The foundation of the attorney-client relationship is unshakeable trust, particularly concerning client finances. When a legal professional deliberately breaches this trust, the consequences are severe, often leading to career-ending sanctions. The disciplinary case of Illinois attorney Ryan S. Kosztya is a stark reminder of this principle, as his pattern of dishonestly misappropriating over $58,000 in client funds and then lying to the court to conceal the theft resulted in a two-year suspension and probation.
Kosztya’s case, handled by the Attorney Registration & Disciplinary Commission (ARDC) of the Supreme Court of Illinois, serves as a textbook example of how the misuse of escrow funds can destroy a legal career.
The Anatomy of Financial Betrayal
Kosztya’s misconduct spanned multiple client matters, demonstrating a pattern of using client money as his personal operating capital. The common thread was the flagrant violation of the rules governing client trust accounts (IOLTA), which exist solely to safeguard money belonging to clients or third parties.
1. The Romano Escrow Fund: Misuse and Cover-Up
In a post-divorce case, Kosztya was required by a court order to hold an $10,400 income tax refund in escrow.
- The Theft: Instead of depositing the money into a secure IOLTA account, he deposited the entire amount into his business operating account. Within weeks, he had drained the account, using the client’s money for his own personal and business expenses, including rent, utilities, and other professional costs.
- The Admission: He later admitted that he “intended to put it back in as soon as humanly possible so purportedly no one would be wiser.” In the eyes of the disciplinary body, the temporary “borrowing” of client funds is dishonest conversion—a serious violation, regardless of the intent to eventually replace the money.
- Client Harm: Due to Kosztya’s inability to properly account for the money he was supposed to be holding, his client was twice held in indirect civil contempt by the court, suffering both legal and financial injury.
2. The Banyai Proceeds: Expanding the Misconduct
In a second, unrelated matter, Kosztya handled over $51,000 in proceeds from a home sale. Once again, he deposited the funds into his business account and subsequently used more than $10,500 of the clients’ money to pay his personal expenses, including childcare and school tuition.
In total, the ARDC found that across these two matters, Kosztya was responsible for the dishonest misappropriation of over $58,000.
Deception Compounded: Lying to the Tribunal
While the conversion of client funds is a severe offense, Kosztya’s efforts to conceal his actions significantly worsened his disciplinary fate. To hide the financial shortages, he knowingly made multiple false statements to the court regarding the status and location of the escrowed funds and filed a false affidavit of compliance. Lying to a tribunal is a direct assault on the integrity of the judicial process and is viewed with the utmost seriousness by the bar.
Conclusion: The Court’s Final Ruling
The Disciplinary Review Board ultimately found that the sheer pattern of misappropriation and the deception used to cover it up mandated a harsh penalty, overriding certain mitigating factors like Kosztya’s cooperation and self-reporting.
The Illinois Supreme Court’s final order was clear: a two-year suspension from the practice of law, followed by a one-year period of probation with mandatory conditions.
The Ryan S. Kosztya case stands as an immutable lesson for every practicing attorney: the trust account is not a line of credit. Any form of conversion or misuse of client funds, coupled with dishonesty toward the court, will lead to a protracted period of suspension, the financial harm of one’s clients, and the near-total destruction of one’s professional reputation.