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LIGHTNING EXCLUSIVE: Bar places lawyer on 'disability' status, probes trust accounts

The North Carolina State Bar placed a Hendersonville attorney on inactive status after the attorney was involuntarily committed to a psychiatric unit in January. The State Bar also said its investigation had indicated that the attorney mishandled client funds.

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An order filed in Wake County court by the State Bar secretary placed Alexander H. "Lex" Veazey III on "disability inactive status. The State Bar order was filed on Jan. 18, four days after an order was entered in Henderson County District Court "adjudging Veazey to be mentally ill and dangerous to himself or to others." Pursuant to the Henderson County court order, Veazey was committed to the psychiatric unit of Pardee Hospital, said the State Bar order filed by L. Thomas Lunsford, the State Bar secretary. Veazey has since been discharged.
The disability order was filed as the State Bar was conducting an investigation into Veazey's handling of clients' trust account. In the "findings of fact" in a consent order filed on Jan. 31, the Bar said its preliminary investigation "indicates Veazey has mishandled entrusted client funds that were deposited into his attorney trust account." The attorney "desires to cooperate" with the State Bar, the order said.
The consent order, signed by Wake County Superior Court Judge Donald W. Stephens, blocks the Hendersonville lawyer from accepting money from clients in a fiduciary capacity and orders him not to write checks against trust accounts or withdraw money from trusts. The order directs him to turn over records of client trust accounts and bars him from serving as a trustee, escrow agent, executor or personal representative until the court lifts its order.
He must also turn over to the State Bar client files, billing statements, memos, receipts and monthly and quarterly reconciliation reports for all trust accounts. The order bars him from serving as an attorney or acting in a fiduciary capacity "until further order of this Court."

Disability order
The order placing Veazey on disability status is "for an indefinite period until further order of the Disciplinary Hearing Commission" of the North Carolina State Bar.
Under the State Bar's disciplinary rules governing attorneys' conduct, the bar's grievance committee was required to hold a hearing to determine whether the attorney was disabled, which the rule defines as "a mental or physical condition which significantly impairs the professional judgment, performance, or competence of an attorney." In those hearings, state Bar carries the "burden of proving by clear, cogent and convincing evidence that the member is disabled" within the meaning of the Bar's disciplinary rules.
State Bar counsel Katherine Jean said a disciplinary action cannot go forward while an attorney is on disability status.
A native of Hendersonville and graduate of Hendersonville High School, Veazey received an undergraduate degree from Davidson College and earned his law degree from Wake Forest. He was admitted to the North Carolina State Bar in August 1978.