Supreme Court calls Michael Eddings victim of ‘elaborate con’

Facing disbarment, attorney Michael A. Eddings instead received the lightest possible punishment from the Georgia Supreme Court on Thursday afternoon, more than five years after $2.3 million was discovered missing from his legal trust account.

The high court called Eddings “the victim of an elaborate con perpetrated by his (then) wife, Sonya,” and ordered that he receive a public reprimand instead of stiffer penalties recommended by a special master assigned to handle Eddings’ case and a bar review panel. The special master had recommended a one-year suspension, while the review panel had suggested Eddings lose his law license.

The ruling allows Eddings to continue to practice law, which he has done since the funds were discovered missing in October 2011.

Sonya Eddings, who was also his office manager, has accepted full responsibility for the missing funds. Sonya Eddings pleaded guilty to one count of wire fraud in U.S. District Court, Middle District of Georgia in August. She faces up to 20 years in prison, but has not been sentenced by Judge Clay Land.

“The Georgia Supreme Court is the final arbiter of lawyer discipline and the State Bar respects its decision,” said William J. Cobb, State Bar of Georgia assistant general counsel, who has handled the Eddings disciplinary case from the beginning.

Michael Eddings did not know about the Supreme Court decision until he was informed by a reporter over the phone. He broke down and began to sob.

“This is overwhelming,” said Eddings, who has maintained throughout the ordeal he had no knowledge of his wife’s deception.

In addition to the public reprimand, the Supreme Court also ordered that Eddings comply with the following additional terms that are in line with recommendations of the special master:

▪ Accept the services of the State Bar’s Law Practice Management Section in setting up his financial accounts and law practice.

▪ Take the next available Multistate Professional Responsibility Examination and obtain a passing score.

▪ Make full restitution within five years of this order to the victims who have not been compensated by First American Title Insurance Company.

Violation of the terms could subject Eddings to additional discipline, according to the Supreme Court’s order.

Michael Eddings faced 10 complaints alleging 34 violations of state bar rules. They all stem from his firm’s real estate business, in which he was handling as many as 80 closings a month. During an April 2014 hearing in front of Special Master Katherine L. McArthur, Eddings fought to save his license to practice law while the State Bar of Georgia was pushing for him to lose it.

In October 2014, the special master recommended that Eddings’ law license be suspended for one year and he have a plan in place to repay 10 percent of the nearly $2 million stolen from his law firm’s trust account. Both Eddings and the State Bar of Georgia appealed that decision.

Thursday’s Supreme Court ruling took exception to the special master’s recommendation.

“The problem with the special master’s analysis is that it punishes Eddings for failing to take steps that he was not reasonably required to take in light of the information that was made available to him,” the order stated. “It is undisputed that Sonya was able to consistently explain away any irregularities in the IOLTA (trust) account to the satisfaction of all of the professionals with whom she had been working, including bank officials, whenever any question arose. Contrary to raising the idea that further supervision was needed, all of the professionals dealing with Sonya were consistently given the impression that everything was fine.”

The high court noted that Eddings took the the reasonable step of implementing new procedures in November 2010, to correct any potential future irregularities by requiring Sonya Eddings, who before joining her husband’s law practice worked for Columbus Bank & Trust, to report to him with proof that all wire transfers were being sent properly.

“Eddings had no reason to believe Sonya would be able to, or actually would, use her banking skills to circumvent these procedures and commit fraud,” the court noted. “Again, as far as Eddings, CB&T, and any auditors knew up to that point, there was no evidence of any questionable activity that could not be reasonably explained away, or that indicated that Sonya truly needed additional supervision.”

The court’s ruling noted the lengths that Sonya Eddings went to hide her crimes.

“Sonya was so convincing in her con that no one from CB&T believed that any deceit was occurring, let alone to the tune of $2.3 million, and Eddings was given no information upon which to base a reasonable belief that any deceit was occurring,” the ruling stated.

In October 2011, the scheme fell apart when Sonya Eddings was out of town and the law office received a call from a client complaining that a payoff of a mortgage had not been made. Sonya Eddings immediately transferred the money, but by the time she did, First American Title Insurance, which insured their closings, became involved.

Auditors were brought into the office, and Sonya Eddings confessed in a written statement.

CB&T had also frozen all of Eddings’ business and personal accounts, according to testimony. At the time, the Eddingses were building a $1 million home with an $800,000 construction loan from CB&T.

Eddings, who has remarried, moved his law practice to Atlanta, though he still does some criminal defense work in Muscogee County courts.

“I am so relieved right now,” Eddings said. “All I could do was have faith in God and hope for the best. I want to thank my Columbus family for standing behind me.”

This story was originally published December 15, 2016 at 6:59 PM.