Saturday, March 12, 2011

Disbarred For Tax Shelter Advice

The New York Appellate Division for the Second Judicial Department held that a federal conviction for conspiracy to defraud the IRS and evade taxes is "essentially similar" to a state felony and thus results in automatic disbarment. The court's analysis:

In determining whether a "foreign" or federal felony is "essentially similar" to a New York felony, this Court may consider other factors, including the plea allocution and trial record (see Matter of Woghin, 64 AD3d 5; Matter of Port, 57 AD3d 139; Matter of Fury, 145 AD2d 259; Matter of Ashley, 263 AD2d 70). According to the petitioner, the respondent "was convicted of conspiring with others to create and implement illegal tax shelters for clients of Ernst & Young as well as for his own personal tax benefit. This scheme included making false statements and providing false documents to the IRS as well as understating his personal income." Further, the respondent "was convicted of filing a fraudulent U.S. Individual Income Tax Return, Form 1040, which substantially understated his taxable income." The respondent does not object to this description of the offense, but points out that he "was not convicted of filing a false tax return which substantially understated his taxable income. Rather, the tax evasion counts of [the] conviction[s] related to the tax returns of clients of . . . Ernst & Young." Further, the respondent consents to his name being stricken from the roll of attorneys.

(Mike Frisch)

March 12, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Friday, March 11, 2011

Third Time's A Censure (Not A Charm)

The New Jersey Supreme Court has censured an attorney admitted in 1984 for misconduct in a single case. The attorney engaged in gross neglect and failed to reduce the fee agreement to writing.

Notably, the attorney has twice been reprimanded for gross neglect of client matters and related violations. 

Here, the attorney never responded to the multiple letters from the Bar and did not participate in the disciplinary process.

There are places where the failure to respond in and of itself results in suspension. Four members of the Disciplinary Review Board would have suspended the attorney for three months. (Mike Frisch)

March 11, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Data on the "Employed at Graduation" U.S. News Rankings Input

By Bill Henderson & Andrew Morriss

Yesterday, Bob Morse of U.S. News published a blog post in which he signaled a change in the law school rankings methodology, specifically with regard to employment.  The prevailing view on the law school administrator list-serves (which nearly a dozen people have forwarded to us) is that U.S. News will be increasing the weighting of "employed at graduation," presumably because U.S. News Editor Brian Kelly sent a letter to law school deans--reprinted in Bob's blog post--discussing the importance of employed-at-graduation as a metric.

We have zero inside information, but we are willing to bet a substantial sum that any methodology change will be in a completely different direction.  Here is why.  Over the last decade, fewer and fewer schools have been supplying U.S. News with employed-at-graduation data.  Employment at graduation is not a statistic required or collected by the ABA; as such, its accuracy cannot be checked through cross-reference to the annual ABA-LSAC Official Guide

But much more significantly, when a school fails to provide this data, U.S. News has--up until now--imputed the figure based on employment at 9 months.  (Kudos to Ted Seto for unraveling this mystery.  See Understanding the U.S. News Law School Rankings.)  Crudely speaking, the magazine applied a roughly 30% discount rate on the employed at 9 months figure.   Earlier this year, Paul Caron suggested that if a school's employed-at-graduation rate is more than 30% lower than its employed at 9 month rate, it is "rankings malpractice" to supply U.S. News with the data.

Employed at Graduation
As readers can see from the above chart (generated by Paul Caron in his rankings malpractice post), a large proportion of law schools have figured out the payoffs.  Over the last decade, the percentage of non-reporting schools has skyrocketed. With this information in mind, Bob Morse's blog post may seem less cryptic: [after the jump]

Continue reading

March 11, 2011 in Current Affairs, Professional Responsibility | Permalink | Comments (1) | TrackBack (0)

Thursday, March 10, 2011

Louisiana Lightning

A Louisiana Hearing Committee has proposed a suspension of a year and a day for an attorney for misconduct unrelated to the practice of law.

The attorney was arrested in Lafayette, Louisiana in 2006 on charges of drunk driving, possession of marijuana and possession of cocaine. After a bench warrant was issued, the charges were resolved. The second arrest was in Oakbrook, Illinois in 2007 and involves charges of DUI, speeding and improper lane usage. A bench warrant was issued after the attorney posted bond and failed to appear. The warrant remains active.

The attorney must petition for reinstatement and demonstrate that the Illinois matter has been resolved. (Mike Frisch)

March 10, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Running As Rehabilitation

A North Carolina attorney who was disbarred in 1996 has filed a petition for reinstatement. Among the averments:

Petitioner, in preparation to resume the responsibilities of a public citizen/licensed attorney, has sought to cultivate his knowledge of the law beyond its use for clients; and has sought to employ that knowledge in reform of the law while providing civic leadership by participating in political forums, rallies and the general electoral process culminating in a run for the N.C. Republican Party nomination for the United States Senate in 2010.

Here is some campaign video information. (Mike Frisch)

March 10, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Judging With The Stars

A recent opinion from the South Carolina Committee on Standards of Judicial Conduct:

OPINION NO. 1 - 2011

RE: Propriety of a part-time judge’s participation as a “Celebrity Judge” at a fund-raiser.

FACTS

A part-time judge inquires into the propriety of acting as a “Celebrity Judge” as part of a fund-raising event for a local charity. The “Celebrity Judge” is not a part of the actual collecting or requesting of any donations. This is an annual event where the charity participants are picked up and placed in a pretend jail; when the participant pays the pledged amount, he or she is released in front of the “Celebrity Judge.” The judge inquires as to whether participation as the “Celebrity Judge” would violate the Code of Judicial Conduct.

 

CONCLUSION

A part-time judge may not participate as a “Celebrity Judge” because the participation would lend the prestige of judicial office to be used by others for fund-raising.

OPINION

A judge may serve as an officer, director, trustee or non-legal advisor of an organization or governmental agency devoted to the improvement of the law, the legal system or the administration of justice or of an educational, religious, charitable, fraternal, or civic organization not conducted for profit, subject to limitations and other requirements of the Code. Rule 501, SCACR, Canon 4.C.(3). A judge, as an officer, director, trustee, or non-legal advisor, or as a member or otherwise, may assist such an organization in planning fund-raising and may participate in the management and investment of the organization’s funds, but shall not personally participate in the solicitation of funds or other fund-raising activities, except that a judge may solicit funds from other judges over whom the judge does not exercise supervisory or appellate authority.” Canon 4.C.(3)(b)(i) (emphasis added). Furthermore, a judge shall not use, or permit the use by others, the prestige of judicial office for fund-raising. Canon 4C(3)(b)(iv).

Here, the judge will be participating in “fund-raising activities” and acting a “Celebrity Judge” would be lending the prestige of judicial office to a fund-raising event. Thus, judge should decline to participate.

(Mike Frisch)

March 10, 2011 in Judicial Ethics and the Courts | Permalink | Comments (0) | TrackBack (0)

Hearing Held Without Accused Attorney Results In Proposed Suspension

An Illinois Hearing Board has recommended a suspension of six months and until further order in a matter involving an attorney's false statements to a tribunal in a post-dissolution of marriage proceeding. The board explained its reasoning:

 In this case Respondent’s admission that he reviewed the 1986 order, which was at the heart of his petition, is persuasive evidence that his statements were, in fact, intentionally made. The 1986 judgment was not lengthy. Of the two and one-half pages which comprise the judgment, the first page provides information regarding the marriage and the parties’ employment. The final page contains directives to the parties regarding maintenance, debts, division of Alfred’s pension and attorney’s fees. The paragraphs are direct and explicit, and leave no room for confusion or interpretation as to the payment of maintenance and pension benefits.

We simply cannot believe that anyone reading the paragraphs in the 1986 judgment would honestly put forth the assertions contained in Respondent’s petition, which assertions, we note, were favorable to his client. Therefore, we reject his defense, as stated in his answer, that he did not make any intentional misrepresentations. We also note that Judge Rivera, in ruling upon Geneva Smith’s request for attorney’s fees for having to respond to Respondent’s petition, concluded that Respondent made intentionally false statements in his petition. Judge Rivera’s resulting sanction order against Respondent and his client was upheld on appeal.

Respondent made another false and dishonest statement in January 2004 when he represented in a verified motion to substitute a judge as a matter of right that the motion was his first such request. Contrary to his sworn assertion, he had previously filed a motion to substitute a judge as of right on February 8, 2001, which motion was granted on that same day. In Respondent’s answer to the Administrator’s Complaint he admitted he was aware that 735 ILCS 5/2-1001(a)(2)(i) provides "each party shall be entitled to one substitution of judge without cause as a matter of right" and admitted that his statement in his January 2004 motion was incorrect. He denied, however, that he recalled filing any previous motion and therefore denied that his 2004 statement was intentional.

We do not accept Respondent’s professed lack of recall concerning his prior motion. Although there was a three year gap between the filing of his two motions to substitute as a matter of right, his February 2001 motion was memorable for being filed almost immediately after Judge Lowrence denied his motion to substitute for cause, and the motion to substitute as of right did result in the case being transferred. In fact, of all Respondent’s many attempts to have the Smith case reassigned, the February 2001 motion was the only one that was successful. We further note that the order granting the February 2001 motion bears Respondent’s handwritten name and address. Under the circumstances, we reject the contention that Respondent was unaware of his previous filing at the time he filed his motion in January 2004. In so finding, we are in accord with Judge Lopez who also did not accept Respondent’s claim of inadvertent error, and so held in his order imposing sanctions upon Respondent.

For the foregoing reasons, we find the Administrator proved by clear and convincing evidence that Respondent made a statement of material fact to a tribunal which the lawyer knows or reasonably should know is false in violation of Rule 3.3(a)(1), and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4). We further find that Respondent engaged in conduct prejudicial of the administration of justice in violation of Rule 8.4(a)(5), and engaged in conduct which tends to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.

The hearing in the disciplinary case had been continued once at the request of the respondent and his attorney. A second request was denied. A third request from newly-retained counsel also was denied. The hearing went forward without respondent and his new attorney.  (Mike Frisch)

March 10, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 9, 2011

Sham Or Real Marriage?

A story posted today at SFGate.com describes a recent California disciplinary action:

A veteran Pacifica attorney is facing disbarment for allegedly duping an 85-year-old client into giving her $339,000, entering into a sham marriage with him and ignoring his will by having him cremated after his death.

Linda Lowney "took advantage of a lonely, sick old man" and thwarted his intent to transfer his estate to his nieces, Judge Pat McElroy of the State Bar Court said Friday.

She ordered the immediate suspension of Lowney, who has practiced law since 1978 and had no disciplinary actions on her record. The disbarment could be appealed to the state Supreme Court, but Lowney's attorney, Jonathan Arons, said Tuesday he had little hope that such an appeal would succeed, despite his disagreement with the ruling.

"I think they (the court) misunderstood the relationship," Arons said. "This was a marriage."

The attorney was 54 when she married a man who was "85 and in poor health."

According to SFGate:

Lowney also sued for a share of Tollefsen's estate. A state appeals court ruled against her in 2009, suggested "financial abuse of elders" was involved and referred the case to the State Bar.

(Mike Frisch)

March 9, 2011 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

A Priest And An Attorney

The web page of the Ohio Supreme Court reports:

The Supreme Court of Ohio has indefinitely suspended the law license of [an] Avon attorney...for violations of state disciplinary rules arising from conduct that resulted in his convictions on federal felony counts of filing false income tax returns, conspiring to defraud the Internal Revenue Service and attempting to obstruct the ensuing investigation. [The attorney's] license has been under an interim suspension since April 2009, when the Court was informed of his felony convictions.

In a 7-0 per curiam opinion announced today, the Court adopted findings by the Board of Commissioners on Grievances & Discipline that between the mid-1990s and 2003 [the attorney], while serving as treasurer and later as chief financial officer of the Catholic Diocese of Cleveland, engaged in a conspiracy with a co-defendant to conceal income of more than $1.4 million, filed tax returns in which that income was not disclosed, and collaborated with the co-defendant in presenting fraudulent documentation of alleged expenses during a 1999 IRS audit.

The Court agreed with the board’s conclusions that [his] actions violated the state disciplinary rules that prohibit  an attorney from engaging in illegal conduct involving moral turpitude; conduct involving fraud, deceit, dishonesty or misrepresentation; conduct that is prejudicial to the administration of justice and conduct that reflects adversely on an attorney’s fitness to practice law.

In imposing an indefinite license suspension, the Court specified that [the attorney], who is now on supervised release after serving a prison term for his convictions, will not be eligible to apply for reinstatement until he has completed his term of supervised release and has executed a final agreement with the IRS for restitution of $395,154 in delinquent taxes, interest and penalties.

The attorney's story was that the priest who had employed him wished him to continue to provide services for a yearly payment of $250,000 that was not disclosed to the Diocese. The payments were made off the books and not reported to the IRS.

The court's opinion is linked here.

Additional links to information courtesy of BishopAccountability.org. (Mike Frisch)

 

March 9, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

A Kidney For Your Wife

The Mississippi Court of Appeals has held that a covenant not to be compete was reasonable and enforceable, reversing the judgment of the lower court. The circumstances of the case are a bit unusual, if not unique.

The employee went to work with the company as a teenager with little prior work experience. She was a broker of meat and poultry products between buyers ans sellers throughout the nation. At the outset, she signed a covenant not to compete with the company if she departed.

She married the son of the owners of the business. He got sick and needed a kidney transplant. A close friend donated a kidney. The donor and the employee had an affair after the transplant operation. The husband learned of the affair. He took the news badly. They divorced with a degree of acrimony and she left her job with the business.

The litigation here involves her employment by a direct competitor. (Mike Frisch)

March 9, 2011 in Law & Business, Law & Society | Permalink | Comments (0) | TrackBack (0)

The Whole Neighborhood Is Watching

An opinion from the South Carolina Advisory Committee on Standards of Judicial Conduct:

OPINION NO. 1 - 2011

RE:  Propriety of a Magistrate Court Judge speaking at a Neighborhood Watch meeting.

FACTS

A Magistrate Court Judge has been asked to speak at a Neighborhood Watch meeting.  The Judge, as well as a Municipal Judge and a solicitor have been asked to participate in what has been described as a panel forum at the meeting.  The format of the meeting is for the judge and solicitor to provide education information as to their respective roles in “law enforcement.” The members of the Neighborhood Watch association will be invited to submit written questions which will be screened by the association chairman and presented to the panelists.  The members will be permitted to express their concerns about issues in law enforcement and neighborhood safety, and the panelists will be asked to comment on their respective functions and roles.  The association chairman mentioned that one area of concern with the members has been the perception that alleged criminals are quickly released on bond and the membership wants information on how to stop that cycle.

CONCLUSION

A Magistrate Court Judge may speak at a Neighborhood Watch meeting.

OPINION

Rule 501, Canon 4(C)(3), SCACR, expressly provides that a judge should regulate his extra-judicial activities to minimize the risk of conflict with his judicial duties.  The Code permits a judge to engage in extra-judicial activities, as long as they do not: 1) cast doubt on the judge’s capacity to act impartially; 2) demean the judicial office; or 3) interfere with the proper performance of judicial duties.  Canon 4(A).  Canon 4(B) permits a judge to speak or lecture on the law, the legal system, the administration of justice, and other non-legal subjects, subject to the other requirements of the Code.  

The topic on which the judges would be speaking--the Magistrate Court’s function and role in criminal proceedings as well as the bond procedure--appear to meet the restrictions of the Code of Judicial Conduct.  However, the Magistrate Court Judge should not comment on specific cases pending before the Magistrate Court or decisions made by another court.  In addition, the Magistrate Judge should avoid topics such as how to provide better security in the neighborhood as such opinions may cast reasonable doubt on the Judge’s ability to act impartially. 

(Mike Frisch)

March 9, 2011 in Judicial Ethics and the Courts | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 8, 2011

The Sting

The New York Appellate Division for the First Judicial Department imposed a three month suspension of an attorney convicted of misdemeanor solicitation of legal business in violation of New York law. The facts of the offense:

This conviction arose out of a sting operation targeting a medical clinic called the Medical Arts Center, in Queens County, whose manager, Arthur Bogoraz, ultimately pled guilty to enterprise corruption based on an insurance fraud scheme. The incident that led to respondent's guilty plea occurred when a staff member at the medical clinic telephoned respondent and informed her that the clinic had a patient who had sustained potentially serious injuries, but who had declined the clinic staffer's suggested referral to respondent. Respondent then instructed her paralegal to seek out and persuade that patient to retain her law firm. The purported patient was actually an undercover officer, and respondent was charged with violations of Judiciary Law sections 479 and 482, resulting in her plea of guilty to the charge under section 479.

The Depatmental Disciplinary Committee had sought an eighteen month suspension.

The court rejected allegations beyond the facts that established the conviction. The allegations were premised on Borogaz's testimony. His "outright contradictions and purported failures of memory..." justified rejecting his evidence.

The court also rejected claims that the attorney had engaged in conflicts of interest by simultaneously representing drivers and passengers in automoblie collision cases:

We reject the Committee's contention that an aggravating factor is established by respondent's simultaneously representing drivers and passengers in automobile collision cases. Respondent acknowledged that on a number of occasions over the years she had represented both drivers and passengers in the same accident, but explained that she only did so after (1) ascertaining that there was no viable cross-claim for negligence on the driver's part and that therefore the clients' interests were not adverse, (2) orally advising the clients of the nature of the potential conflict and the benefits and disadvantages of dual representation, and (3) having them sign a waiver form. Given the Hearing Panel's finding that respondent was credible, which we perceive no basis to dispute, we accept this assertion. It is the Committee's position that nevertheless the conflict created by such a situation is non-waivable...and that in any event the waiver forms respondent used were insufficient. However, [the cited case] concerned an attorney who "clearly anticipated that a cross claim would be interposed" against his driver client, but nevertheless also undertook to represent the driver's passenger. It does not stand for as broad a proposition as that suggested by the Committee. Neither [the cited case] nor the then-applicable Disciplinary Rule, DR 5-105(A), categorically preclude the possibility of a proper waiver where there is no viable cross-claim against the driver. Nor does [another cited case] support the Committee's position; there, too, the attorneys "were aware of the potential conflict" and yet failed to advise the clients of the conflict. (citations omitted)

(Mike Frisch)

March 8, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

The Pagans Of Atlantic Beach

The South Carolina Supreme Court has imposed a 90 day definite suspension for ethics violations predicated on the following facts:

In 2004, Respondent represented the Atlantic Beach Christian Methodist Episcopal Church("Church") in a legal action it filed against the Town regarding a zoning dispute.  The Town Attorney was Charles Boykin.  The parties settled the action in 2007.  As part of the settlement, the Church's action was dismissed, the Town paid damages to the Church, and the Church promised future compliance with all of the Town's building, permitting, and zoning requirements. 

On April 30, 2009, Kenneth McIver, the new Town Manager, sent a notice about the need for zoning compliance to the owners of the Church property, Vonetta M. Nimocks and Eboni A. McClary ("Church's Landlords").  In his notice, McIver stated that as part of the prior settlement, "the judge ordered that the Church must comply with the Town's Zoning Ordinances and that a request for compliance must come from you, the owner[s]."  McIver copied the notice to the Church's pastor, who gave it to Respondent.    

On May 6, 2009, Respondent sent a letter about McIver's notice to the Church's Landlords.  Respondent sent copies of his letter to McIver and Boykin.  The remarks made by Respondent in his May 6th letter are the subject of this disciplinary proceeding.  The letter reads in full as follows:

You have been sent a letter by purported Town Manager Kenneth McIver.  The letter is false.  You notice McIver has no Order.  He also has no brains and it is questionable if he has a soul.  Christ was crucified some 2000 years ago.  The church is His body on earth.  The pagans at Atlantic Beach want to crucify His body here on earth yet again.

We will continue to defend you against the Town's insane [sic].  As they continue to have to pay for damages they pigheadedly cause the church.  You will also be entitled to damages if you want to pursue them.

First graders know about freedom of religion.  The pagans of Atlantic Beach think they are above God and the Federal law.  They do not seem to be able to learn.  People like them in S.C. tried to defy Federal law before with similar lack of success.

McIver delivered the letter to the Town Council, and three council members thereafter filed a disciplinary complaint against Respondent.  ODC instituted formal charges against Respondent as a result of his conduct.

At the hearing on June 8, 2010, counsel for ODC stated:  "ODC alleges that [Respondent's] statements questioning whether Mr. McIver has a soul, saying that he has no brain, calling the leadership of the Town pagans and insane and pigheaded violates his professional obligations, which include his obligation to provide competent representation to his clients; his obligation under Rule 4.4 to treat third parties in a way that doesn't embarrass them; Rule 8.4 to behave in a way that doesn't prejudice the administration of justice; and also [] the letter was not in conformity with his obligations under his oath of office, Rule 402(k)." Counsel for ODC further alleged that Respondent had failed to cooperate with disciplinary authority by refusing to answer the allegations against him, threatening to sue the complainants for filing the grievance, and questioning ODC's authority. 

 The court on sanction:

Based on Respondent's blatant incivility and lack of decorum in this instance and the aggravating factors found by the Hearing Panel, including his disciplinary history, we impose a definite suspension of ninety days.  We further order Respondent to complete the Legal Ethics and Practice Program administered by the South Carolina Bar within six months of reinstatement.  Respondent's conduct in this matter reflects poorly on himself as a member of the legal profession and reflects negatively upon the profession as a whole.  He represented to this Court at oral argument that in the future he will conduct himself in accordance with the RPC and treat all persons in a civil, dignified, and professional manner as is expected of all members of the South Carolina Bar.  We expect nothing less.

(Mike Frisch)

March 8, 2011 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

On The Carpet

The web page page of the Ohio Supreme Court reports the interim suspension of a recently convicvted attorney. Floordaily has the story:

The former house attorney for Cincinnati-based Buddy's Carpet was sentenced last week to 18 months in federal prison for his role in a company tax fraud scheme, according to Law.com.

Alan Koehler and four other people, including company owner Leif Rozin, were indicted in 2005 for taking part in $3.6 million worth of fraudulent insurance purchases in order for company owners to avoid paying taxes on the money, according to the story.

Buddy's Carpet was a retail chain with more than 30 stores in Ohio, Kentucky and Indiana.

In 2008 a jury found Koehler and Rozin guilty of conspiracy to defraud the IRS. Koehler was also found guilty of assisting in the filing of a false corporate income tax return.

(Mike Frisch)

March 8, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Monday, March 7, 2011

Misappropriation = Disbarment

An attorney who had misappropriated funds entrusted by clients was disbarred by the New Jersey Supreme Court. The attorney had received a series of eight checks from the client for the purpose of completing the client's purchase of two businesses; one a cleaners and the other a carwash.  The attorney used the proceeds for his own purposes, failed to complete the transactions and ignored requests for return of the funds. The Bar's investigation brought to light other instances of misappropriation.

The attorney had no prior disciplinary but had been suspended for his failure to cooperate with the investigation. (Mike Frisch)

March 7, 2011 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)