UNREPORTED: House Rep. (D-Wake) Disciplined by State Bar for "Pattern of Misconduct" Involving Trust Accounts
UNREPORTED: House Rep. (D-Wake) Disciplined by State Bar for "Pattern of Misconduct" Involving Trust Accounts
Democratic Representative Guangya "Ya" Liu represents House District 21 in Western Wake County
Previously unreported on public documents show that Guangya "Ya" Liu, a Cary Democrat in the NC House of Representatives representing House District 21, was disciplined by the NC State Bar in 2021 with a stayed suspension of her legal license for mismanagement of client funds entrusted to her.
According to the September 2021 disciplinary notices:
Guangya Liu of Durham habitually over-disbursed her trust account in real estate transactions; continued to do so after representing to the State Bar that she had amended her practices; and habitually left earned fees in her trust account. The [Disciplinary Hearing Committee] suspended her license for two years. The suspension is stayed for three years upon her compliance with enumerated conditions.
During the three years of "stayed suspension" (which expired this summer) Liu was required to submit monthly and quarterly reports to a Trust Account Monitor to ensure she was complying with proper practices. Liu completed the period without activating the two-year suspension by violating the conditions set by the State Bar.
Consent Order
The Consent Order of Discipline signed by Liu contains additional details. In 2019, the State Bar opened a grievance against Liu after she wrote a bad check against one of her trust accounts, leading to an overdraft of $539.06.
The ensuing audit found multiple instances of over-disbursing funds from two trust accounts, "resulting in multiple negative client balances".
The audit also found that Liu had not performed and recorded the required reconciliation between on the trust accounts, or "maintain[ed] complete and accurate records of all entrusted property she received". Liu also intentionally left her earned fees in the trust accounts.
After receiving a Letter of Notice from the State Bar, Liu "acknowledged that her trust account practices were deficient and committed to bringing her practices into compliance with the Rules of Professional Conduct".
However, later in the year, one of her clients filed a grievance alleging that Liu had mishandled his entrusted funds, indicating that her pattern of misconduct continued even after giving assurances to the State Bar that she had amended her practices.
Discipline
The hearing panel of the Disciplinary Hearing Commission took into account mitigating factors, such as the absence of prior discipline, cooperation with the disciplinary proceedings, and her lack of experience in practicing law (Liu was admitted to the bar in 2018 after obtaining her legal degree from North Carolina Central University while teaching statistics at Duke Law School).
The order also explained the significance of Liu's behavior, describing the importance of maintaining the "vital trust" that clients and the public must have in the legal system:
9. Defendant's failure to properly maintain, manage, and handle entrusted funds betrays a vital trust clients and the public place in attorneys and the legal profession. Clients are entitled to have their funds handled with the utmost care.
10. Defendant's failure to properly maintain a trust account placed entrusted client funds at risk and has the potential to cause significant harm to the standing of the profession in the eyes of the public because it shows her disregard for certain of her duties as an attorney. This tends to erode the public's confidence in attorneys. Such erosion of public confidence in attorneys tends to sully the reputation of, and fosters disrespect for, the profession as a whole. Confidence in the legal profession is a building block for public trust in the entire legal system.
Due to the seriousness and repeated nature of the misconduct, the panel concluded that a lesser discipline such as a reprimand or censure would be insufficient:
The Hearing Panel has considered all lesser sanctions including: censure, reprimand, and admonition, and finds that discipline less than a stayed suspension would not adequately protect the public from Defendant's future misconduct because Defendant has been unable to prevent over-disbursement and misapplication of entrusted funds in her possession, because of the gravity of potential significant harm to clients, and because a period of reporting pursuant to a stayed suspension is necessary to ensure Defendant's proper handling of entrusted funds.
Public Life
At the time the discipline was issued and published by the State Bar, Liu was a member of the Cary Town Council representing District D, where she served a four-year term after election in 2019.
In 2022, Liu ran unopposed in the Democratic primary for House District 21, which then included Morrisville and West Cary, winning the Democrat heavy seat with 67.69% of the vote.
Liu is currently running for reelection; although HD 21 has been significantly altered in the latest redistricting, shifting it South to include precincts on the West side of Apex as it stretches the length of the Chatham-Wake border, it remains a "Safe Democratic" district with a rating of D+13 in the 2024 Civitas Partisan Index.
Despite the fact that Liu occupied a position of public trust for the full three years she was subject to this discipline, it appears to have attracted no coverage in any local media until it was brought to the attention of yours truly.
"When a concerned citizen brought to my attention the suspension of my opponent’s law license, I reached out to Mr. Horn for further investigation," said Mary Miskimon, who is facing Liu this November as the Republican candidate for HD 21. "The voters deserve to understand the details of the suspension so they can make an informed decision."
When reached out to for comment, Liu requested an extension until last Friday (September 13th) to respond; however, nothing has been received from her since.
UPDATE: Liu has provided the following statement:
When I first started practicing law, my office experienced difficulties maintaining trust accounts due to my inexperience and limited knowledge of accounting software and reporting requirements. These mistakes occurred during my first year of practice, and each one was promptly corrected once discovered. Like many small business owners, I found it overwhelming to balance learning accounting, managing staff, and mastering new software while launching a new business in this field.
I fully cooperated with the State Bar, and we reached an agreement through a Consent Order. The penalty was license suspension; however, the suspension was withheld under the condition that I implement proper procedures for managing trust accounts. I have done just that and will continue to follow these procedures. Thus, the suspension was never activated as I submitted all required reports on time and remained in full compliance with the order. The stayed period has now ended, and I am in good standing with the State Bar.
This experience taught me valuable lessons, and I empathize with the challenges that many small business owners face. I am committed to advocating for small business owners and finding ways to help them navigate difficult situations.