Friday, September 26, 2008

Suspension Insufficient

The web page of the Ohio Supreme Court notes a decision issued yesterday:

Cincinnati attorney Donald  M. Powers Jr. has been disbarred for his participation in a criminal real estate “flipping” scheme in which a title company that he partly owned defrauded various financial institutions, resulting in losses of approximately $3.5 million. Powers’ law license has been under an interim suspension since January 2006, after he entered guilty pleas to federal felony counts of making a material false statement in a loan application and filing a false income tax return.


The court adopted findings by the Board of Commissioners on Grievance & Discipline that Powers, his wife and several other persons purchased low-value homes in the greater Cincinnati area, obtained inflated appraisals of the value of those properties, recruited buyers for those properties who might not be able to afford them, created false documents including W-2 forms, pay stubs, bank statements and employment verifications inflating the stated income of the buyers, and submitted false loan “packages” to mortgage lenders in order to obtain a loan for much more than the actual value of the property.   


In rejecting the disciplinary board’s recommendation that Powers be indefinitely suspended from practice rather than permanently disbarred, the Court noted that in his guilty pleas to criminal charges Powers admitted that he personally owned five of the houses that were “flipped” at enormous profit by means of the criminal scheme, and that he personally signed numerous federal housing agency forms falsely attesting that the buyers had provided a significant cash down-payment when he knew they had not done so.

The court's decision is linked here. Disbarment was required in light of the magnitude of the misconduct, involving theft-type behavior. The court rejected the assertion that the misconduct was due to the lawyer's "inattention" and that others`were more deeply involved in the criminal scheme.  (Mike Frisch)

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