Wednesday, March 7, 2012

Not Exactly Disbarred

The New York Appellate Division for the First Judicial Department has accepted the resignation and removed from its rolls an attorney convicted in an investment fraud scheme.

The court described the conviction:

...respondent pled guilty, in the United States District Court for the Southern District of New York, to conspiracy to commit money laundering (18 USC § 371; 18 USC §§ 1956[a][1][A][i], [B][i]), stemming from his allowing his client, former investment advisor Kenneth I. Starr, to use respondent's escrow accounts in furtherance of Starr's illegal use of investor funds, by wiring illegally-obtained funds into and out of those accounts.

The court concluded that the crime was sufficiently dissimilar from any state felony so as to avoid automatic disbarment, as Departmental Disciplinary Committee had argued.

The result was appropriate in light of the attorney's admissions:

The Committee relies on an admission by respondent that he knew that a substantial portion of the funds being wired by Starr were the proceeds of unlawful activity, and knew that allowing Starr to do so was illegal, and another more specific admission that he allowed Starr to transfer into the account $1 million stolen from a talent agency executive, and at Starr's direction respondent himself transferred the same amount from the account to the bank account of a certain actress. However, these statements fail to establish that respondent admitted acting with the intent to defraud Starr's investors. Scheme to defraud in the first degree, as defined by Penal Law § 190.65, requires an intent to defraud on the part of the offending party, as opposed to merely facilitating fraudulent conduct by a third party...

Acceptance of respondent's resignation now will expeditiously remove respondent from the roll of attorneys and dispense with the need for undertaking the protracted process that a serious crime hearing would entail, the better procedure here.

The court declined Departmental Disciplinary Committee's request that it order the attorney to pay restitution. (Mike Frisch)

Bar Discipline & Process | Permalink

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