Eddings fights to keep law license

May 01--ATLANTA -- Two and a half years after his real estate closing practice was shut down and more than $2 million was found missing from his trust account, Columbus attorney Michael Eddings faced a State Bar of Georgia evidentiary hearing Wednesday to answer charges that could cost him his law license.

Throughout the six-hour hearing, Eddings presented evidence and contended that he had no knowledge of issues in the trust account and placed the blame on his then-wife and office manager Sonya Eddings, who took full responsibility for the misappropriation of funds.

No decision was reached after Wednesday's hearing in front of Special Master Katherine L. McArthur, a Macon attorney who was appointed by the Georgia Supreme Court to handle the matter. McArthur will make a recommendation to the Supreme Court, which will make the final decision on Eddings' punishment. It could range from sanctions to disbarment.

McArthur said it would likely be mid-July before she makes that recommendation. She has given the State Bar and Eddings about a month to make written closing arguments.

Since Eddings' trust accounts were frozen in October 2011, he has not been able to do real estate closings. He still has his law license and has reinvented himself as a criminal defense attorney. There have been no criminal charges against Michael or Sonya Eddings, who divorced after the legal trouble started.

Michael Eddings is facing 10 complaints alleging 34 violations of state bar rules. They all stem from the real estate business in which he was handling as many as 80 closings a month.

Near the end of the hearing, it was McArthur who asked the day's most pointed question.

"How did it get to be over $2 million missing without a firestorm of calls?" she asked Eddings.

"The honest, truthful answer is it was clever and skillful management by Sonya juggling those files," Eddings told the judge.

During testimony, Sonya Eddings outlined about five years of deceit between 2006 and 2011. She told of hiding the fact that she was transferring money from the law firm's trust account into an account for one of their businesses, The Coffee Beanery.

"I knew what I was doing wasn't who I was and was totally against what he stands for, but I got into a situation I couldn't get out of," Sonya Eddings said.

Sonya Eddings had access to the law firm's escrow and operating accounts during the time she was taking the money.

She said she was also the only person in the firm who had the key code to get into the online accounts. Sonya Eddings had previously had a $100,000 a year job with Synovus, which is the parent company of Columbus Bank and Trust, and she used that knowledge to pull off the scheme.

"Sonya was a CB&T insider," Michael Eddings said, "She was known and respected by those at the bank. She got a pass."

There were about 50 overdrafts in the trust account, some of them more than $100,000, said State Bar attorney William J. Cobb. Yet Michael Eddings said he did not know about them and CB&T never alerted him.

Sonya Eddings told the court she would get the law firm's mail each morning and make sure any notice from the bank or the State Bar that would reveal what was happening with the accounts did not reach her husband. She would also alter the bank statements before showing them to her husband, making sure any negative balances had been removed.

Sonya Eddings told the court how the whole fraud came crashing down in October 2011. She was out of town when 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 the Eddings' 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 Eddings were building a $1 million home with an $800,000 construction loan from CB&T.

First American later sued Michael and Sonya Eddings, all of their restaurant holdings and CB&T in U.S. District Court, Middle District of Georgia. First American and CB&T settled out of court and terms of the deal were not released. In dismissing the case in early March, Judge Clay Land issued a $1.99 million judgment for First American against Michael Eddings and a $2.09 million judgment against Sonya Eddings.