Thursday, December 7, 2017

Bar Investigations And The Fifth Amendment

The Nevada Supreme Court has ruled on a Fifth Amendment assertion made in the course of a bar investigation

In this original petition for a writ of mandamus or prohibition we are asked to consider whether an attorney can assert his Fifth Amendment right against self-incrimination to quash subpoenas issued by the State Bar that seek production of client accounting records and tax records. With regard to the requested client accounting records, we adopt the three-prong test under Grosso v. United States, 390 U.S. 62 (1968), to conclude that the right against self-incrimination does not protect petitioner from disclosure. However, with regard to the requested tax records, we conclude that the Southern Nevada Disciplinary Board must hold a hearing to determine how the subpoenaed tax records are relevant and material to the State Bar's allegations that petitioner mismanaged his client trust account and whether there is a compelling need for those records. Accordingly, we deny the petition in part and grant it in part.

The case is Agwara v. Nevada State Bar and Southern Nevada Disciplinary Board

In April 2014, petitioner Liborious I. Agwara, Esq., testified at his personal bankruptcy proceedings that he had not implemented a reliable or identifiable system of accounting for his client trust account. Counsel for petitioner's bankruptcy proceedings and the presiding bankruptcy judge advised respondent State Bar of Nevada of petitioner's potential ethical violations. As a result, the State Bar opened a grievance file to investigate petitioner's trust account management. Moreover, the bankruptcy court froze petitioner's Nevada State Bank trust account.

The State Bar then obtained petitioner's trust account records from Nevada State Bank, which indicated that he transacted client monies through a Wells Fargo Bank operating account while his Nevada State Bank trust account was frozen. The State Bar also obtained records from Wells Fargo Bank which revealed that petitioner commingled his client, personal, and law practice funds through his operating account.

Approximately one month after the bankruptcy court lifted the freeze on petitioner's Nevada State Bank trust account, petitioner opened a Wells Fargo Bank trust account. Wells Fargo Bank records established that petitioner routinely failed to fully distribute client funds deposited into this trust account. In response to the bank records obtained from Nevada State Bank and Wells Fargo Bank, coupled with petitioner's testimony from his bankruptcy proceedings, the State Bar served petitioner with two subpoenas duces tecum.

The court holds that trust records are required and no 5th Amendment privilege exists; but it is unclear whether the subpoena for tax records is justified

it is unclear whether the circumstances warrant production of tax records, and it is additionally unclear whether such a broad request is justified.' Accordingly, we cannot determine whether production of the tax records is clearly appropriate or if the tax records are reasonably relevant and material to the issue at hand See id. at 520, 874 P.2d at 765-66. Further, we cannot determine whether there is a compelling need for the tax records or if respondents are merely asking for the tax records. See id. at 520, 874 P.2d at 766. Therefore, we direct the Southern Nevada Disciplinary Board to hold a hearing to determine how the tax records are relevant and material to the State Bar's allegations that petitioner mismanaged his client trust account and to assess whether there is a compelling need for the records. Based on the foregoing, we deny petitioner's petition for writ relief with regard to the requested client accounting records; however, we grant his petition for writ relief with regard to the requested tax records and direct the clerk of this court to issue a writ of prohibition directing the Southern Nevada Disciplinary Board to vacate its order to the extent it required petitioner to comply with the first subpoena that sought disclosure of tax records and to hold a hearing, consistent with this opinion.

(Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2017/12/the-nevada-supreme-court-has-ruled-on-a-5th-amendment-assertion-in-a-bar-investigation-in-this-original-petition-for-a-writ.html

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