Wednesday, July 29, 2015

"Racist, Sexist, Homophobic, Offensive Epithets" Gets A Three-Month Suspension

A three-month suspension (triple the sanction proposed by a hearing panel) was imposed by the New York Appellate Division for the First Judicial Department.

Respondent was charged with having made patently offensive racial, ethnic, homophobic, sexist, and other derogatory remarks to attorneys, in violation of rule 8.4(h) of the Rules of Professional Conduct (Rules); insulting an administrative law judge in a public forum, and being disruptive inside of and/or in the vicinity of hearing rooms, in violation of rule 3.3(f)(2); and improperly importuning court clerks to recalendar cases even when told it could not be done, in violation of rule 8.4(b) and (d). The evidence cited by the Referee and confirmed by the Hearing Panel as upholding these charges included testimony of three TVB Administrative Law Judges: one who received complaints of disruptive or explosive conduct on respondent's part over the years and personally witnessed such behavior on several occasions; one who was called "a disgrace" by respondent in an open hearing room during or after a contentious hearing; and one who, after reprimanding respondent for talking in the courtroom, experienced him as irate, rude, loud, and combative. In addition, three attorneys who practiced traffic law at the Manhattan North TVB testified that respondent had for years cursed and made obscene, racist comments, and uttered profanities about ethnicity and homosexuality within the public areas of the TVB; he had also threatened one of the attorneys on more than one occasion...

The Hearing Panel disaffirmed the Referee's recommendation of a "public sanction," which it understood to be a recommendation of a public censure. It noted the regularity over the years of respondent's public remarks to other attorneys that were profane, racist, sexist, homophobic, obscene or threatening, his disrespect to and for the two Administrative Law Judges, and that he was also found to have improperly importuned TVB clerks to engage in acts that he was told could not be done. The Hearing Panel recommended a one-month suspension. The DDC seeks an order confirming the Hearing Panel's findings of fact and conclusions of law, and argues for a just and appropriate sanction.

The court on sanction

Even assuming, as the Referee found, that it is true that inappropriate language by attorneys is commonplace at the TVB, we fail to see how this constitutes mitigation or otherwise excuses respondent's ongoing and public inappropriate behavior. Respondent has shown inexcusable disrespect in open court to two Administrative Law Judges. He has spewed racist, sexist, homophobic and offensive epithets against other attorneys that any reasonable person, let alone a reasonable attorney, would know are simply unacceptable in public discourse. The "policy underlying the rules governing professional responsibility [ ] seeks to establish a  minimum level of conduct below which no lawyer can fall without being subject to disciplinary action'" (In re Holtzman, 78 NY2d 184, 192 [1991] [quoting from Code of Professional Responsibility, Preliminary Statement], cert denied, 502 US 1009 [1991]). Respondent's conduct should not and will not be tolerated. Furthermore, we find it of concern that he attempted to undermine the functioning of the TVB by his repeated requests of the clerks to recalendar cases, even after being informed by more than one clerk that what he was asking would violate TVB policy.

Accordingly, the Committee's motion is granted to the extent of confirming the Hearing Panel's findings of facts and conclusions of law. We disaffirm the Hearing Panel's recommendation of a one-month suspension, and direct that respondent should be suspended for a period of three months, and until further order of this Court, and respondent should continue anger management treatment for a period of one year, monitored by the New York City Bar Association's Lawyer Assistance Program .

July 29, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Interner Search Catches Practice While Suspended

The benefit of online transparency is apparent from a disbarment order of the New York Appellate Division for the First Judicial Department.

The attorney represented buyers and sellers in real estate transactions. He was suspended for failure to cooperate in a bar investigation.

He ignored the suspension but

On March 17, 2015, the sellers' counsel's firm learned of respondent's suspension by online research precipitated by respondent's failure to deliver bank checks for the balance of the purchase price in accordance with the contract of sale. Upon learning of respondent's suspension, the sellers' counsel's firm consulted with outside ethics counsel and sent respondent a letter in which, among other things, it advised him to cease all representation of the purchasers. The sellers' counsel stated in an affidavit that the buyers have retained new counsel and the parties are presently working toward completing the transaction.

In yet another real estate sale, respondent represented the sellers of a Manhattan apartment; according to an affidavit from the buyers' counsel, respondent represented the sellers at the March 18, 2015 closing, which took place at respondent's office. Respondent accepted a check from the buyer's counsel for $97,231.02 and deposited it into his attorney trust account. The buyers' counsel stated that to the best of his recollection, he became aware of respondent's suspension on March 27, 2015 when the title company for the transaction informed him that escrow checks issued by respondent had not cleared because respondent's escrow account had been frozen; after further investigation, the title company learned that respondent had been suspended.

In addition to the previously discussed real estate transactions, the Committee alleges that, as of April 29, 2015, respondent continued to hold himself out as a licensed New York attorney on an internet web page.

(Mike Frisch)

July 29, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, July 28, 2015

Battle Joined In North Carolina Litigation

An answer denying any ethical misconduct has been filed in the second of two cases brought against a North Carolina attorney in connection with her successful efforts to free an innocent man on death row.

The complaint alleges that the attorney sent a false or misleading email to a colleague inquiring about an uncertified transcript provided to a member of the media.

The email at issue was sent on January 26 at 5:01  pm.

Notably, the answer appends the apparently complete email chain at issue. A February 26 email from the accused attorney explains the situation from her point of view.

Our coverage of the other case - the so-called "water bottle" bar charges- is linked here and here. 

The two cases are scheduled for hearing on January 11 -15, 2016. The Panel chair is a former judge who practices in the area of divorce and family law. (Mike Frisch)

July 28, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Failure To Heed Censure For Current Client Conflict Leads To Suspension

A disciplinary case is reported on the web page of the Tennessee courts

The Tennessee Supreme Court has unanimously affirmed a 180-day suspension of Memphis attorney Homer L. Cody’s law license.

In 2011, the Board of Professional Responsibility filed a petition for discipline against Mr. Cody based on a complaint of misconduct.  The petition alleged, among other things, that Mr. Cody failed to cease representation of two parties with conflicting interests.  A hearing panel found that Mr. Cody did, in fact, have a conflict of interest and that his continued representation of both parties was a violation of the Rules of Professional Conduct.  Initially the panel recommended that Mr. Cody be publicly censured for his violation; however, even after the panel’s recommendation, Mr. Cody continued to represent both clients.  As a result of his continued representation, in August 2012, the Board of Professional Responsibility filed a second petition against Mr. Cody, and a hearing panel recommended that he be suspended from the practice of law for a period of 180 days.

Mr. Cody appealed to the Shelby County Circuit Court, which affirmed the hearing panel’s findings and conclusions of law.  Mr. Cody then appealed to the Supreme Court, alleging a number of procedural, jurisdictional, and constitutional errors and claiming that the hearing panel acted arbitrarily in finding that he violated the Rules of Professional Conduct and in imposing a 180-day suspension.

The Supreme Court upheld the decisions of the hearing panel and the Shelby County Circuit Court.  In an opinion authored by Chief Justice Sharon G. Lee, the Court addressed Mr. Cody’s claims, finding each to be without merit.  The Court further found that the hearing panel did not act arbitrarily in finding that Mr. Cody failed to adhere to the duty required of attorneys under the Rules of Professional Conduct.  Based on Mr. Cody’s multiple rule violations, prior disciplinary record, repeated inability to follow court orders, refusal to acknowledge his misconduct, and more than 30 years of experience as a licensed attorney, the Court found that a 180-day suspension from the practice of law was appropriate.

Read the opinion in Homer L. Cody v. Board of Professional Responsibility, authored by Chief Justice Lee.

The two clients were the Pee Wee Wisdom Child Development Center, Inc. (“the Center”) and Vivian Braxton, the Center’s executive director.

The conflict

On November 15, 2004, Mr. Cody began representing two clients with conflicting interests. When Mr. Cody entered his appearance in the Chancery Court action, Ms. Braxton had already pled guilty to theft of property from the Center. Thereafter, the Center’s Receiver was awarded a judgment against Ms. Braxton in an amount in excess of $296,000.

As to the post-censure charges

Mr. Cody filed a Racketeer Influenced and Corrupt Organizations Act (“RICO”) complaint in the federal district court on behalf of the Center and Ms. Braxton. In the RICO complaint, Mr. Cody sued the attorneys and judges who participated in the Chancery Court proceedings involving the Center and Ms. Braxton, characterizing these individuals as “judicial mobsters” who were “operating within the Tennessee judicial system and using the system to steal, embezzle, defraud, and to carry out other illegal activities.”

The court

On March 16, 2012, Mr. Cody was publicly censured for his representation of the Center and Ms. Braxton. At this point, Mr. Cody should have understood that he was ethically prohibited from representing Ms. Braxton and the Center because of their adverse interests. The public censure should have been the end of it. But it was not. Mr. Cody had not learned his lesson. Instead, he forged ahead by filing a motion in the Chancery Court for the two parties, ignoring the orders of the Chancery Court and the Court of Appeals, and the public censure. This precipitated a second petition for discipline. Undaunted, Mr. Cody persevered. He filed a federal court action for the Center and Ms. Braxton against the lawyers and judges involved in the original Chancery Court action, labeling them “judicial mobsters.” Not surprisingly, the Board filed a supplemental petition for discipline against Mr. Cody, which resulted in the Hearing Panel’s decision that Mr. Cody should be suspended for 180 days.

As to the attack on the system

After carefully reviewing the issues raised by Mr. Cody, the entire record, briefs filed by the parties, and all applicable authority, we find that none of Mr. Cody’s arguments have merit. Based on our standard of review, we hold that there was no violation of either constitutional or statutory provisions; the Hearing Panel did not act in excess of its jurisdiction; there was no unlawful procedure; the result reached was not arbitrary, capricious, or characterized by an abuse of discretion; and Mr. Cody’s suspension was fully supported by evidence which is both substantial and material in light of the entire record.

(Mike Frisch)

July 28, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Monday, July 27, 2015

Pardon My French But Prosecutor Misconduct Against Pro Se Death Penalty Defendant Merits Suspension

The Delaware Supreme Court agreed with its Board on Professional Responsibility that an attorney's conduct as the prosecutor in a murder case violated seven ethics rules.

It disagreed on sanction and suspended the attorney for six months and a day. Neither the attorney or Disciplinary Counsel had objected to a proposed public reprimand.

The extra day is significant

This sanction will require [attorney] Favata to establish his rehabilitation before he can be re-admitted to practice law as a member of the Bar of this Court

The attorney was a Deputy Attorney General who had handled the guilt and penalty phase of the death penalty case.

The conviction and death penalty was reversed on appeal

McCoy appealed his convictions and sentence to this Court. In Isaiah W. McCoy v. State of Delaware,  we held that reversible error occurred when Favata engaged in prosecutorial misconduct by improperly vouching for the credibility of a State’s witness, Rekeisha Williams (“Williams”)...

In addition to vouching, this Court held that Favata engaged in a pattern of unprofessional conduct throughout the trial, which included improper commentary, attempts to prevent Standby Counsel from providing assistance to McCoy, and disparaging remarks about McCoy with numerous demeaning comments focused on McCoy’s self-representation.

The trial court had admonished him

Listen, I’m reaching a level which I am very upset [about] [t]he way the prosecution is handling this case. I don’t appreciate smart-ass remarks, pardon my French but that’s what it is, [Favata]. You’re being disrespectful to the Court as well as to Mr. McCoy and witnesses. Your antics in this trial have been totally disrespectful, in my view, of what properly should happen in a court procedure, particularly a serious matter like this. I don’t appreciate off-the-cuff remarks. I don’t appreciate your making frivolous statements in my view or matters which should be taken seriously. I don’t like the cynicism that’s being generated. I don’t like the facial expressions that you make sometimes. I can expect some of that from Mr. McCoy because he’s a criminal defendant. He’s acting as his own counsel. He’s inexperienced. You, sir, are an experienced trial lawyer and I expect some better conduct out of you and Ms. Weaver [co-counsel] to some extent. Ms. Weaver is less culpable than you are in my opinion. Let’s get that out on the table, OK?

The high court expressed concern about this incident

During a recess on July 5, 2012, Favata made several statements regarding “Omerta,” a code of silence associated with the Italian mafia, and its similarities to the Bloods’ code of silence requiring its members to refuse to provide information to the police, as well as what might happen to someone who violated these codes. Favata’s comments were heard by McCoy and the Prothonotary, Carol Lemieux. As Favata ultimately admitted, his comments were meant to be heard by McCoy and began as soon as McCoy was brought into the courtroom by the prison guard. Favata’s comments included that the prosecution would put Detective Pires back on the stand to tell everyone that McCoy was a “snitch,” that there would be a  reporter there from the News Journal, and that McCoy could have trouble back at the prison after other inmates learned that McCoy had “snitched.” McCoy alerted the trial judge to Favata’s comments when the trial judge resumed the bench. According to McCoy, Favata mentioned McCoy’s “ratting on [his] associates and friends and how they would possibly be coming after [him] and . . . [Favata] planned to bring this out.” McCoy stated that Favata told him that if he broke his gang oath, “that the inmates are going to get [him],” and that McCoy was “hiding” at the correctional facility. The trial judge inquired about the truth of what McCoy alleged.

He responded with a false denial.

The attorney's conduct merited a suspension

In Favata’s case, the context and nature of the Omerta statements constitute a significant aggravating circumstance. Favata initially falsely denied making the Omerta statements to McCoy. When the Prothonotary corroborated McCoy’s account, Favata admitted only part of the substance and then falsely accused McCoy of eavesdropping. The complete substance of the Omerta statements was intended to intimidate McCoy, who was acting pro se, and put him in fear of bodily harm in prison. Favata now admits that he intended for McCoy to hear the intimidating Omerta statements about prison reprisals. Such improper conduct stands out as the nadir in Favata’s continuum of egregious professional misconduct in McCoy’s case...

The objectives of the Lawyer Disciplinary system are to protect the public, to protect the administration of justice, to preserve confidence in the legal profession, and to deter other lawyers from similar misconduct. We conclude that any sanction other than suspension would not provide the necessary protection for the public, serve as a deterrent to the legal profession, or preserve the public’s trust and confidence in the integrity of the disciplinary process for Delaware lawyers.

The Open File noted the reversal of the criminal conviction and presciently opined

Maybe next time, when confronted with behavior that they clearly deplore, the Delaware Supreme Court will treat prosecutors’ attacks on defendant’s constitutional rights to something more lasting than an admonishment.  Maybe they’ll make law that citizens can rely on.

This time was next time. (Mike Frisch)

July 27, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Consent Agreement Moves Forward In D.C.

There is a very significant hearing committee recommendation for the District of Columbia Court of Appeals to accept consent discipline of a stayed four-month suspension and unsupervised probation of eighteen months for serious neglect.

Respondent’s violations are serious. He intentionally neglected the cases of multiple clients over a four-year period. As a result of his misconduct, all of the clients lost their claims— two by summary judgment that Respondent did not oppose, one by dismissal as a sanction for Respondent’s failure to respond to discovery orders, and two after Respondent let the applicable statute of limitations expire. Further, two of Respondent’s clients were sanctioned because of his misconduct.

Notably (and do not blame the Assistant Bar Counsel who negotiated the consent) the Bar Counsel investigation began way back in 2006.

This worked to the benefit of the accused attorney by allowing him to demonstrate rehabilitation from his alcoholism and a sustained track record of incident-free behavior.

He had left practice in 2006 but began a West Virginia practice with a law firm in 2008.

There have been no post-2008 bar complaints,

The crucial finding

At the same time, Respondent has no disciplinary record, cooperated fully with Bar Counsel, expressed remorse, accepted responsibility for his actions, and has practiced law for nine years without any new disciplinary complaints. We thus find that the sanction of a four-month suspension is justified and not unduly lenient. We also agree that mitigation of the sanction pursuant to Kersey based on Respondent’s alcohol dependence is justified, and that the suspension should be stayed in favor of an 18-month period of unsupervised probation, with the conditions to which the parties stipulated.

Under Kersey, a period of suspension may be stayed in favor of probation if the respondent can prove (1) by clear and convincing evidence, that he suffered from a disability or addiction at the time of the misconduct; (2) by a preponderance of the evidence, that his disability or addiction substantially caused the misconduct; and (3) by clear and convincing evidence, that he now is substantially rehabilitated.

The parties have stipulated that Respondent has satisfied the burden of proof with respect to all three Kersey elements.

This is quite significant because the Board on Professional Responsibility has been (to put it mildly) hostile to accepting stipulations in matters of potential dispute in consent matters.

This case was an entirely appropriate use of discretion and resources, particularly in light of the fact that the misconduct took place nine years ago and was promptly reported to Bar Counsel.

You cannot have a workable system of consent discipline if you don't trust Bar Counsel (by whatever name) to exercise discretion and judgment.

Hope the Court of Appeals agrees with me.

The case is In re Athanasios Baskedis. It can be found at this link. (Mike Frisch)

July 27, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Misconduct In Attorney's Own Divorce Warrants Disbarment

Disbarment was imposed by the Maryland Court of Appeals for an attorney's  series of falsehoods in her own divorce

There is a saying, sometimes attributed to Abraham Lincoln, that a lawyer who represents himself has a fool for a client. A corollary, perhaps, is that such a client has a lawyer who may be blinded by self-interest to the standards of professional conduct. This case concerns an attorney who represented herself for a time in her own divorce litigation, and who made some unfortunate choices that included misrepresentations to the court, a mortgage lender, and others, and the deceptive alteration of draft settlement documents for her own advantage. As a result, she loses her license to practice law in Maryland.

Her husband was incarcerated from 2002 to 2005. The attorney held his power of attorney.

The Commission alleged that Ms. Trye had fraudulently re-titled the property to encumber it with loans for her own benefit. Based on the testimony of both Mr. and Ms. Trye, the hearing judge concluded that they were both trying to re-finance the Idylwood Road property at a time when Mr. Trye was in prison and that the POAs and title transfers were related to that effort. The hearing judge concluded that there was no evidence of fraud on Ms. Trye’s part in the creation of the POAs and the deeds – in particular, that there was not clear and convincing evidence that the transfer of title to the Idylwood Road property to Ms. Trye alone was fraudulent.

The court found a number of other falsehoods and dishonest conduct.

In the divorce

The hearing judge found that Ms. Trye knowingly made false statements to the circuit court during the June 6, 2013 hearing. Specifically, Ms. Trye misrepresented to the court that she had not receive subpoenaed documents from E-Mortgage Corporation and that she did not subpoena documents from Bank of America. In addition, Ms. Trye purposefully failed to comply with discovery requests and discovery orders and purposefully failed to comply with the court’s order to attend the deposition on July 19, 2013. 

The court declined to find that she had violated Rule 4.2 in the divorce based on the broader consequences of such a finding

From the time she filed her divorce case in June 2012 through August 2013, Ms. Trye represented herself in that case. Throughout 2013, Mr. Hamburg represented Mr. Trye in the divorce litigation. Although she was aware that Mr. Trye had retained counsel, Ms. Trye sent several text messages and spoke with Mr. Trye on numerous occasions regarding the divorce case. The hearing judge found that she did so, even after Mr. Hamburg requested that she terminate direct communication with his client about the litigation. The hearing judge specifically referred to the meeting that Ms. Trye initiated with Mr. Trye on October 3, 2013 when she gave him the envelope with altered settlement drafts. Ms. Trye does not appear to deny that she communicated with Mr. Trye without the presence of his counsel. Rather, she argues that the communications that took place were authorized by Mr. Hamburg – or at least did not come within the category of subjects that Mr. Hamburg had forbidden her to discuss with his client.

The court found the instance cited by the hearing judge did not violate the Rule

We decline...to find a violation of MLRPC 4.2 on a somewhat different ground [than consent of the attorney]. The only specific incident cited by the hearing judge to illustrate how Ms. Trye had violated Mr. Hamburg’s instruction not to communicate directly with his client about the divorce litigation was her meeting with Mr. Trye on the evening of October 3, 2013. At that meeting, she talked with Mr. Trye about the divorce and gave him the signed documents to take to court the next day. But, by that time, Ms. Trye had retained Mr. Butler for the case and presumably was no longer representing herself – i.e., she was no longer acting in a representational capacity that is the premise of MLRPC 4.2. Thus, finding a violation of MLRPC 4.2 based on the October 3 meeting alone would suggest that an individual who is a member of the bar, even when not acting in a representational capacity in a case, is restricted from directly communicating with other parties who are represented by a lawyer.

Such a holding could have significant consequences beyond this case. Direct communication between parties, without the intermediation of their lawyers, is often a bad idea, regardless of whether any of the parties is a lawyer. On the other hand, direct communication between the principals – leaving the lawyers out of the room – is sometimes the path to settlement of a dispute. Under the principle implicitly embraced by the hearing judge, the latter option would never be available if one or more of the parties happened to be a member of the bar, even if not acting in that capacity in the dispute. We hesitate to say that Rule 4.2 always forbids such communication.

...the issue has not been briefed in this case and the record is not clear on whether, and to what extent, Ms. Trye continued to act as an attorney in her divorce case after Mr. Butler entered the case. We do not further resolve the application of MLRPC 4.2 here, but decline to find a violation of that rule on this record. At the end of the day, our disposition of this charge does not affect the disposition of this case.

It matters not because

Ms. Trye’s false statements in the circuit court, which were part of a pattern of dishonesty and intentional misrepresentation, warrant disbarment. Ms. Trye made multiple intentional misrepresentations, including misrepresenting the Idylwood Road property as her primary residence on a loan modification application, misrepresenting her compliance with discovery during a court hearing, and misrepresenting the basis for her knowledge of a client’s military status. Most egregiously, Ms. Trye deceitfully attempted to alter the agreed custody terms of a settlement agreement and consent order and conceal the alteration from the opposing party for her own advantage.

Disbarment is ordinarily the appropriate sanction for intentional dishonest conduct.

(Mike Frisch)

July 27, 2015 in Bar Discipline & Process | Permalink | Comments (0)

What It Was Was A Football

The Texas Lawyer reports on an attorney discipline case

The Texas Board of Disciplinary Appeals on July 24 heard arguments about disbarring an attorney who defrauded an insurer by making false claims that a 1977 Superbowl football signed by the Dallas Cowboys and other sports memorabilia were lost or destroyed.

The Commission for Lawyer Discipline said that Rockwall attorney Robert Glen Vernon Jr. was indicted on Nov. 13, 2013, for insurance fraud between $20,000 and $100,000. He pleaded guilty to the charge, a third-degree felony, in a plea agreement on April 6, 2015, and received seven years of community supervision, a $2,000 fine and $239 in court costs, according to the petition for compulsory discipline in In The Matter of Robert Glen Vernon Jr.

The commission said that Vernon's offense was an intentional and serious crime under the Texas Rules of Disciplinary Procedure, and that he should be disbarred.

The indictment in Vernon's underlying case, which was attached to the petition, said that between Oct. 25, 2010, and June 27, 2012, Vernon intended to defraud or deceive an insurance company when he made a claim under a policy. He presented a false and misleading statement that certain property was lost or destroyed. Among other things, the property included sports memorabilia like the signed football, and helmets and jerseys that were signed by Tony Romo and other athletes.

The plea agreement in Vernon's criminal case, also attached to the disciplinary petition, said he would have to return all of the property in the indictment to the insurance company.

Texas Lawyer could not contact Vernon because two phone numbers for him were disconnected. Vernon never entered an answer in the compulsory discipline case.

Dallas solo Joe Padian, who represented Vernon in the underlying criminal case, didn't immediately return a call seeking comment. Neither did Claire Mock, a spokeswoman with the State Bar of Texas Office of Chief Disciplinary Counsel, which represents the Commission for Lawyer Discipline.

Apologies to the late great Andy Griffith. (Mike Frisch)

July 27, 2015 in Bar Discipline & Process | Permalink | Comments (0)

A Non-Frivolous Issue

An attorney on appeal filed an Anders brief in a case that had a meritorious sentencing issue, according to an opinion of the United States Court of Appeals for the Fifth Circuit.

The court recalled its mandate and reinstated the appeal.

Simply stated, the district court committed plain error by sentencing Emeary to fifteen years of incarceration when the statutory maximum was ten, and this court committed plain error when we deemed Emeary’s appeal frivolous and dismissed it without any notice of the issue. The Supreme Court has recognized that, while the Anders process is intended “to ensure that rights are not forgone and that substantial legal and factual arguments are not inadvertently passed over,” Penson v. Ohio, 488 U.S. 75, 85 (1988), the process is imperfect and cannot “eliminate all risk of error,” Smith, 528 U.S. at 277 n.8. That acknowledgment demands a concomitant willingness of courts to correct plain errors that escaped notice, at least in some circumstances. In my view, those circumstances are present here. A criminal defendant should not be unlawfully condemned to five excessive years in prison—a “drastic loss of liberty,” Penson, 488 U.S. at 85—based on the sort of clear and obvious error we made in this case.

The order came from a Circuit Judge Dennis in chambers.

Practice pointer here: Anders is a last and disfavored resort. (Mike Frisch)

July 27, 2015 | Permalink | Comments (0)

On Airline Highway Near Swamp Road

The Louisiana Supreme Court accepted a joint petition for interim suspension of an attorney.

This news report from the Times-Picayune in October 2014 may be related

A Prairieville man was arrested Friday after he rammed into his estranged wife's vehicle at a red light with his own after seeing her riding with another passenger, according to Ascension Parish authorities.

Gerald Asay, 33, who was booked on two counts of attempted first-degree murder and a number of other charges, had his infant child riding in the car with him at the time of the incident, Ascension Parish Sheriff's Office Maj. Ward Webb said.

A third vehicle was also hit. In all, five people, including Asay, were transported to a local hospital for minor-to-moderate injuries. A sixth person was treated at the scene for injuries. 

The wreck occurred around 2:30 p.m. Friday (Oct. 24) on U.S. 61, also called Airline Highway, where it intersects with Louisiana 929 in Prairieville.

Webb said Asay's estranged wife called 911 before the crash and told the dispatcher he was trying to run her off the road. He first rammed her vehicle on Airline Highway near Swamp Road. She was able to continue driving south, but once she stopped at a red light at LA-929, he drove into the back of her vehicle "causing severe damage to both vehicles and pushing the crash into a third vehicle."

The third vehicle was also stopped at the right light.

Webb said Asay began to pursue his wife when while traveling south on the highway, he spotted her in her vehicle with another passenger. Webb described the incident as fueled by "road rage."

Asay was booked upon his release from the hospital on charges of two counts of attempted second-degree murder, three counts of negligent injuring, aggravated criminal damage to property and reckless operation of a motor vehicle.

(Mike Frisch)

July 27, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Friday, July 24, 2015

Grievance - Closing Discretion Upheld

The Alaska Supreme Court has held that a complainant unhappy with Bar Counsel's decision not to further investigate his complaint failed to establish a basis for review.

The court explained its review of the intake process

We now consider a complainant’s application for relief contending that Bar Counsel erred in closing the complainant’s grievance without a formal investigation. Resolving this matter requires explaining more fully how we review a grievance closure. First, we expect Bar Counsel will base a grievance closure on the facts of record, applicable law and policy, practicality, and professional experience and judgment; when Bar Counsel does so we will afford Bar Counsel broad discretion. Second, when reviewing a grievance-closing decision for abuse of discretion, we look to ensure that the decision is not arbitrary, capricious, or the result of a breakdown in the process. On that standard we see no abuse of discretion in Bar Counsel’s decision to close this complainant’s grievance without a formal investigation.

What Bar Counsel had done

The grievance-closing letter reflects that, in addition to [complainant] McGee’s submittals and arguments, Bar Counsel considered: (1) the ALJ decision and underlying record regarding the allegations of impropriety in OPA’s contracting process; (2) the Department of Administration’s report about OPA’s contracting process and McGee’s allegations of wrongdoing by OPA’s contract investigator and attorneys; and (3) the Department of Law’s response to McGee’s assertion that the Department of Administration’s investigative report was a “whitewash.” We conclude that Bar Counsel reasonably could determine that a formal investigation would not bring to light any new material facts relevant to McGee’s grievance.

The letter also reflects the application of experience and professional judgment based on the existing record and relevant considerations: Bar Counsel provided a reasonable explanation that the known facts did not suggest a connection between OPA’s use of the investigator and any possible ethical violation by the attorney involved in this matter, that a violation would have to be proved to an area hearing committee by clear and convincing evidence, and that there was no good reason to use Bar resources to present a case to volunteer area hearing committee members when there was very little likelihood of proving an ethical violation. The Discipline Liaison reviewed McGee’s grievance file and the grievance-closing decision, as requested by McGee, and concurred that a formal investigation was unwarranted. McGee has not suggested that either Bar Counsel or the Discipline Liaison was improperly motivated or influenced in the decision-making process, and it is clear that there was no breakdown in the grievance process.

In other words, Bar Counsel can exercise reasonable discretion at intake subject to court review, 

Works for me. (Mike Frisch)

July 24, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Suspension, Not Disbarment, Proposed For Horrific Abuse Of Female Staff

The Illinois Review Board has filed its recommendation in a  matter in which the attorney had abused his female staff and exposed himself to a neighbor and another passerby.

The Review Board, over a single dissent, proposes a 30 month suspension with reinstatement by court order.

While the Hearing Board did a painstaking and we believe correct analysis of case law to support its 30 month suspension, it appears to have paid little attention to the overriding issue of whether this particular Respondent is likely to reoffend. We believe that, in this case, "what is past is prologue". Unless Respondent comes to grips with his problems and takes affirmative steps to understand and resolve them he is a very bad risk. We are also mindful that Respondent had done good work in his field of class action law and that the bulk of his misconduct occurred quite some time ago. For these reasons we think disbarment is not appropriate.

The conduct is set forth in graphic if summary detail in the report. Most of it took place in the 1999- 2003 period.

Why did it take until 2015 to get this far?

Some insight from the Hearing Board

Over the course of four and one-half years, the parties submitted and vigorously briefed numerous motions regarding the charges of the Complaint and procedures employed in bringing this matter to hearing. 

Our coverage of the Hearing Board report is linked here.

The Review Board synopsis

The Administrator filed a seven count complaint against Respondent. Counts I, II, III, IV and VII alleged that Respondent engaged in misconduct with respect to five female employees of Respondent's law firm and charged Respondent with engaging in criminal acts that reflect adversely on his fitness as a lawyer, namely assault and battery with respect to all five women, unlawful restraint with respect to three women, and telephone harassment with respect to three women. In Counts V and VI, Respondent was charged with engaging in the criminal acts of public indecency and disorderly conduct by exposing himself to a co-resident of his apartment building and to a woman walking on a public street.

The Hearing Board determined that the legal defenses asserted by Respondent were not a bar to any of the charges against Respondent. After assessing the credibility of the witnesses and reviewing the evidence, the Hearing Board found that Respondent engaged in misconduct with respect to four of his employees, his neighbor and the woman walking on a public street. The Hearing Board recommended that Respondent be suspended for thirty months.

Upon review, the Administrator asked that Respondent be disbarred. The Respondent argued the charges against him should be dismissed because the findings were against the manifest weight of the evidence; the requirements of 1990 Rule 8.4(a)(9)(B) were improperly circumvented; there could be no violations of 8.4(a)(3) because Respondent was not convicted; and that the use of information that was subject to expungement deprived him of due process.

The Review Board found Respondent's arguments to be without merit. The Review Board concluded that the findings of the Hearing Board were not against the manifest weight of the evidence. The Review Board affirmed the findings of misconduct of the Hearing Board. In determining a sanction recommendation, the Review Board considered that Respondent had been previously disciplined for engaging in inappropriate sexual misconduct. After considering the precedent, the factors in mitigation and aggravation, and the likelihood that Respondent would reoffend, a majority of the Review Board recommended that Respondent be suspended for thirty months and until further order of the Court. One Review Board member dissented with respect to the sanction recommendation and recommended that Respondent be disbarred.

The Review Board rejected the contention that a  criminal conviction is required to sanction the attorney's violation of present Rule 8.4(c). At the time of the misconduct, the provision was found at Illinois Rule of Professional Conduct 8.4(a)(3).

On sanction

The Hearing Board concluded the Respondent's conduct "resulted from his selfish motive of sexual gratification, there was a pattern of misconduct over time," and he "took advantage of vulnerable employees who were young, self-supporting and dependent upon him for their livelihood". Precedent, common sense, and regard for the public and the legal profession support a suspension of thirty months and until further order of the Court.

The Hearing Board correctly considered his prior discipline in aggravation. Factors in aggravation revealed that, in 1993, while 26 years old, Respondent attended a high school girls' volleyball game where he first saw a 17 year old girl he did not previously know. In November and December of 1993, Respondent made at least six obscene telephone calls to the girl, resulting in his arrest in February 1994 and conviction in March 1994 for telephone harassment. In addition, between November 1993 and April 1994, Respondent made six to eight obscene phone calls to another woman, a fellow associate working with him at a Chicago law firm. From December of 1994 to January 1995, while on supervision for the telephone harassment conviction, Respondent made at least four obscene phone calls to a woman who had been a paralegal at the firm where he worked. During March 1993, again in the Fall of 1993, and in September 1994, Respondent made a number of obscene phone calls to yet another woman.

Richard Green in lonely dissent

While I agree with my colleagues with respect to their agreement that the findings of the Hearing Board are not against the manifest weight and their analysis of the applicable law, I must disagree as to the recommended sanction. Respondent engaged in similar conduct in the 1990's, was disciplined and was to get treatment. Rather, he continued his bad behavior and in fact escalated it. Nothing in the record shows that he will not continue with the misconduct. Clearly this behavior leads the profession into disrepute. I would recommend that Respondent be disbarred.

Law360 had this story on more recent issues that he had faced in his class action lawyering and law firm breakup. 

The ABA Journal reported on the Seventh Circuit opinion by Judge Posner in a class action for which the attorney was counsel.

The impropriety of allowing Saltzman to serve as class representative as long as his son-in-law was lead class counsel was palpable...Weiss may have been desperate to obtain a large attorney’s fee in this case before his financial roof fell in on him [due to impending bar discipline]...

The settlement should have been disapproved on multiple grounds. To begin with, it was improper for the lead class counsel to be the son-in-law of the lead class representative. Class representatives are, as we noted earlier, fiduciaries of the class members, and fiduciaries are not allowed to have conflicts of interest without the informed consent of their beneficiaries, which was not sought in this case. Only a tiny number of class members would have known about the family relationship between the lead class representative and the lead class counsel—a relationship that created a grave conflict of interest; for the larger the fee award to class counsel, the better off Saltzman’s daughter and sonin-law would be financially—and (which sharpened the conflict of interest) by a lot. They may well have had an acute need for an infusion of money, in light not only of Weiss’s ethical embroilment, which cannot help his practice, but also of the litigation against him by his former law partners and his need for money to finance his new firm. The appellees (primarily Saltzman, who is still a named plaintiff, and Pella) point out that Saltzman was one of five class representatives, and the other four didn’t have a conflict of interest. But the four other original class representatives had opposed the settlement, whereupon they had been replaced by new named plaintiffs—selected by the conflicted lead class counsel.

As I said when the Hearing Board released its report

I suspect this will end in a disbarment.

The Illinois Supreme Court will have the final say. (Mike Frisch)

July 24, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Ambiguous Lips Reference No Conflict Of Interest But Attorney Nonetheless Disbarred

Misconduct in six client matters has resulted in the disbarment of an attorney admitted in 2007 by the Maryland Court of Appeals.

On May 30, 2007, this Court admitted Haley to the Bar of Maryland. Haley worked for various federal agencies. In 2010, Haley became a solo practitioner in Columbia, Maryland. Haley’s primary areas of practice included family law, criminal law, and labor law.

Before he performed any legal services, Haley received a flat fee from each of the six clients who ended up filing complaints against him with the Commission. In each case, without his client’s consent, Haley deposited the unearned fee into an operating account instead of an attorney trust account.

Haley’s professional relationship with each of the six clients followed a similar pattern. At the beginning of the representation, Haley communicated appropriately with the client. As the representation progressed, Haley became less responsive to the client’s inquiries. Haley’s final communications with the client usually involved an argument, during which Haley would exhibit hostility and blame the client for the breakdown of the attorney-client relationship.

One of the matters involved

In or about 2011, Haley met Kim Glaudé (“Glaudé”) through a dating website. Haley and Glaudé chatted online and met for dinner on one occasion; Haley and Glaudé planned, but ended up cancelling, a second date.

On February 8, 2012, Glaudé retained Haley to represent her in a matter concerning an Equal Employment Opportunity Commission (“EEOC”) complaint against her former employer. At that point, Glaudé and Haley had not communicated for approximately one year. Glaudé paid Haley a $4,500 flat fee. Without Glaudé’s consent, Haley deposited the fee into an operating account instead of an attorney trust account.

In March 2012, Haley and Glaudé met at Haley’s law office to discuss Glaudé’s case. Haley took Glaudé to a back room and kissed her. Glaudé immediately objected.

On March 23, 2012, Haley failed to appear at a conference with an EEOC investigator; Haley also failed to reschedule the conference.

On August 17, 2012, Glaudé telephoned Haley and left a voicemail to ask about her case’s status. Haley texted Glaudé to state: “I am sorry, I owe you some lips for that. [Yo]u decide where.”

In a letter dated October 18, 2012, Haley terminated the representation. Haley did not refund Glaudé any of the fee.

A footnote

At the hearing, neither Glaudé nor Haley elaborated on the meaning of Haley’s text message.

On these facts, the court rejected conflict of interest allegations

Here, we are not persuaded that clear and convincing evidence supports the hearing judge’s conclusion that Haley violated MLRPC 1.7(a) in representing Glaudé. Haley and Glaudé met through a dating website. Haley and Glaudé chatted online and went on one date; they planned, but ended up cancelling, a second date. Approximately one year later, Glaudé retained Haley. During a meeting, Haley kissed Glaudé; Glaudé objected. Later, Glaudé telephoned Haley and left a voicemail to ask about her case’s status. Haley texted Glaudé to state: “I am sorry, I owe you some lips for that. [Yo]u decide where.”

The record does not demonstrate by clear and convincing evidence that “there [wa]s a significant risk that the representation of [Glaudé] w[ould have] be[en] materially limited . . . by a personal interest of” Haley. MLRPC 1.7(a) (emphasis added). Although a lawyer’s personal relationship with a client may complicate an attorney-client relationship, we can identify no case in which this Court concluded that a lawyer’s merely social (as opposed to sexual) relationship with a client rose to the level of creating a significant risk that the representation would be materially limited by a personal interest of the lawyer.

The court concluded that the numerous violations in multiple matters warranted disbarment.

Video of the oral argument is linked here. (Mike Frisch

July 24, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Suspension For Theft From Colon & Rectal Center

The Ohio Supreme Court has suspended a Grove City attorney as a result of a theft conviction.

WBNS - 10TV reported in 2013 on the charges

A woman is charged with grand theft for allegedly stealing from her employer.

Court documents stated that Angela M. Whitt is accused of stealing more than $10,000 from the Central Ohio Colon & Rectal Center between March 2011 and November 2012.

According to court records, Whitt used the Upper Arlington company's credit card to pay an orthopedic office, insurance and an electric bill, among other things.

Whitt served as the officer manager for the business.

(Mike Frisch)

July 24, 2015 in Bar Discipline & Process | Permalink | Comments (0)

No Witch Hunt Against Former Bar Employee

This disbarment of an attorney by a justice of the Massachusetts Supreme Judicial Court notes the nature of the allegations

bar counsel filed a petition for discipline against the respondent, asserting that, while acting as trustee and attorney-in-fact for his father, he had mishandled his father's funds, intentionally depriving his father and his father's estate of those funds for his own use.

There was an unusual claim of bias

After the board's recommendation was filed in the county court, the respondent filed a motion to show cause, 'alleging that the disciplinary proceeding itself was an "improper persecution" and a "witch hunt" based on "spurious and specious" lies and perjured testimony arising from the personal animosity of the respondent's sister, who filed the original complaint with bar counsel, knowingly and improperly introduced at the hearing by bar counsel. The respondent maintained also that the disciplinary proceeding was pursued in part due to bar counsel's personal bias and under a conflict of interest, in retaliation for a prior incident when the respondent and bar counsel both worked at the office of bar counsel in 1991.

The court

In addition, before me, as he did in hie motion to show cause, the respondent made various allegations concerning an improper motive of bar counsel in pursuing the investigation, based on an asserted bias from a previous employment relationship (what the respondent describes as a "personal vendetta" that resulted in a request that he resign from the office of bar counsel in 1991). As noted, I allowed bar counsel's motion to file a.response to this argument, made by the respondent for the first time in his show cause motion; that response included two affidavits, one from the then bar counsel, and one from the then director of the consumer and attorney assistance program. Both affiants assert that they have no knowledge of any complaint, problem, or friction between current assistant bar counsel and the respondent at the time of his employment there in the early 1990s, while he was a law student. The director of the consumer and attorney assistance program asserts that, at this point in time, she remembers only that the respondent had' worked briefly in that office and that he never mentioned any issue or concern relative to current assistant bar counsel; then bar counsel asserts that the respondent was asked to resign for reasons unrelated to assistant bar counsel. I decline the respondent's request that, due to bar counsel's purported personal animosity and bias, unsupported by anything in the record, the charges against him be dismissed and fines and sanctions be imposed against bar counsel.

The single justice found no mitigating and substantial aggravating factors. (Mike Frisch) 

July 24, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Thursday, July 23, 2015

Alligator Mouth And Hummingbird Ass

The Louisiana Attorney Disciplinary Board has recommended a year and a day suspension of an attorney for unauthorized practice while suspended.

Respondent became ineligible to practice law on September 10, 2010 for failing to pay annual Bar membership dues and disciplinary assessments. Respondent became further ineligible on June 7, 2011 for failing to satisfy his MCLE requirements, and on September 9, 2011 for failing to satisfy trust account registration requirements. Respondent remains ineligible to date.

He continued to represent a client in a succession matter.

When pressed by the client over delay, he responded

When Mr. Brogna requested another update on April 20, 2011, Respondent replied, "My assistant is catching me up. I am sorry I put you in this position but my alligator mouth over ran my hummingbird ass. I will have it done shortly or advise and I will help you obtain another full time attorney. Again I am truly sorry and embarrassed." Mr. Brogna ultimately corrected the affidavits himself and sent them to Respondent for review. On April 27, 2011, Respondent informed, "Scott, the affidavit meets the statutory requirements for Louisiana. I have already sent my address to the affiants to return same to me…”

The client complained to the bar and the prosecution proceeded from there. (Mike Frisch)

July 23, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Contract Attorney V. Machine: Document Review Not Practice Of Law

An interesting decision of the United States Court of Appeals for the Second Circuit concludes that document review is not the practice of law under the facts of the case.

The litigation involves a contract attorney suing Skadden Arps and Tower Legal Staffing under the Federal Labor Standards Act

Lola, a North Carolina resident, alleges that beginning in April 2012, he worked for Defendants for fifteen months in North Carolina. He conducted document review for Skadden in connection with a multi‐district litigation pending in the United States District Court for the Northern District of Ohio. Lola is an attorney licensed to practice law in California, but he is not admitted to practice law in either North Carolina or the Northern District of Ohio.

Holding

We agree with the district court that: (1) state, not federal, law informs FLSA’s definition of “practice of law;” and (2) North Carolina, as the place where Lola worked and lived, has the greatest  interest in this litigation, and thus we look to North Carolina law to determine if  Lola was practicing law within the meaning of FLSA. However, we disagree with  the district court’s conclusion, on a motion to dismiss, that by undertaking the  document review Lola allegedly was hired to conduct, Lola was necessarily “practicing law” within the meaning of North Carolina law.

The court explains

The district court erred in concluding that engaging in  document review per se constitutes practicing law in North Carolina. The ethics  opinion does not delve into precisely what type of document review falls within  the practice of law, but does note that while “reviewing documents” may be  within the practice of law, “[f]oreign assistants may not exercise independent 10 legal judgment in making decisions on behalf of a client.” N.C. State Bar Ethics 11 Committee, 2007 Formal Ethics Op. 12. The ethics opinion strongly suggests that  inherent in the definition of “practice of law” in North Carolina is the exercise of at least a modicum of independent legal judgment...

The gravamen of Lola’s complaint is that he performed document review  under such tight constraints that he exercised no legal judgment whatsoever—he  alleges that he used criteria developed by others to simply sort documents into different categories. Accepting those allegations as true, as we must on a motion  to dismiss, we find that Lola adequately alleged in his complaint that he failed to  exercise any legal judgment in performing his duties for Defendants. A fair  reading of the complaint in the light most favorable to Lola is that he provided  services that a machine could have provided. The parties themselves agreed at oral argument that an individual who, in the course of reviewing discovery documents, undertakes tasks that could otherwise be performed entirely by a  machine cannot be said to engage in the practice of law.

Thanks to a faithful reader for sending this opinion. (Mike Frisch)

July 23, 2015 in Current Affairs | Permalink | Comments (0)

Crossing Boundaries

The discipline of a licensed clinical social worker for violation of professional standards was upheld by the New York Appellate Division for the Third Judicial Department.

The court rejected the contention that the attorney for the social worker was improperly disqualified

Petitioner retained Michael Sussman, who was already representing JC in a separate civil rights action against her employer in federal court. [The Office of Professional Discipline] moved to disqualify Sussman from representing petitioner...

To represent petitioner, Sussman would have had to effectively cross-examine JC, who was a key witness in OPD's case against petitioner. His simultaneous representation of her in a pending federal action potentially gave him access to information not otherwise available for use on cross-examination. Moreover, in this proceeding, Sussman would be attempting to diminish her credibility, whereas an opposite result would be pursued in the federal action. There was a sufficient conflict of interest to justify disqualifying Sussman.

The court found sufficient evidence that petitioner had crossed professional boundaries in his "couple therapy" treatment of DC and JC

OPD's expert, David Olsen, testified in detail regarding boundaries that a social worker must maintain, the training social workers receive about boundaries, and the reasons for the boundaries, which include protecting client confidentiality and making the client feel safe. He opined that petitioner had many boundary violations and that his actions deviated from the acceptable practices within the profession. Among other things, petitioner had, during the relevant time and while JC was a client, played golf with DC and JC's father and had eaten meals with JC and DC at their home. Petitioner attempted to explain his presence at JC's home as consistent with a counseling theory advanced by Salvator Minuchin advocating sessions in a client's home as facilitating the therapeutic process.  However, petitioner acknowledged that there was no documentation in his notes that he was using Minuchin's techniques in counseling JC and DC. Olsen also testified regarding the many deficiencies in petitioner's records including, but not limited to, the lack of progress notes.

The license is suspended for two years. (Mike Frisch)

July 23, 2015 in Comparative Professions | Permalink | Comments (0)

One Year For Structuring Bank Deposits To Avoid Reporting Requirements

An attorney has been suspended by the New York appellate Division for the Third Judicial Department for a federal conviction described by the New Jersey United States Attorney

Two lawyers with a Fairfield, N.J., law firm today admitted they structured $354,000 in client funds into their attorney accounts to avoid currency reporting requirements, U. S. Attorney Paul Fishman announced.

Goldie Sommer, 61, of Montville, and Edward Engelhart, 61, of Rockaway, attorneys with the firm of Sommer and Engelhart, pleaded guilty before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court to conspiring to structure transactions to avoid reporting large amounts of currency. They had surrendered to IRS agents in Newark on Nov. 16, 2011.

According to documents filed in this case and statements made in court:

Between Aug. 13, 2010, and Sept. 22, 2010, Sommer and Engelhart made numerous deposits totaling $354,000 into their attorney trust account in large, even dollar amounts. None of these deposits were made in an amount greater than $10,000, the amount that would have triggered the filing of a currency transaction report (“CTR”) with the IRS.

The court imposed a one-year suspension as reciprocal discipline based on the same sanction in New Jersey.

In New York, disbarment is automatic where a federal felony conviction mirrors a state crime.

Where, as here, there is no such statute, the court retains the authority to impose a lesser sanction. (Mike Frisch)

July 23, 2015 in Bar Discipline & Process | Permalink | Comments (0)

Facebook IPO Fraud Results In Consent Disbarment

The New Jersey Supreme Court accepted the consent disbarment of an attorney convicted of wire fraud.

Details from the United States Attorney's Office for the District of New Jersey

An Ocean County, New Jersey, attorney today admitted his role in a scheme that defrauded investors in connection with a Facebook IPO and several real estate deals, U.S. Attorney Paul J. Fishman announced.

Fred Todd, 61, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of transacting in criminal proceeds.

According to documents filed in this case and statements made in court:

Todd is an attorney with offices in Seaside Heights, New Jersey, and Los Angeles, California. His two co-defendants, Eliyahu Weinstein, 39, of Lakewood, and Aaron Glucksman, 41, of Brooklyn, New York, have already pleaded guilty to charges related to their roles in the scheme.

Weinstein, already convicted and sentenced to 22 years in prison in a separate Ponzi scheme, pleaded guilty on Sept. 3, 2014, to three counts of an indictment pending against him: one count of conspiracy to commit wire fraud, one count of committing wire fraud while on pretrial release, and one count of money laundering. He is scheduled to be sentenced on those charges on Dec. 15, 2014.

Glucksman has also pleaded guilty and was sentenced by Judge Pisano on May 5, 2014, to 52 months in prison, three years of supervised release, and ordered him to forfeit $1.2 million. Judge Pisano ordered Glucksman’s sentence to run partially concurrently with a 36-month sentence recently imposed by U.S. District Judge Raymond J. Dearie of the Eastern District of New York in an unrelated case.

In February 2012, Todd and his conspirators offered a pair of investors (referred to in the information as the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The offer was particularly attractive because large blocks of the shares were extremely difficult to get and were expected to increase in value at the time of the IPO. Weinstein and his conspirators did not actually have access to the shares.

Based on misrepresentations by the conspirators, the Facebook victims wired millions of dollars between February and March of 2012 to an account Weinstein and a conspirator controlled. Weinstein and another conspirator provided investors with false documents showing companies owned by various conspirators held assets, which would secure the Facebook victims’ investment.

The conspirators did not use any of the Facebook victims’ money to purchase Facebook shares, instead misappropriating it for their own use.

Around the same time, Todd and his conspirators also persuaded victims to invest in the purported purchase of an apartment complex in Florida. They told the victims that Weinstein had the opportunity to purchase the notes on the condominiums at a discounted price and immediately flip it at a substantial profit. The victims wired money to complete the purchase, but Todd and his conspirators instead used the money for their own purposes.

The conspiracy count to which Todd pleaded guilty carries a maximum potential penalty of 20 years in prison; the transacting in criminal proceeds count carries a maximum potential penalty of 10 years in prison. Both are also punishable by a potential fine of $250,000 or twice the gross loss or gain from the scheme, whichever is greater.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, for the investigation leading to today’s guilty plea. He also thanked agents of IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their role in the investigation.

(Mike Frisch)

July 23, 2015 in Bar Discipline & Process | Permalink | Comments (0)