A state agency that investigates attorney behavior has charged a Bluffton lawyer with misconduct in connection with a multimillion dollar estate he managed.
The Office of Disciplinary Counsel of the S.C. Supreme Court alleges that Douglas Delaney failed to disclose conflicts of interest in his handling of a $7.5 million life insurance policy. It also alleges Delaney disobeyed a court order and misrepresented himself as a certified public accountant while managing the estate of Grey Geissler, formerly of Beaufort.
Delaney's attorney, Desa Ballard, points out that investigators do not allege problems with the estate plan he created for Geissler or claim Delaney caused Geissler harm.
Delaney is asking that the charges be dismissed.
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"Please note that the majority of what (was) alleged as misconduct by Mr. Delaney has not been pursued by ODC, which means that most of (the) allegations against Mr. Delaney were found to lack credibility," Ballard wrote in an email.
Geissler's estate included several million in assets, including cash, securities and real estate holdings from her late husband, Rudy Geissler, according to her sister-in-law, Elizabeth Hanahan.
An initial trust was structured to allow Grey Geissler to collect dividends and capital gains totaling about $65,000 a year to live on, according to Hanahan. The principal in the trust was to pass to Rudy's Geissler son. Grey Geissler's children from a prior marriage were not beneficiaries.
Grey Geissler hired Delaney in about 2005. Documents indicate Delaney created a complex estate plan composed of a revocable trust, several limited liability companies, two irrevocable trusts and a charitable lead annuity. Assets worth nearly $2.5 million were ultimately replaced with 20-year promissory notes paying 4 percent interest.
Delaney later bought a $7.5 million life insurance policy from his brother in Grey Geissler's name. He ultimately paid his brother, who was a licensed agent, a $300,000 consultant's fee for the policy. Documents allege the brother then gave or loaned $140,000 to a company owned by Delaney's wife -- a conflict of interest -- without receiving Geissler's written permission.
Geissler fired Delaney about 18 months after she hired him, and documents show he refused to provide her new attorney with an accounting of her trusts.
After being fired, Delaney made a $642,750 payment on the life insurance policy despite a court order barring him from exercising power over Geissler's trusts, documents show. He was fined $44,244 and later settled a lawsuit Geissler filed against him for $200,000, documents show.
Delaney also is accused of claiming to be a CPA, even though he was never issued a CPA license in South Carolina. His license from Pennsylvania expired in 1998.
He also allegedly failed to disclose the Geissler lawsuit on his malpractice insurance application, even though it was still pending.
Hanahan said the family was able to recover most of the assets in her husband's trust after a long legal battle. Geissler is now in her 90s and living in Charleston.
A hearing on the case has not yet been set. Depending on the findings, Delaney could face sanctions up to and including disbarment, according to the Office of Disciplinary Counsel.