drury doesn’t have her retirement money. I wish I could talk to her.”
Kalogianis has not decided whether he will file a request for review with the Florida Supreme Court. He has 60 days from the date of the report to do so. He has requested the case transcript from the court because he said there are inconsistencies between the documents and the testimony, which may influence his decision to file a request for review.
Kalogianis doesn’t know what he will do if he loses his license and believes that if he loses it, it only causes Drury more harm because it takes away his ability to repay her, if they could reach an agreement in the future.