NYS Grievance Committee Suspends New York Foreclosure Defense Attorney Steven Stutman For Misappropriating Funds

On August 13, 2025, the Supreme Court of the State of New York suspended attorney Steven W. Stutman from practicing law for six months. The Grievance Committee accused Stutman of professional misconduct involving the mishandling of client funds.

The 6 month suspension became effective September 12, 2025. Stutman’s suspension stems from a disciplinary proceeding initiated by the Grievance Committee for the Tenth Judicial District.

The case number is 2022-06169.

The court’s decision followed the Grievance Committee’s June 9, 2023 petition. The petition outlined four charges of professional misconduct against Stutman. The charges centered on Stutman’s management of his attorney escrow account at TD Bank. Between September 2018 and December 2019, Stutman repeatedly overdisbursed funds from this account for multiple client matters. This lead to shortages ranging from $25 to $2,724.03.

Stutman’s escrow account balance was $42,018.76 on December 19, 2019. However, Stutman was required to maintain $43,346.30 for 13 clients. As a result, this created a shortfall of $1,327.54.

Further, between December 20 and December 24, 2019, Stutman issued three checks totaling $13,950 related to a client matter. Yet, Stutman did not deposit corresponding funds in the TD Bank escrow account for that case. As a result, this caused payments to be drawn from other clients’ fiduciary funds. By December 26, 2019, the account balance was $18,913.76, against a required $34,191.30 for 11 clients. Thus this reflected a shortage of $15,277.54.

Grievance Committee Throws Down The Hammer On Stutman

The charges alleged violations of the Rules of Professional Conduct. This includes misappropriation of fiduciary funds and improper titling of the escrow account. In addition, Stutman failed to reconcile the account. As a result, this adversely reflected on Stutman’s fitness as a lawyer.

A hearing was held on January 11, 2024. Special Referee David I. Ferber sustained all four charges in a report received on March 25, 2024. The Grievance Committee moved to confirm the report. Stutman and his counsel did not oppose the motion. However, they did request a lesser penalty like a reprimand, probation, or public censure.

Stutman testified at the hearing that the errors were a result of a mistaken deposit. He claims he put the funds into a separate Capital One escrow account. Thus, this caused a deficit when a check was issued. He acknowledged additional errors dating back to 2018. However, he attributed them to accounting mistakes. Stutman expressed remorse and closed both escrow accounts. He then implemented new software and staff oversight to monitor his current single escrow account. He claimed the account is reconciled twice monthly.

The court considered Stutman’s prior disciplinary history. In 2014, ther Grievance Commission issued an admonition to Stutman for similar misconduct. 

In 2020, the Grievance Committee also issued Stutman a letter of advisement. Stutman also received a 2009 letter of caution and a 2008 admonition. As a result, the court deemed a six-month suspension appropriate.

A copy of the original filing can be found here.

This Article Originally Appeared On ForeclosureDefenseNetwork.com

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