North Little Rock attorney gets ban of four years after misconduct allegations

North Little Rock attorney Stephen Morley, a former traffic judge, has been suspended from practicing law for four years as a result of a consent order he signed Nov. 15 to resolve misconduct allegations by state ethics officials.

According to a 41-page order filed Nov. 15 by a panel of the Arkansas Supreme Court Committee on Professional Conduct, the committee’s finding of misconduct stems from Morley’s representation of a Dermott liquor store and its owners over 12 years. The order says an investigation began after the state Department of Finance and Administration shared information with the committee in 2015.

During the department’s investigation of Royal Liquor Store’s 2014 challenge of an audit, “it became clear” to the department that a longtime manager of the store and possibly other family members, “working through or with Morley, had created and carried out a scheme and sham transfer of ownership” of the store “to very cheaply resolve” a previous contested audit, the document states.

The document details a complicated series of transactions undertaken over several years by numerous people and includes “matters in which Morley asserts he did not personally participate.”

However, it alleges that Morley “prepared, had prepared, or was aware of, and provided to the department” a 2007 offer letter that falsely represented details of a sale of the property and furnishings for $40,623 to an outside party. It included a 2007 appraisal estimating the property’s market value at $16,750, and an estimate that the furnishings were worth $19,373.

The letter was purportedly from Shaun Perry, who testified before the committee that he didn’t prepare, sign or even know of the letter to the department until 11 years later, and that his first name was even spelled incorrectly on the documents, according to the filing.

But based on the representations in the letter, the department accepted less than 20% ($40,623) to resolve an outstanding audit debt of $244,201, including tax, penalty and interest, and allowed the transfer of the property “free and clear of tax debt.”

The department “wrote off” about $203,000, allowing Perry to obtain the necessary permits to operate the store, according to the document. But, it says, two days later, Edna Lee, who had owned the store, deeded the property on which the liquor store was located to her son, Dennis Lee, rather than to Perry.

The document describes many more detailed transactions over the years and alleges that Morley gave false information to thwart a department investigation.

The consent agreement was signed by Morley, defense attorney Jeff Rosenzweig and Stark Ligon, the committee’s executive director.