BEFORE THE HEARING BOARD

OF THE

ILLINOIS ATTORNEY REGISTRATION

AND

DISCIPLINARY COMMISSION

COMPLAINT

Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission, by his attorney, Tracy L. Kepler, pursuant to Supreme Court Rule 753(b), complains of Respondent Paul Leslie Shelton, who was licensed to practice law in Illinois on November 7, 1985, and alleges that Respondent has engaged in the following conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, and which subjects Respondent to discipline pursuant to Supreme Court Rule 770:

COUNT I
(Conflict of interest and fraudulent conduct - John LaRocque)

1. In or about 2004, Respondent and John LaRocque ("LaRocque") became acquainted through their sons who played Little League baseball together. In or about June 2004, Respondent told LaRocque that Respondent was in the business of purchasing and investing in real property sold by the United States Department of Housing and Urban Development ("HUD"), and then selling those properties for a profit. At that time, Respondent asked LaRocque if LaRocque would like to invest in those properties, to which LaRocque agreed.

2. In or about 2004, Respondent and LaRocque formed JP Foundation, LLC ("the foundation"), a limited liability company. Respondent and LaRocque were the foundation's only members. Between about 2004 and through 2007, through JP Foundation, LaRocque provided approximately six to nine million dollars in funding for Respondent's purchase of approximately 11 HUD properties.

3. During that same period of time, in approximately 11 other transactions, LaRocque provided the funding for the purchase of the properties, but retained no ownership interest in them. In those 11 transactions, LaRocque insisted that he be given a mortgage to secure the money that he had supplied for the purchase of the properties. Because LaRocque knew that Respondent was a real estate attorney, a licensed real estate broker, a licensed mortgage broker and a member of the National Association of Realtors, LaRocque believed Respondent was experienced in the area of real estate transactions, and believed Respondent was his and the foundation's attorney in the preparation all of the legal documents and the legal work necessary to protect LaRocque's interest in the various properties.

4. By reason of the trust and confidence that LaRocque placed in Respondent as his attorney, Respondent stood in a position of a fiduciary to LaRocque. As such, Respondent owed LaRocque the fiduciary duties attendant to the attorney-client relationship, including the duty to perform the requested services with the highest degree of honesty, fidelity, and good faith, a duty of undivided loyalty, a duty to avoid placing himself in a position where his interests would conflict with the interests of his client and a duty of care.

5. On or about March 5, 2006, LaRocque lent Respondent $385,000 to invest in a property located at 2720 West Warren in Chicago (the "Warren property"). Since title to the property was going to remain in the name of Henry Tate, the then-owner of the Warren property, LaRocque requested a mortgage on the property to secure the loan. Respondent prepared the mortgage documents on LaRocque's behalf, and, on March 24, 2006, Respondent also handled the closing on the Warren property.

6. At some point on or prior to April 23, 2007, Respondent prepared a release of mortgage (the "purported release") of LaRocque's mortgage on the Warren property. Respondent, or someone acting on his direction, signed LaRocque's name to the purported release. Respondent then notarized the purported signature of LaRocque on the purported release. In his handwritten notary acknowledgement on the purported release, Respondent stated "subscribed and sworn to before me on this 1^st day of February, 2007." Respondent signed and affixed his notary stamp to the purported release.

7. At no time had Respondent observed LaRocque sign the purported release, and at no time had LaRocque signed the purported release, or released his interest in the mortgage on the Warren property.

8. Respondent's statement in his notary acknowledgement on the purported release, that Respondent had witnessed LaRocque sign the purported release, was false, in that Respondent never witnessed LaRocque sign the purported release. Instead, Respondent knew that he, or someone acting on his direction, placed LaRocque's signature on the purported release.

9. At the time of the events described in this complaint, the Illinois Notary Act, 5 ILCS §312/6-102, required that notary publics witness the signature being notarized or verify that the signature on the document is that of the person whose signature is being notarized. 5 ILCS §312/7-105 provided that a notary who willfully violates the act is guilty of a Class A misdemeanor, and that a notary who recklessly or negligently violates the act is guilty of Class B misdemeanor.

10. By notarizing LaRocque's signature on the purported release of mortgage without witnessing him sign the purported release of mortgage, Respondent engaged in criminal conduct in violation of 5 ILCS §312/6-102 and 5 ILCS §312/7-105.

11. On or about April 23, 2007, Respondent, or someone acting on his direction, recorded the purported release referenced in paragraph six above with the Cook County Recorder of Deeds.

12. In or about November 2007, LaRocque contacted Respondent and informed him of the following: that his brother, Michael LaRocque ("Michael"), was researching another matter for LaRocque on the Cook County Recorder of Deeds website, that Michael had located the purported release on the Warren property held by LaRocque as referenced in paragraph six above, that Michael asked LaRocque if he had released the mortgage, and LaRocque told him that he knew nothing about it. LaRocque also told Respondent that Michael had obtained a copy of the purported release and LaRocque told Respondent that the signature on the purported release was not his.

13. At or about this same time, Respondent agreed to pay LaRocque a portion of the loan on the Warren property, and further offered to give LaRocque a promissory note for $265,000 to be secured by a second mortgage on Respondent's personal residence in Hinsdale, Illinois (the "Hinsdale property"). LaRocque accepted the offer. Respondent prepared the mortgage and the promissory note and executed the documents on March 5, 2008.

14. Pursuant to the terms of the note, Respondent was to pay LaRocque $3,215.18 on the 1^st day of each month, starting on May 1, 2008, and until March 31, 2018, with a balloon payment equal to the remaining principal and an interest rate of 8%. The note also provided for late charges of $100 for every payment received after the 15^th of each month. Respondent then sent the executed documents to LaRocque and requested that LaRocque not record the documents with the Recorder of Deeds until after Respondent refinanced his then-existing first mortgage on his home. LaRocque recorded the second mortgage on the Hinsdale property on August 13, 2008.

15. At no time did Respondent disclose to LaRocque all elements of Respondent's financial condition, including Respondent's ability to repay the funds under the terms of the promissory note.

16. At no time did Respondent inform LaRocque that there was a potential for a conflict of interest between his role as the attorney and his role as someone with whom he was entering into a business transaction.

17. At no time did Respondent advise LaRocque to seek the advice of an independent attorney with regard to the transaction described in paragraphs thirteen and fourteen, above.

18. As of December 11, 2008, Respondent had only made six payments under the terms of the note to LaRocque, and as a result, LaRocque sent a default notice to Respondent. Respondent received the default notice shortly after it was sent. Respondent did not respond to the notice or make any payment to LaRocque.

19. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. breach of fiduciary duty owed to LaRocque;

2. overreaching the attorney-client relationship;

3. representing a client when the representation of that client may be materially limited by the lawyer's own interests, in violation of Rule 1.7(b) of the 1990 Illinois Rules of Professional Conduct;

4. entering into a business transaction with a client wherein the lawyer and the client have or may have conflicting interests therein, in violation of Rule 1.8(a)(1) of the 1990 Illinois Rules of Professional Conduct;

5. entering into a business transaction with a client when the client has not consented after full disclosure, in violation of Rule 1.8(a)(2) of the 1990 Illinois Rules of Professional Conduct;

6. committing a criminal act, violation of 5 ILCS 312/6-102 and 5 ILCS 312/7-105, that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the 1990 Illinois Rules of Professional Conduct;

7. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the 1990 Illinois Rules of Professional Conduct;

8. conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the 1990 Illinois Rules of Professional Conduct; and

9. conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.

COUNT II
(Misrepresentation to the Tribunal - LaRocque)

20. The Administrator realleges the allegations contained in paragraphs one through eighteen, above.

21. Between February 12, 2009 and October 28, 2010, LaRocque sent Respondent five demand notices requesting payment on the note. Respondent received the notices shortly after each was sent. Respondent did not respond to the demand notices or make any further payment to LaRocque under the terms of the March 5, 2008 note described in paragraph thirteen, above.

22. On or about December 2, 2010, counsel for LaRocque sent Respondent a final demand notice. Respondent received the final demand notice shortly after it was sent. Respondent did not reply to the notice or make any payment to LaRocque.

23. On December 30, 2010, counsel for Wells Fargo Bank caused to be filed a complaint to foreclose Wells Fargo's mortgage on the Hinsdale property in the 18^th Judicial District. The clerk of the court docketed the matter as Wells Fargo Bank, N.A. v. Paul Shelton, et al., case number 2010 CH 7327. In the complaint, counsel for Wells Fargo named LaRocque as a defendant because he was the holder of the second mortgage on the Hinsdale property.

24. On February 4, 2011, counsel for LaRocque caused to be filed his appearance, an answer and a counterclaim to foreclose the second mortgage on the Hinsdale property and seeking judgment on the March 8, 2008 promissory note in case number 2010 CH 7327.

25. On June 13, 2011, Respondent caused to be filed a motion to strike LaRocque's counterclaim and a motion to dismiss the complaint filed against him by Wells Fargo Bank in case number 2010 CH 7327. In his motion to strike, Respondent alleged that the second mortgage and promissory note on the Hinsdale property, that Respondent had himself prepared, were invalid because LaRocque had not complied with the Real Estate Settlement Procedures Act and because the date was missing from the notary clause, even though Respondent himself had prepared the clause and procured the notary.

26. On May 1, 2012, counsel for LaRocque caused to be filed a motion for partial summary judgment in case number 2010 CH 7327.

27. On July 24, 2012, the court entered an order in case number 2010 CH 7327 granting partial summary judgment against Respondent in the amount of $237,972.94, as well as attorneys' fees and costs, but continued the determination of the amount of fees and costs to be awarded until October 18, 2012. The order also directed LaRocque to file an affidavit by August 12, 2012, attesting to amount of fees expended, and directed Respondent to file any response on September 4, 2012, and LaRocque to file any reply on September 18, 2012.

28. On August 23, 2012, Respondent caused to be filed his motion to reconsider the Court's July 24, 2012 order in case number 2010 CH 7327. At no time did Respondent serve notice of the motion on counsel for LaRocque.

29. On October 12, 2012, Respondent caused to be filed his motion for an extension of time and/or leave to file responsive pleadings and motion for summary judgment on counterclaims in case number 2010 CH 7327. Respondent set the motion for a hearing on October 17, 2012. In his proof of service, Respondent stated that he served a copy of the motion "by faxing a copy to the above listed parties [Ira T. Nevel ("Nevel"), counsel for Wells Fargo, and Carl Poli ("Poli"), counsel for LaRocque], by emailing a copy to the attorney for the Plaintiff, and by next day mail, before 4:00 p.m. on October 12, 2012."

30. Respondent did serve a copy of the motion on Nevel, but at no time did Respondent serve a copy of the notice of filing or the motion on Poli or any other of counsel for LaRocque.

31. Respondent's statement in his proof of service referenced in paragraph 29 above, was false, and Respondent knew it was false because at no time did Respondent serve a copy of the motion on Poli.

32. At the October 17, 2012 hearing, at which only Respondent and counsel for Wells Fargo appeared, the Court questioned Respondent as to whether or not he had provided notice of his motion to counsel for LaRocque. Respondent advised the court that he had provided proper notice to counsel for LaRocque.

33. Respondent's statement to the court that he had provided notice of his motion to counsel for LaRocque was false, and Respondent knew it was false because Respondent did not provide notice of the motion to counsel for LaRocque.

34. Following the hearing on October 17, 2012, the court entered an order in case number 2010 CH 7327, inter alia, granting Respondent's motion for an extension of time, and allowing him 28 days to file a responsive pleading, and striking the court date of October 18, 2012.

35. On October 18, 2012, Poli and Joseph Fortunato ("Fortunato"), counsel for LaRocque, appeared for the previously-scheduled hearing to find that case number 2010 CH 7327 was not listed on the court's docket for that day. At that time, Poli and Fortunato requested that the matter be added to the court's call. At the ensuing hearing, Poli and Fortunato advised the court that they had not received notice of Respondent's October 12, 2012 motion. Following the hearing, the court entered an order finding, inter alia, that counsel for LaRocque had not been served with the notice of motion that was heard by the court on October 17, 2012, granting the motion for attorneys' fees against Respondent, and entering judgment in the amount of $25,325 against Respondent.

36. As of April 8, 2013, the date on which a panel of the Inquiry Board voted that a complaint be filed in this matter, Respondent had not appealed the court's October 18, 2012 judgment in case number 2010 CH 7327 nor had he paid any portion of the judgment.

37. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. knowingly making a false statement of fact to a tribunal, in violation of Rule 3.3(a)(1) of the Illinois Rules of Professional Conduct;

2. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct;

3. conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct; and

4. conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.

COUNT III
(Conflict of interest and dishonest conduct - Peter Blythe)

38. At all times prior to September 27, 2011, Respondent was a licensed real estate broker and the sole shareholder of Shelton Law Group, LLC ("the law firm"). Respondent was also an approved attorney for Stewart Title of Illinois ("Stewart Title"). As an approved attorney for Stewart Title, Respondent acted as an agent for Stewart Title and reviewed title reports and issued title policies in connection with certain real estate transactions.

39. At all times alleged in this count of the complaint, Respondent held a fifty percent ownership interest in Trust One Mortgage Corporation ("Trust One"), an Illinois licensed residential mortgage brokerage company. Elizabeth Karwowski-Amato ("Amato") held the other fifty percent ownership in Trust One, and Respondent and Amato were the only directors of Trust One. Amato served as the President of Trust One and handled the mortgage, loan origination and financing side of the business. Respondent served as the Vice-President, Secretary and Registered Agent of Trust One, and handled the legal services for Trust One clients, including, but not limited to, ordering and clearing title and/or legal representation at closings on properties.

40. On or about February 22, 2006, Respondent incorporated Shelton & Associates, LLC, a real estate limited liability firm engaged in the business of real estate brokerage. Respondent was the only member of Shelton & Associates, LLC, and acted as its managing broker. Shelton & Associates, LLC, received its real estate brokerage license from the Illinois Department of Banks and Real Estate on November 15, 2006.

41. At all times alleged in this count of the complaint, 225 ILCS 454/20-20(h)(25) of the Illinois Real Estate Act provided that the Office of Banks and Real Estate may refuse to issue or renew a license, may place on probation, suspend, or revoke any license, or may censure, reprimand, or otherwise discipline or impose a civil fine not to exceed $25,000 upon any attorney-licensee who acts as the attorney for either the buyer or the seller in the same transaction in which the attorney-licensee is acting or has acted as a broker or salesperson.

42. At all times alleged in this count of the complaint, the Title Insurance Act, 215 ILCS 155/18, provided that:

(b) No title insurance company, independent escrowee, or title insurance agent may issue a title insurance policy to, or provide services to an applicant if it knows or has reason to believe that the applicant was referred to it by any producer of the title business or by any associate of such producer, where the producer, the associate, or both, have a financial interest in the title insurance company, independent escrowee, or title insurance agent to which business is referred unless the producer has disclosed to any party paying for the products or services, or his representative, the financial interest of the producer of title business or associate referring the title business and a disclosure of an estimate of those charges to be paid… Such disclosure must be made in writing on forms prescribed by the Director prior to the time that the commitment for title insurance is issued.

43. At all times alleged in this count of the complaint, Peter Blythe ("Blythe") was an investor who Respondent knew was interested in buying and selling distressed properties for a profit.

44. Between approximately September 2005 and through April 2006, Respondent represented Blythe with respect to Blythe's purchases and subsequent sales of the following real properties: 5926 South Parnell Avenue in Chicago; 5326 South Justine Street in Chicago; 5126 South Justine Street in Chicago; and 9430 South Ada in Chicago.

45. For each of Blythe's transactions, as referenced in paragraph 44 above, as an agent and approved attorney for Stewart Title, Respondent ordered title policies and examined title with respect to each property. As a result of his relationship with Stewart and the services provided on each matter, Respondent received $10,600 in total fees from the transactions.

46. For the purchase of the property located on 9430 South Ada, and the sales of the properties located on 5126 and 5326 South Justine, Shelton & Associates, LLC acted as the real estate broker and received $10,800 in total commissions.

47. For each sale of the properties listed in paragraph 44 above, Trust One acted as the mortgage broker and received $24,014 in total commissions from the Blythe closings.

48. For each of Blythe's transactions as referenced in paragraph 44 above, as the attorney for Blythe, Respondent received a total of $6,000 in document preparation fees.

49. At all times alleged in this count of the complaint, as a result of the attorney-client relationship, Blythe expected Respondent to exercise his independent professional judgment for Blythe's protection in the purchases and sales referenced in paragraph 44, above.

50. By reason of the trust and confidence that Blythe placed in Respondent pursuant to the attorney-client relationship, Respondent stood in a position of a fiduciary to Blythe. As such, Respondent owed Blythe the fiduciary duties attendant to the attorney-client relationship, including the duty to perform the requested services with the highest degree of honesty, fidelity, and good faith, a duty of undivided loyalty and a duty to avoid placing himself in a position where his interests would conflict with the interests of his client.

51. At no time did Respondent disclose to Blythe that he was prohibited by statute from serving as the real estate broker and attorney to the same transaction.

52. At no time did Respondent disclose to Blythe the implications of his serving as the real estate broker and attorney to the same transaction and the risks involved.

53. At no time did Respondent advise Blythe of the possible conflict between Blythe's interests and Respondent's financial interest in a successful closing on the properties. Nor did Respondent disclose to Blythe the possible effect of Respondent serving as the real estate broker, mortgage broker and attorney to the same transaction on the exercise of his independent professional judgment.

54. At no time during the course of representing Blythe in the transactions referenced in paragraph 44 above, did Respondent inform Blythe that Respondent was an agent and approved attorney for Stewart Title, or that Respondent was receiving a financial benefit as a result of his use of Stewart Title, as required pursuant to 215 ILCS 155/18(b).

55. Following an investigation into Respondent's conduct related to the real estate transactions concerning the properties located at 5126 and 5326 South Justine, the Director of the Division of Professional Regulation of the Illinois Department of Financial and Professional Regulation ("IDFPR") caused to be filed a complaint against Respondent. The clerk of the IDFPR docketed the matter as Department of Financial and Professional Regulation of the State of Illinois v. Paul Shelton, case number 2010-08633.

56. On January 3, 2011, attorneys for IDFPR caused to be filed an amended complaint in case number 2010-08633. At no time did Respondent file an answer or any responsive pleading. Respondent did not appear at the hearing held in case number 2010-08633 on March 22, 2011, and on that same date, the court entered a default order against Respondent.

57. On July 18, 2011, the Real Estate Administration and Disciplinary Board of the Division of Professional Regulation of IDFPR (the "Board") issued its findings of fact, conclusions of law and recommendation to the Director of IDFPR. The Board found that Respondent acted as a real estate broker and an attorney in the same transaction, aided and abetted the unlicensed practice of real estate in the State of Illinois, and in so doing, engaged in dishonorable, unethical and unprofessional conduct of a character likely to deceive, defraud or harm the public. On September 27, 2011, the Director of the IDFPR signed an order indefinitely suspending Respondent's license as a real estate broker and assessing a $25,000 fine against him.

58. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. overreaching the attorney-client relationship;

2. representing a client when the representation of that client may be materially limited by the lawyer's own interests, in violation of Rule 1.7(b) of the 1990 Illinois Rules of Professional Conduct;

3. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the 1990 Illinois Rules of Professional Conduct; and

4. conduct that tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.

COUNT IV
(Failure to respond to a lawful demand for information from the Commission-Peter Blythe)

59. On or about November 30, 2011, the Administrator received a request for an investigation of a lawyer from Craig M. Capilla of IDFPR regarding the matters set forth above in Count III. On or about that same date, the Administrator initiated a disciplinary investigation which was docketed as "Paul Leslie Shelton in relation to Craig Capilla," Administrator's investigation number 2011 IN 5506.

60. On December 5, 2011, the Administrator sent Respondent a letter requesting that he submit information in relation to Administrator's investigation number 2011 IN 5506 within fourteen days. The letter also enclosed a subpoena duces tecum requesting production on December 30, 2011 of Respondent's client files related to the real estate transaction involving 5126 South Justine in Chicago. Respondent received the letter and subpoena on or about December 8, 2011. Respondent did not respond to the letter within fourteen days, and at no time did Respondent produce the requested documentation.

61. On January 9, 2011, the Administrator sent a second letter requesting that Respondent submit information and documents in relation to Administrator's investigation number 2011 IN 5506 within seven days. Respondent received the letter shortly thereafter. Respondent did not respond to the letter.

62. On January 26, 2012, the Administrator issued a subpoena duces tecum requiring Respondent to appear at the Chicago office of the Commission on February 29, 2012, and to give sworn testimony and produce his client files in connection with Administrator's investigation number 2011 IN 5506. The subpoena was issued as a result of Respondent's failure to respond to the Administrator's prior requests for information relative to Administrator's investigation number 2011 IN 5506. Respondent received the letter and subpoena on or about January 28, 2012.

63. On February 29, 2012, the Administrator received Respondent's written response in relation to Administrator's investigation number 2011 IN 5506. Respondent did not appear on February 29, 2012 for his sworn statement, nor did he produce the requested documentation.

64. As of April 8, 2013, the date on which a panel of the Inquiry Board voted that a complaint be filed in this matter, Respondent had not provided the documents requested by the subpoena and had not communicated with counsel for the Administrator to reschedule his sworn statement. At no time had the Administrator waived or excused Respondent's appearance or the production of documents.

65. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. failure to respond to a lawful demand for information from a disciplinary authority, in violation of Rule 8.1(b) of the Illinois Rules of Professional Conduct;

2. conduct prejudicial to the administration of justice, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct; and

3. conduct which tends to defeat the administration of justice or which brings the courts or the legal profession into disrepute.

COUNT V
(Unauthorized practice of law)

66. Respondent was admitted to practice law in Illinois on November 7, 1985.

67. At all times alleged in this count of the complaint, Supreme Court Rule 756(a) required that every attorney admitted to practice law in Illinois, who was not over 75 years of age or actively serving in the armed forces of the United States, register and pay an annual registration fee to the Commission on or before the first day of January of each year.

68. At all times alleged in this count of the complaint, Supreme Court Rule 756(d) required the Administrator to, on February 1 of each year, remove from the master roll of attorneys authorized to practice law in Illinois the name of any attorney who has not registered for that year as required by Supreme Court Rule 756(a).

69. At no time alleged in this count of the complaint was Respondent over 75 years of age or actively serving in the armed forces of the United States. As of February 1, 2006, Respondent had not registered or paid the annual fee due on January 1, 2006, and on February 6, 2006, the Administrator removed Respondent's name from the master roll of attorneys authorized to practice law in Illinois.

70. After February 6, 2006, Respondent was not authorized to practice law in Illinois.

71. As of February 6, 2006, Respondent knew or should have known that he was not authorized to practice law in Illinois.

72. At no time between January 1, 2006 and April 18, 2006, did Respondent register with the Commission, pay the required annual fee or submit a written application seeking to be excused from the requirement that he pay the annual registration fee. On April 18, 2006, Respondent filed his registration form and paid the fee which had been due for 2006.

73. Between February 21, 2006 and April 18, 2006, Respondent represented Peter Blythe ("Blythe") in the following real estate transactions:

5926 South Parnell in Chicago on February 21, 2006
5126 South Justine in Chicago on March 15, 2006
5326 South Justine in Chicago on March 15, 2006
9430 South Ada in Chicago on April 13, 2006

74. On February 10, 2006, Respondent represented Janis Tassone ("Tassone") in a real estate transaction involving the real property located on Minnesota Circle in Carol Stream, Illinois.

75. On March 26, 2006, Respondent represented John LaRocque in a real estate transaction involving the real property located on West Warren Blvd. in Chicago, Illinois.

76. At no time did Respondent inform Blythe, Tassone or LaRocque that he was not licensed to practice in the State of Illinois.

77. Based on the conduct described above, Respondent has engaged in the following misconduct:

1. practicing law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction, in violation of Rule 5.5(a) of the 1990 Illinois Rules of Professional Conduct;

2. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the 1990 Illinois Rules of Professional Conduct;

3. conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the 1990 Illinois Rules of Professional Conduct; and

4. conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.

COUNT VI
(Improper and excessive fee, neglect, failure to withdraw, false statements to third persons and failure to return unearned fees and costs)

78. Between approximately August 2009 and February 2012, Respondent represented various homeowners in the defense of mortgage foreclosure actions. In some of the clients' matters, a foreclosure complaint had already been filed against the client and judgments of foreclosure had already been entered at the time the client retained Respondent.

79. For each representation, Respondent, through the Shelton Law Group, LLC ("SLG"), and each client entered into an agreement entitled "Attorney-Client Agreement-Foreclosure Defense" (the "agreement").

80. Pursuant to the terms of the agreement, each client acknowledged that SLG "waived its customary $4,000.00 upfront classic retainer used to secure that SLG is retained to defend a foreclosure action filed against Client."

81. The agreement further provided for the following:

"Classic Retainer Fee (Monthly): Payment of $600.00 is due upon signing of the agreement and monthly thereafter beginning on the same day of each month, and approximately 30 days following the signing of the agreement, as and for services to be performed monthly and in the future. Payment shall be made monthly and is non-refundable. SLG shall continue to work on Client's file provided payments are made monthly and there is Cooperation of Client…Client will execute an ACH form for payment monthly."

82. The amount of the monthly retainer fee paid by each client ranged from $600 to $700 and was collected by Respondent regardless of whether or not any services were performed on the clients' cases for each month.

83. In addition, pursuant to the agreement, each client paid upfront costs ranging from $300-$500 at the time of signing the agreement.

84. At all times alleged in this count of the complaint, Respondent deposited the monthly fees and costs paid by each client pursuant to the agreement into his business operating account ending in the four digits 3173, at Citizens First National Bank, titled "Shelton Law Group LLC, Title Account."

85. The following homeowners executed the agreement referenced in paragraph 79, above, wrote checks made payable to, or authorized monthly direct debit payments to, SLG totaling the amounts and during the period of the representation indicated below:

86. In each of the representations referenced above, Respondent engaged in a pattern and practice of delay and neglect in that he did not respond to clients' requests for a status on the progress of their cases, did not take timely action on their matters, including, but not limited to, filing appearances, responding to motions, appearing in court on scheduled court dates, contacting the clients' lenders, and withdrawing from cases after the clients terminated the representation.

87. In many of the representations referenced above, Respondent's inaction or improper action caused legal harm and prejudice to the clients, including, but not limited to, the clients' inability to obtain a modification of the terms of their mortgage, the loss of ownership of the clients' property and/or eviction from the property.

88. As part of Respondent's practice of delay and neglect during the course of the representations referenced above, during the course of the attorney-client relationship, Respondent, or someone acting on his direction, drafted various notices of service of discovery pleadings and motions in which he falsely stated that service of same was purportedly served on opposing counsel. Respondent then forwarded copies of these documents to the Cook County Sheriff's Office in an effort to forestall the clients' eviction from the property.

89. Each of the clients referenced in paragraph 85 above requested a refund from Respondent of the unearned fees and costs paid to Respondent.

90. For each client matter referenced in paragraph 85, above, Respondent did not provide sufficient services to earn the fees collected, nor did he expend on the clients' behalf the funds paid for the payment of costs.

91. As of April 8, 2013, the date a panel of the Inquiry Board voted that a complaint be filed in this matter, Respondent had not taken any further action on any clients' behalf, nor had he refunded any unearned portion of his fee or the costs to the clients.

92. By reason of the conduct set forth above, Respondent has engaged in the following misconduct:

1. failing to act with reasonable diligence and promptness in representing a client, in violation of Rule 1.3 of the Illinois Rules of Professional Conduct;

2. failure to reasonably consult with the client about the means by which the client's objectives are to be accomplished, failure to keep the client reasonably informed about the status of a matter and failure to promptly comply with reasonable requests for information, in violation of Rule 1.4(a)(2-4) of the Illinois Rules of Professional Conduct;

3. failure to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation, in violation of Rule 1.4(b) of the Illinois Rules of Professional Conduct;

4. making an agreement for, charging and collecting an unreasonable fee, in violation of Rule 1.5(a) of the Illinois Rules of Professional Conduct;

5. failing to hold property of clients in the lawyer's possession in connection with a representation separate from the lawyer's own property, in violation of Rule 1.15(a) of the Illinois Rules of Professional Conduct;

6. failing to deposit in a client trust account funds received to secure payment of legal fees and expenses, in violation of Rule 1.15(c) of the Illinois Rules of Professional Conduct;

7. failing to withdraw from the representation after the lawyer has been discharged by the client, in violation of Rule 1.16(a)(3) of the Illinois Rules of Professional Conduct;

8. failing to refund the unearned portion of a fee paid in advance, in violation of Rule 1.16(d) of the Illinois Rules of Professional Conduct;

9. failing to make reasonable efforts to expedite litigation consistent with the interests of the client, in violation of Rule 3.2 of the Illinois Rules of Professional Conduct;

10. in the course of representing a client, knowingly making a false statement of material fact to a third person, in violation of Rule 4.1(a) of the Illinois Rules of Professional Conduct;

11. conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct;

12. conduct prejudicial to the administration of justice, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct; and

13. conduct which tends to defeat the administration of justice or bring the courts or legal profession into disrepute.

COUNT VII
(Failure to respond to a lawful demand for information from the Commission - Nunez and Malkinski)

93. On or about July 6, 2012, the Administrator received a request for an investigation of a lawyer from Hector Nunez and Lisa Malkinski regarding the matters set forth above in Count VI. On or about that same date, the Administrator initiated a disciplinary investigation which was docketed as "Paul Leslie Shelton in relation to Hector Nunez and Lisa Malkinski," Administrator's investigation number 2012 IN 3356.

94. On or about July 12, 2012 and August 7, 2012, counsel for the Administrator sent Respondent a letter requesting that he submit information in relation to Administrator's investigation number 2012 IN 3356. On or about August 8, 2012, the Commission received Respondent's written response.

95. On or about October 22, 2012, counsel for the Administrator sent Respondent a letter and enclosed a subpoena duces tecum requesting production of Respondent's client file in relation to his representation of Nunez and Malkinski on November 13, 2012. Respondent received the letter and subpoena shortly after it was sent.

96. At no time did Respondent produce the documents requested by subpoena.

97. As of April 8, 2013, the date on which a panel of the Inquiry Board voted that a complaint be filed in this matter, Respondent had not produced the documents requested by subpoena or communicated further with the Administrator about this matter. At no time did the Administrator waive or excuse Respondent's production of the documents.

98. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. failure to respond to a lawful demand for information from a disciplinary authority, in violation of Rule 8.1(b) of the Illinois Rules of Professional Conduct; and

2. conduct which tends to defeat the administration of justice or which brings the courts or the legal profession into disrepute.

COUNT VIII
(Failure to respond to a lawful demand for information from the Commission and misrepresentation - Lillian and Demetrios Paschal)

99. On or about October 1, 2012, the Administrator received a request for an investigation of a lawyer from Lillian Paschal regarding the matters set forth above in Count VI. On or about that same date, the Administrator initiated a disciplinary investigation which was docketed as "Paul Leslie Shelton in relation to Lillian Paschal," Administrator's investigation number 2012 IN 4961.

100. On October 5, 2012 and October 31, 2012, counsel for the Administrator sent Respondent a letter requesting that he submit information in relation to Administrator's investigation number 2012 IN 4961. On October 31, 2012, Respondent submitted his written response.

101. On December 31, 2012, and January 22, 2013, counsel for the Administrator sent Respondent a letter requesting production of his client files in relation to his representation of Lillian and Demetrios Paschal.

102. On January 19, 2013, Respondent sent a letter to counsel for the Administrator requesting an extension of time until January 25, 2013 to produce the client file. In his letter, Respondent stated, inter alia, that "I had a securitization audit performed on Ms. Paschal's file and many of the original documents are with the auditor and I will not have them back until over the weekend or Tuesday."

103. Respondent's statements in his January 19, 2013 letter that he had a securitization audit performed on the Paschal's file and that many of the originals were with the auditor were false. Respondent knew that the statements were false because at no time did he have a securitization audit performed on the Paschal's file or provide any documentation to an auditor.

104. On February 1, 2013, counsel for the Administrator issued a subpoena duces tecum requiring Respondent to appear at the Chicago office of the Commission on February 27, 2013, and to give sworn testimony and produce his client file in connection with Administrator's investigation number 2012 IN 4961. Respondent received the subpoena on or about February 4, 2013.

105. On February 23, 2012, Respondent produced his client file to counsel for the Administrator. Respondent did not appear on February 27, 2013 for his sworn statement, and at no time did the Administrator waive or excuse Respondent's presence at the sworn statement.

106. As of April 8, 2013, the date on which a panel of the Inquiry Board voted that a complaint be filed in this matter, Respondent had not communicated with counsel for the Administrator to reschedule the sworn statement.

107. By reason of the conduct described above, Respondent has engaged in the following misconduct:

1. knowingly making a false statement of a material fact in connection with a disciplinary matter, in violation of Rule 8.1(a) of the Illinois Rules of Professional Conduct;

2. failure to respond to a lawful demand for information from a disciplinary authority, in violation of Rule 8.1(b) of the Illinois Rules of Professional Conduct;

3. conduct involving fraud, dishonesty, deceit or misrepresentation, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct;

4. conduct prejudicial to the administration of justice, in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct; and

5. conduct which tends to defeat the administration of justice or which brings the courts or the legal profession into disrepute.

WHEREFORE, the Administrator requests that this matter be assigned to a panel of the Hearing Board, that a hearing be held, and that the panel make findings of fact, conclusions of fact and law, and a recommendation for such discipline as is warranted.