Tuesday, March 14, 2017

Husband, Associate Charged With Aiding Disbarred Attorney's Unauthorized Practice

The Illinois Administrator has filed an amended complaint alleging that two attorney assisted a suspended {and later disbarred) attorney in engaging in unauthorized practice and related misconduct

In January 2013, Respondent Allegra became an associate at Niew Legal Partners, P.C., which was located at 1000 Jorie Boulevard, Suite 206 in Oakbrook. Respondent Niew and Ms. Niew were partners at Niew Legal Partners, and Respondent Allegra and attorney Ryan Liska ("Liska") were associates at Niew Legal Partners. Heather Tichy ("Tichy") was a paralegal at Niew Legal Partners and Bernadette Ibaska ("Ibaska") was the secretary at Niew Legal Partners. In March 2013, Liska left Niew Legal Partners.

Ms. Niew was disbarred in 2013 "as a result of her mishandling of her client’s $2.34 million."

The allegations as to Mr. Niew

Between November 20, 2013, the date that the Court entered an order disbarring Ms. Niew, through late May or early June 2014, Respondent Niew allowed Ms. Niew to maintain a presence at his law office located at 1000 Jorie Boulevard, Suite 206 in Oakbrook.

Between November 20, 2013 and about early June 2014, Ms. Niew maintained an office in the Jorie Boulevard suite, and she was physically present in the office four to five times per week. During that same period of time Respondent Niew observed Ms. Niew talking on the office telephone, writing letters on the office computer, and conducting meetings. Although Respondent Niew knew that his wife had been disbarred, he encouraged her to deposit money into the firm’s client funds account that he knew or should have known was client money for legal services.

And as to Mr. Allegra

Between November 2013 through May 2014, Respondent Allegra, an affiliated attorney at the Law Offices of Stanley Niew, participated in meetings between Ms. Niew and at least six legal clients, including Harry Haralampopolous, Maciej Wilhelm, Peter Vhalos, Julia and Michael Maloney, and John Hryn. Respondent Allegra accepted instructions from Ms. Niew regarding legal work to be completed by Respondent Allegra on behalf of at least one client, Arno Reichel.

On or about November 19, 2013, while Ms. Niew was suspended on an interim basis until further order of the Court, Peter Vlahos sent a facsimile to Ms. Niew via the law firm facsimile machine. The facsimile consisted of Peter Vlahos’ handwritten cover letter addressed to Kathleen Niew, and a copy of a letter to John Vlahos dated October 4, 2013 from the Volunteer Coordinator at the DuPage County Circuit Court related to In re the Estate of Penelope Vlahos, a disabled person, case number 2011P1089. The October 4, 2013 letter stated that John Vlahos was the court appointed guardian of Penelope Vlahos, and that his annual accounting and report on the condition of the Penelope Vlahos had been scheduled for hearing on January 2, 2014.

Mr. Niew's answer to the allegations is linked here.  Mr Allegra's answer is linked here.

The Chicago Tribune covered Ms. Niew's disbarment and noted

This is not the first time the court has sanctioned Niew. In 2001, justices suspended her license for nine months based on allegations she forged clients' signatures. In 1989 the state disciplined her for falsely stating that she was single when she married her current husband, attorney Stanley Niew.

The Tribune reported on her conviction and almost six-year sentence.

Prosecutors had sought a 10-year prison term for Niew, who had pleaded guilty to 10 counts of fraud last June. Before her indictment, she was a self-styled real estate and probate law guru known for her Saturday morning call-in radio show on WIND-AM 560.

The judge said Niew's betrayal of her clients played a part in his decision to sentence her to five years and 10 months in prison. He also ordered her to pay restitution of $2.34 million, but it was unclear if Niew would be able to come up with any of the money.

"Something has to be done when a case like this comes up," he said.

Leinenweber also found Niew responsible for defrauding another client out of $500,000. Niew had led the client to believe she needed the money for her upcoming divorce proceedings, but prosecutors said that the divorce was a fiction and that Niew blew the money in the same way.

(Mike Frisch)

March 14, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Monday, March 13, 2017

Threatening Letters Get Attorney Reprimanded

An attorney has been reprimanded with terms by the Fifth District Subcommittee of the Virginia State Bar for threatening to institute civil and criminal charges solely to obtain an advantage on behalf of his client.

Virginia Rule 3.4(i) prohibits the conduct.

The attorney represented a doctor and her clinic in a suit brought against a former patient who had posted an unfavorable Yelp review.

The complainant also posted an unfavorable review and testified on behalf of the sued reviewer. He testified that his wife was billed for medical services despite never being treated there.

Two days later, the attorney wrote to the complainant threatening to pursue perjury charges and a civil defamation claim and offering to discuss a settlement.

The complainant instead went to the Bar.

At the disciplinary hearing, the attorney testified that such threats were part of his regular practice. He produced "more than 30" such letters.

The term is probation for two years (and, presumably, a cessation of such letters). (Mike Frisch)

March 13, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Probation For Sloppy Billing

A stayed four month suspension with conditions has been imposed by the the Maine Supreme Judicial Court for billing misconduct.

The victim

On July 10, 2015, John D. Pelletier, Esq. Executive Director of the Maine Commission On Indigent Legal Services (MCILS) filed a grievance complaint against Attorney Fethke. The complaint followed Attorney Fethke's suspension from the MCILS Roster of Eligible Attorneys for receiving new assignments due to "billing misconduct.” MCILS allowed Attorney Fethke to complete his existing cases, and assigned additional cases involving existing clients to him. Although Attorney Fethke's period of suspension has run, he has not reapplied for appointment to the MCILS Roster...

Attorney Pelletier alleged that during that time period Attorney Fethke had submitted payment vouchers to MCILS that did not accurately reflect the dates on which he performed the work detailed in the vouchers; that he entered time into the billing system in advance for work which had not yet been performed by him; and that his billings generally reflected disregard of his obligation to accurately document his work and a cavalier, attitude about the need to accurately respond to MClLS inquiries about that work.

In response to Attorney Pelletier's complaint Attorney Fethke admitted that his "timekeeping and billing practices were sloppy," and that he "did not appreciate the need to consistently and accurately reflect the work actually being done in terms of dates and time of billing." Attorney Fethke recognized that his practices needed to "change and improve," but denied that his billing errors were intentional.

Findings

Attorney Fethke fully acknowledges that as a result of his unorthodox and inappropriate billing practices in relation to MCILS, the resulting bills contained knowing misstatements regarding the dates and times that he performed services for his clients. While he acknowledges that his inaccurate record keeping resulted in material misrepresentations of facts to MCILS, Attorney Fethke believes that his bills nonetheless accurately reflected the actual number of hours that he spent on the specific cases to which he was assigned, and that his misrepresentations did not result in overbilling of MCILS.

The complainant and the Board agree that while the evidence does establish that Attorney Fethke's billing practices resulted in material misrepresentations of fact to MCILS, the evidence does not establish that those misrepresentations were the result of deliberate or intentional attempts on the part of Attorney Fethke to overbill MCILS for the services he performed for those clients.

The Complainant and the Board agree that there is no evidence that the services for which Attorney Fethke billed were not in fact provided, or that Attorney Fethke's representation of his clients through MCILS was substandard.

Attorney Fethke has testified that his attempts to run a high volume practice with minimal staff resulted in his being overwhelmed by attempting to balance the administrative tasks inherent in such a practice with the professional obligations of meeting his clients' legal needs and providing high quality representation. He further testified that the filing of this complaint, and the issues raised within it, have caused him to dramatically re-think his approach to his practice and to re-evaluate his work-life balance. In particular, Attorney Fethke testified that he has revised his entire office operation. He has hired additional staff, arranged for more full time staff coverage, and adjusted his work load such that the administrative requirements inherent in his practice are met.

Attorney Fethke further testified that he has consulted with other attorneys in similar practices, reviewed materials available with regard to law office practice, taken practice-related CLE, and worked to recognize office practices and procedures that will streamline his billing and insure its accuracy. Attorney Fethke testified that he sets aside time at the end of each day to make sure that all of his time is recorded. In the event that he is out of town and unable to record his time, he makes entries via computer and then makes sure that those entries are appropriately inputted the following day prior to beginning any further work. Attorney Fethke testified that he has his office staff check on his billing so that he is accountable not only to himself and his billing software, but also to a personal check by his staff. Attorney Fethke clarified that although his staff checked his billing on a daily basis following the filing of the grievance complaint, that practice is now performed monthly.

Mr. Fethke completed all of his pending cases with MCILS, and his billings after this matter arose were accepted and were paid by MCILS. MCILS has not discovered any further difficulties with regard to Mr. Fethke's billing in the completion of his existing cases, or in subsequent appointments by the court as counsel for indigent clients with the permission of MCILS. In those matters, his billings have been reviewed and no further issues have been noted by MCILS.

Mr. Fethke expressed his deep remorse and embarrassment as a result of the conduct giving rise to the complaint. He apologized to MCILS and to the Court for the difficulties, confusion and time expended by others as a result of his mistakes.

His practice will be monitored for one year. (Mike Frisch)

March 13, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Disbarred Lawyer Impersonates "Client" And Goes To Prison For Identity Theft

Sometimes a disbarred attorney recognizes the errors that led to the imposition of the ultimate sanction. 

In most jurisdictions, reinstatement may be granted where the petitioning attorney demonstrates reformation of character and/or competence such that a second chance at practice is deemed in the public interest.

Sometimes not.

In the "likely not" category is a former attorney who used her supposed law license to ratchet up the volume from disbarment to the penitentiary.

Last week the United States Court of Appeals for the Fourth Circuit affirmed her conviction for a fraudulent scheme to steal the assets of her "client" through identity theft and impersonating the Internal Revenue Service.

Christal Millner suffered a severe stroke leaving her unable to walk, talk, or drive for the remainder of her life. Pamela Hiler, Millner’s cousin, took responsibility for Millner’s care. In March 2010, hospital staff advised Hiler to seek guardianship of Millner in order to make health care and other decisions on Millner’s behalf. Hiler, a counselor, reached out to [defendant] White for assistance. White and Hiler had attended the same church for many years and Hiler recalled that White was an attorney.

Unfortunately (to put it mildly) Ms. Hiler did not check readily available sources for the status of disciplinary proceedings against White. 

White had been suspended in the District of Columbia since 2009.

Almost immediately after Hiler retained White, White began a scheme to defraud Hiler and Millner. In April 2010, White impersonated Millner to apply for a duplicate license in Millner’s name at a Maryland Motor Vehicle Administration (“MVA”) location. White used Millner’s birth certificate and forged Millner’s signature on the application. Because White did not look like the prior photographs of Millner in the MVA database, the MVA confiscated the license. Undeterred, White obtained a counterfeit university identification with White’s picture and Millner’s name.

In June 2010, White created a Maryland entity called Intel Realty Financial Services (“IRFS”). White opened a bank account for IRFS at Wachovia Bank, listing Millner as IRFS’s CEO, owner, and president. The registered address of the bank account was a P.O. Box that White had previously opened. Using the fake university identification and Millner’s vehicle registration, White then rented another P.O. Box in Millner’s name from UPS. White authorized Millner and IRFS to receive mail from the UPS box.

Shortly thereafter, Millner received the first of many tax deficiency notices. Because Millner was bedridden in a medical facility, Hiler routinely went to Millner’s condo to retrieve the mail. In June 2010, Hiler opened a letter addressed to Millner and Millner’s mother purportedly from the “IRS, Department of Treasury, Internal Revenue Service.” J.A. 1163. The letter referred to an “Offer Compromised Agreement” between Millner and the IRS and requested remittance of $158,500 to IRFS. J.A. 1165. It warned that the office would “file an immediate lien on any and all of” Millner’s assets unless the agency received “full and complete payment” by June 19, 2010. J.A. 1165. Hiler asked White, her attorney, to call the number on the notice to ascertain whether it was legitimate and to confirm that Millner actually owed the money. After assuring Hiler that she had looked into the matter and Millner did owe the money, White told Hiler to send the checks on Millner’s behalf. Hiler purchased cashier’s checks drawn on Millner’s account and sent them to IRFS. From June 2010 until early 2013, Millner continued to receive similar tax notices and Hiler continued to send IRFS money from Millner’s accounts. Even after Millner died in January 2011, the tax notices continued.

By the end of 2012, the IRFS payments had depleted Millner’s assets. Hiler then received a notice addressed to her stating that she, as Millner’s personal representative, was responsible for paying the taxes. In addition, Hiler received a voicemail from an unidentified caller purporting to be “an official collector for” the IRS and the “State of Maryland Department of Revenue.”1 J.A. 2354. The caller instructed Hiler or her attorney to contact the office that day and left a return number. When Hiler consulted White as to these notices, White confirmed that Hiler was responsible for paying the taxes and advised that she borrow money to do so. Having sent IRFS approximately $800,000 at this point, Hiler became suspicious. She consulted another attorney, Craig Ellis, who told Hiler that the notices were “absolutely crazy” because an estate representative generally is not liable for the debts of the estate. J.A. 1360. Ellis, now also suspicious, did a quick internet search of White. He found out that, unbeknown to Hiler, White had been disbarred in Washington, D.C. and Maryland since 2011 and was not currently licensed to practice law.

White was released on bond on the ensuing criminal charges but

On October 14, 2014, the government filed a motion seeking White’s pretrial detention, alleging that White violated the terms of her pretrial release by defrauding another victim and opening another bank account without prior approval. Accordingly, the court ordered White detained pending trial, which began in July 2015.

The court affirmed both the conviction and well-deserved sentence of 108 months. 

White had been prosecuted in two separate matters by District of Columbia Disciplinary {then-Bar) Counsel that resulted in public findings of misconduct and sanctions prior to this criminal fraud. 

She was suspended in November 2009 when the Board on Professional Responsibility recommended a suspension of six months with fitness for a Rule 1.11 revolving door violation.

From the D.C. Bar web page

The D.C. Court of Appeals disbarred White based on two matters that were consolidated. In the first matter, White accepted employment on behalf of a client in a matter on which White had been personally and substantially involved as an employee of the District of Columbia Office of Human Rights. Rules 1.11 and 8.4(d). In the second matter, White submitted fabricated evidence and false testimony in a matter before the Council of the District of Columbia, as well as presented false evidence and made misrepresentations that pervaded her defense in the disciplinary hearing. Rules 3.4(a), 3.4(b), 8.1(a), 8.4(b),

 The January 2011 opinion of the Court of Appeals imposing disbarment is linked here.

The conduct in question is indeed serious: the record reflects that respondent made false accusations to the Council of the District of Columbia, fabricated evidence to support those accusations, and falsely recounted events that never occurred. Moreover, respondent has not presented a substantive defense to these allegations. The two separate cases of misconduct in question here demonstrate that respondent “lacks the moral fitness to remain a member of the legal profession.” Id. at 1200-01. Therefore, disbarment is the proper sanction in this instance in order to protect the public and the courts, to maintain the integrity of the profession, and to serve as a deterrent.

Maryland imposed reciprocal disbarment in September 2011.

Texas followed suit in disbarring her in July 2015 under the name Lucille Parrish.  (Mike Frisch)

March 13, 2017 in Bar Discipline & Process | Permalink | Comments (0)

A Five Year Delay

A Louisiana Hearing Board has recommended disbarment of an attorney for misconduct in settling a client's case without authority and using the proceeds for his own benefit

The evidence presented at hearing of this matter indicates that Respondent intentionally lied to and misled his clients regarding the amount of the settlement. Further, the evidence establishes that Respondent settled his clients' matter without their consent and forged their name on the settlement check and the Release documents. Finally, Respondent settled the matter in April 2008 and dismissed their claim without permission, but did not give the settlement proceeds to his clients until December 2013.

Mr. Ortego testified he and his wife suffered actual harm as the result of Respondent's five year delay in disbursing the settlement proceeds. They lost their family business and went bankrupt...

The Respondent in this matter failed to cooperate with the [Office of Disciplinary Counsel]  and [Louisiana Attorney Disciplinary Board]  in his failing to claim correspondence in this matter, and the ODC had to use its limited resources to have an investigator personally serve Respondent with the Formal Charges after substantial time had passed. Thus, Respondent's actions in failing to cooperate with the ODC and the LADB delayed these proceedings.

The facts of this case indicate that Respondent forged his clients' signatures on the settlement check and release document, then kept their funds for over five years.

Considering the conduct of the Respondent, the ABA Standards and the jurisprudence, together with the aggravating factors disbarment is the appropriate sanction.

KATC.com reported on the attorney 's  recent resignation as a parish prosecutor and the Bar's allegations

According to ODC documents outlining the charges, Fontenot dismissed his clients' lawsuit without their knowledge or consent, in 2008, and forged their signature on the settlement documents. He distributed some of the settlement funds five years later, leading his clients to believe that's when the matter settled —and for a different amount than the insurance company agreed to disburse, according to the charges.

Fontenot also failed to put his contingency fees in writing and cashed checks from his trust account, all in violation of legal and professional conduct, according to the charges.

Both Fontenot's clients and an attorney defending against their lawsuit filed complaints about his actions, according to the document.

According to the document, Fontenot "admits that he acted improperly and explains his behavior by stating at the time of the settlement he was involved in a very bitter, highly contested and protracted divorce from his first wife," the document states. Additionally, Fontenot "concluded that he does not dispute the underlying facts as alleged in the complaint and states that if the matter were tried, he would seek a trial in mitigation."

Fontenot faced the disciplinary board on Wednesday for a hearing on the charges. Evangeline Parish District Attorney Trent Brignac accepted Fontenot’s resignation one day later, he said in a Tuesday interview with KATC.

“I felt it was in the best interest of the District Attorney’s Office and the public to accept his resignation, and that’s what I did,” said Brignac.

This is not the first time Fontenot has faced discipline for misconduct.

In 2011, the state Supreme Court placed Fontenot on two years of probation, with a one-year suspension on the line if the probation was violated.

The 2011 discipline order is linked here. (Mike Frisch)

March 13, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Saturday, March 11, 2017

Gender-Based Slur Draws 90-Day Suspension

The Hawai'i Supreme Court suspended an attorney for a gender-based slur in a courthouse hallway

we conclude by clear and convincing evidence that Respondent Kendal A. Luke violated Rules 3.5(c) and 4.4(a) of the Hawai#i Rules of Professional Conduct (2014) by engaging in conduct toward an unrepresented opposing party in the hallway of Family Court that was highly offensive and included the repetition in a loud voice of a vulgar, gender-based slur. While we concur with the Disciplinary Board’s conclusions regarding Respondent Luke’s conduct, and concur that his conduct warrants a period of suspension, as it was committed knowingly and injured the legal profession and the system of justice of which he is a representative, we conclude a more lengthy period of suspension is warranted.

Therefore, IT IS HEREBY ORDERED that Respondent Luke is suspended from the practice of law in this jurisdiction for 90 days, effective 30 days after the entry date of this order.

He must also take and pass the MPRE. (Mike Frisch)

March 11, 2017 in Bar Discipline & Process | Permalink | Comments (0)

State Bar Proposes Sex With Client Rule In California

The State Bar of California approved an ethics rule that would subject lawyers to discipline for having sex with their clients.

California currently bars attorneys from coercing a client into sex or demanding sex in exchange for legal representation.

But voluntary sex between attorneys and clients is not prohibited as long as it does not cause the lawyers to "perform legal services incompetently."

The new rule would completely ban sex between lawyers and clients with some exceptions.

As of May 2015, 17 states had adopted a blanket sex ban drafted by the American Bar Association, according to an ABA committee that looked at implementation of the group's ban.

Still, California's proposal was divisive.

Supporters said the relationship between a lawyer and client is inherently unequal, so any sexual relationship is potentially coercive. But some attorneys said the blanket ban was an unjustified invasion of privacy.

The bar's Board of Trustees passed the rule Thursday as part of a long-awaited overhaul of attorney conduct standards that revised or crafted 70 ethics rules. The new rules approved Thursday will now go before the California Supreme Court, which has final say over them.

The bar's ethics rules for attorneys were last fully revised in 1987. Lawyers who violate the regulations are subject to discipline ranging from private censure to loss of their legal license.

James Ham, an attorney on a state bar commission that worked on the rules, said it's not a good idea for lawyers to have relationships with clients, but he objected to disciplining attorneys for consensual relationships "where there was no harm."

"The real issue is a philosophical, constitutional one about how intrusive government can be in people's lives," he said.

Daniel Eaton, another member of the commission, said the existing client sex rule wasn't working. He pointed to a lack of disciplinary action against attorneys.

Between September 1992 and January 2010, the state bar investigated 205 complaints of misconduct under the current sex restriction, according to an analysis of data that accompanied the proposal. It imposed discipline in only one case.

"It is important that the California State Bar prohibit as an ethical matter attorneys from exploiting their clients sexually," Eaton said.

He said the only way to accomplish that is with a blanket sex ban that removes uncertainty for attorneys and the challenge of proving exploitation for investigators.

The revisions commission modified the proposal at its meeting in October to create an exception from the sex ban for a lawyer who is representing a spouse or registered domestic partner. It also required the state bar to consider whether a client would be "unduly burdened" by an investigation of sexual misconduct if someone other than the client filed the complaint.

The rule also allows sex between a lawyer and client when the sexual relationship preceded the professional relationship.

Other approved changes would allow the state bar to discipline attorneys for discrimination even without a separate finding of wrongdoing. The current rule requires a final determination of wrongful discrimination in a lawsuit or other proceeding before the state bar can take action.

(Mike Frisch)

March 11, 2017 in Bar Discipline & Process, Current Affairs | Permalink | Comments (0)

Friday, March 10, 2017

Disbarment Too Harsh For Stealing Hair Dye

A lawyer with a prior history of discipline should be suspended for three years, according to the Louisiana Attorney Disciplinary Board.

A review of Respondent’s disciplinary history is pertinent to the Board’s review of this matter. On March 2, 2006, following a misdemeanor trial, Respondent was found guilty of unauthorized access to a public school and resisting arrest. Her sentence was suspended and she was placed on probation. One of the terms of her probation was to not enter any school grounds of the St. Tammany Parish School Board without specific authorization. In 2007, she violated this condition by entering school grounds on three occasions without authorization. Accordingly, her criminal probation was revoked. On July 2, 2010, the Court suspended Respondent for one year and one day, fully deferred, based upon her violation of the terms of her criminal probation. In re LaMartina, 2010-0093 (La. 7/2/10); 38 So.3d 266 (“LaMartina I”). As a condition of the deferred suspension, Respondent was placed on disciplinary probation for two years.

She violated probation and was subject to an active suspension.

Then

The ODC received information that on or about January 28, 2015, at approximately 5:20 p.m., Officers D. Dondeville and S. Winther responded to Rouses Supermarket 32, located at 4350 Highway 22, Mandeville, Louisiana, 70471, in reference to an alleged shoplifting incident. The perpetrator was identified as Elise MB LaMartina, date of birth September 12, 1968. The property taken was hair dye valued at $7.29.

The Board rejected disbarment

Here, Respondent intentionally violated duties to the public and the profession by engaging in criminal behavior. Her misconduct caused actual harm to the store from which she stole merchandise as well as to the legal system and the profession because she violated the very laws she is entrusted to uphold. Additionally, her failure to cooperate with ODC’s investigation caused that office to expend additional resources.

A survey of the sanctions for shoplifting attorneys

Louisiana case law contains little precedent for disciplining attorneys that are guilty of shoplifting, let alone repeated instances of shoplifting. Other states have dealt with shoplifting by imposing sanctions ranging from a public reprimand to suspensions. On the lower extreme, an attorney was given a public reprimand and required to attend psychotherapy for one year in New York in light of his candor with the tribunal, attempt to deal with his “compulsion” problem, and otherwise “unblemished record.” In re Gallagher, No. M-472 (N.Y. 6/7/12); 97 A.D.3d 254, 256-67. In Oregon, an attorney was suspended for six months for a single instance of shoplifting, and the Supreme Court noted that because the case did not involve a violation of fiduciary duty, the sanction should be less for two years. In re Kimmell, No. 92-82 (Or. 8/30/01); 31 P.3d 414, 416, 420-21. The Indiana Supreme Court approved a one year suspension consented to by the parties for one instance of shoplifting. In re Cheslek, No. 64S00-9909-DI- 503 (Ind. 2/15/01); 701 N.E.2d 1244, 1245...

Taking the unique circumstances of this matter into consideration, in light of the Standards and case law discussed above, the Board finds that a three-year suspension is the appropriate sanction. The Board recognizes that disbarment is the baseline pursuant to ABA Standards 5.11 and 8.1. However, the Board is also cognizant of the Court’s practice of looking beyond the title of a criminal offense to the facts underlying the conviction when determining the appropriate sanction. See In re Kirchberg, 2003-0957 (La. 9/26/03); 856 So.2d 1162. Here, Respondent pled guilty to shoplifting hair dye worth $7.29. The Board does not feel such an offense should result in disbarment. Rather, the Board agrees with the out-of-state case law that a lengthy period of suspension is warranted.

The earlier disciplinary order is linked here. (Mike Frisch)

March 10, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Unethical Agreement Enforceable Against Attorney In D.C.

A memorandum opinion issued by Judge John Bates of the United States District Court for the District of Columbia denies a defendant attorney's motion to dismiss and addresses an unresolved issue of D.C. law with respect to fee-sharing agreements with non-attorneys

Allan Gerson, the defendant and an attorney, contracted with Zvi Shtauber, the plaintiff, for Shtauber to provide services to assist Gerson in a lawsuit. Their contract specified a fee-sharing arrangement, where Gerson would share with Shtauber a portion of any contingency fee he earned from the lawsuit. Shtauber alleges that Gerson failed to pay, and now sues for enforcement of that contract, or alternatively for recovery in quantum meruit, and for a declaratory judgment that he is entitled to a portion of Gerson’s fees in the future. Gerson moves to dismiss, arguing that the contract is unenforceable as contrary to public policy because a fee-sharing contract between a lawyer and a non lawyer violates the D.C. Rules of Professional Conduct, and that Shtauber cannot pursue a claim for quantum meruit when there is a contract between the parties. The Court will deny Gerson’s motion.

The court notes that many facts were not in dispute

In 2004, Gerson explored the possibility of suing Arab Bank and other financial institutions “on behalf of victims of genocide and terrorism in Israel and in territories administered by the Palestinian Authority.” Id. Gerson hired Shtauber to assist in the lawsuit. Id. ¶ 6. Shtauber, a resident of Israel, has experience in relevant fields of national security and has served as both the Foreign Policy Advisor to the Israeli Prime Minister and as Israel’s Ambassador to the United Kingdom. Id. Shtauber connected Gerson to an Israeli attorney, David Mena, to help litigate the case against Arab Bank, and provided additional “consulting services” in connection with Gerson’s suit. Id. ¶ 7. 

As to fee sharing

Gerson argues that the fee sharing arrangement is forbidden by the D.C. Rules of Professional Conduct (“Rules”) in effect at the time, and therefore is unenforceable as against public policy. Shtauber responds that the Agreement is not contrary to the Rules, but even if it is, it’s still enforceable.

The Agreement was signed in 2005. At the time, Rule 5.4(a) of the D.C. Rules of Professional Conduct stated: “A lawyer or law firm shall not share legal fees with a nonlawyer” and then provided four exceptions.  See also D.C. Code § 11-2501 (attorneys admitted to the D.C. bar are subject to the Rules). The first two exceptions concern payments to an attorney’s estate after death. The third exception states a “lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit sharing arrangement.” Rule 5.4(a)(3). The fourth states that fee sharing “is permitted in a partnership or other form of organization” that meets specified requirements, as laid out in Rule 5.4(b), for a nonlawyer to exercise managerial authority over the firm or have a financial interest in the firm. Id. 5.4(a)(4)...

Rule 5.4(a) clearly prohibits the fee sharing arrangement described here. The Agreement between Shtauber and Gerson states that “Dr. Shtauber’s fees under this Agreement shall be 20% of any and all contingent legal fees” due to the Gerson Group for claimants referred to them by Mena. Agreement ¶ 4. In addition to this arrangement being forbidden by the plain language of Rule 5.4(a), the D.C. Bar has issued an ethics opinion explicitly stating that “[a] payment by a lawyer to another person for the referral of legal business, which is contingent on the lawyer’s receipt of fees from the referred legal business and is tied to the amount of those fees” constitutes fee sharing that is prohibited by Rule 5.4(a). See D.C. Legal Ethics Op. 286 (1998). This does not describe the exact situation here: Shtauber is not being paid directly for referring clients, rather he is being paid a contingent fee with respect to clients referred to Gerson by another attorney, Mena. Nonetheless, Shtauber is being paid “for the referral of legal business” (through an intermediary) that is “contingent on [Gerson’s] receipt of fees from the referred legal business and is tied to the amount of those fees.” Thus the Agreement is likely covered by Ethics Opinion 286, in addition to being forbidden by the plain language Rule 5.4(a).

But the agreement is enforceable

This case raises an open question of District of Columbia law. In light of existing D.C. Court of Appeals precedent, this Court believes that although the Agreement violates the D.C. Rules of Professional Conduct, it is nonetheless enforceable in this particular instance. Moreover Shtauber may seek recovery in quantum meruit as an alternative to damages on the contract. 

The Bar ethics opinion cited is linked here. (Mike Frisch)

March 10, 2017 in Bar Discipline & Process, Billable Hours, Current Affairs | Permalink | Comments (0)

Terse Explanation For Rejecting Proposed Disbarment

The New Jersey Supreme Court has rejected the conclusion of its Disciplinary Review Board that an attorney engaged in knowing misappropriation, thus foregoing the otherwise obligatory disbarment in favor of a three-year suspension.

The court's order concludes (but explains in the most summary fashion) that the death of the client in one matter prior to the ethics charges defeated one charge and that its review of the record established only negligent misappropriation.

There is an overlay of father-son tension in that the attorney worked for his difficult, controlling father who handled the firm's finances.

The attorney inherited the escrow account when father William died. 

From the DRB report

As to the first instance of knowing misappropriation, the facts are not in dispute. Respondent admitted issuing the seven checks to himself and/or the Firm and using the funds for business expenses. He also agreed that the outstanding checks he "replaced" represented funds owed to clients and/or third parties. He claims, however, that when he issued the replacement checks, he was not aware that he was invading client funds at that time. Instead, he asserted that he issued the checks based on a "sticky note" William left for him prior to his death. Respondent claimed that, based on his knowledge of the clients’ matters handled by the Firm, he believed that they owed the Firm legal fees. He undertook no investigation or inquiry to confirm that belief.

As the special master so carefully analyzed and determined, respondent’s explanation of blind reliance on a "sticky note" is not credible. He reasoned that, based on William’s controlling nature and his use of dictation, it was improbable that he would have given respondent such direction in this manner. Further, the special master found that if the "sticky note" actually existed and respondent truly believed fees were owed to the Firm, he would have disbursed those funds at once and not as needed over time. Respondent never told the OAE about the "sticky note" because, as the special master found, it did not exist.

The special master further found incredible respondent,s claim of complete ignorance in respect of management of the financial aspects of the Firm. He noted that respondent actively participated in the 2007 audit and never exhibited to the OAE an inability to understand the requirements of handling a trust account.

The special master also unequivocally found that respondent knew the checks were outstanding but made no attempt to review the client ledger cards or otherwise investigate the status of the funds before issuing the "replacement" checks to himself or to the Firm. It was not logical, he found, that those funds represented fees owed because the Firm took its fees promptly. Moreover, respondent provided no bills or documentation to establish that these amounts, indeed, were owed to the Firm.

The DRB found a second instance of misappropriation - the one where the client had died that the court seems to reject out of hand. 

When I first got involved in attorney discipline in 1984, New Jersey was the leader in effectively sanctioning lawyer misconduct.

What happened?

Update: A thoughtful email from a reader does merit a clarification of this post. New Jersey has both a strict presumption of disbarment for intentional misappropriation and permanent disbarment.

That does lead to some hard cases like this one and makes the result reached here more understandable.  (Mike Frisch)

March 10, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Iowa Supreme Court Finds Sufficient "Remedial Measures" In The Face of Unknowing Submission Of Forged Documents

The Iowa Supreme Court ordered a suspension of no less than 60 days despite overturning the most serious misconduct findings against the attorney.

The [grievance] commission found Crotty violated several ethical rules while representing the administrator of the estate when he failed to disclose to the court that certain documents filed with the court in the probate proceeding bore forged signatures and by charging and receiving excessive and unauthorized attorney fees. The commission found Crotty violated ethical rules in the worker’s compensation matter by practicing law after his license had been suspended for failing to comply with continuing legal education requirements. The commission recommended Crotty’s license to practice law in Iowa be suspended for at least three months and that as a condition of any reinstatement he be required to show completion of at least eight hours of continuing legal education on probate law.

The underlying matter involved a lien against property granted to the client's stepmother in her divorce from the client's father. The lien was not satisfied when the property sold.

The attorney looked to the estate to satisfy the claim under a contingent fee arrangement.

[Client] Leonard told Crotty that two of his siblings—Richard Jr. and Ronald—were not supportive of the estate’s claim against Nancy and wanted nothing to do with it. Relying on Leonard’s representation, Crotty prepared renunciation documents for signature by Richard Jr. and Ronald and gave the documents to Leonard on September 19. Leonard left Crotty’s office with the documents and brought them back bearing signatures later the same day. Crotty’s secretary thought it unusual that Leonard could have secured his brothers’ signatures in less than an hour. Yet when Crotty asked Leonard directly about the authenticity of the signatures, Leonard attested that his brothers had signed the renunciations. Relying on Leonard’s affirmation of the authenticity of his brothers’ signatures, Crotty filed the renunciations with the court.

[Stepmother] Nancy responded quickly through counsel to Crotty’s demand letter and agreed to pay the sum of $34,600 in exchange for satisfaction of the judgment lien. On September 24, Crotty presented Leonard’s application to a district court judge for approval of the estate’s settlement of the claim against Nancy and Crotty’s claim for attorney fees. The application briefly described the factual and legal bases for the estate’s claim against Nancy and requested the court’s approval of a settlement in the amount of $34,600 and Crotty’s attorney fee. Notably, the application did not disclose to the court the gross amount of the attorney fee claimed by Crotty in connection with the proposed settlement or a formula for its computation; nor did the application itemize the amount of time spent or the work performed by Crotty in achieving the settlement for the estate. The district court signed an order prepared and presented by Crotty, finding the settlement was “reasonable and in the best interests of the estate,” and further finding “[Crotty’s] fees hereunder are fair and reasonable and were necessary.”

Crotty prepared and Leonard signed a release which was provided to Nancy in consideration for her payment of $34,600 to the estate. Crotty retained the sum of $11,533.33 from the settlement proceeds as his fee. He distributed the remainder of the proceeds to Leonard for distribution to the heirs.

But

Leonard made uneven initial distributions of the net settlement proceeds to his brothers: $9033.33 to Michael, $1500 to Richard Jr., and $1500 to Ronald. Richard Jr. and Ronald found it peculiar that the distributions to them were in cash and decided to investigate the terms of the settlement. In the course of their investigation, Richard Jr. and Ronald revealed to Crotty that they had not signed the renunciations. Upon learning this, Crotty sent a letter to Leonard on October 23 revealing Crotty’s discovery of the fact that the signatures on the renunciations were forged and demanding that he return the settlement proceeds.

Although the record does not disclose the substance of Leonard’s response to Crotty’s letter of October 23, Crotty concedes that, when confronted, Leonard admitted he forged his brothers’ signatures on the renunciations. Armed with Leonard’s admission of the forgeries, Crotty prepared and Leonard signed an application for the appointment of a successor administrator. The application filed on November 14 alleged that Leonard’s actions as administrator had “resulted in less than amicable relationships with the remaining heirs” and that the best interests of the estate would be served by the appointment of his brother, Ronald, as administrator.

The application for appointment of a successor did not inform the court that the signatures on the two renunciations previously filed in the case were forged, nor did it reveal that Leonard had made uneven distributions of the settlement proceeds to the heirs. However, Crotty testified that he revealed the forgeries in conversations with two district court judges before the order appointing Ronald as the successor administrator was issued on November 14. Both of those judges testified before the grievance commission. One of them did not recall having such a conversation with Crotty; the other judge—the one who signed the order appointing Ronald as successor administrator—recalled having a conversation with Crotty about the fact that the renunciations bore forged signatures but did not recall discussing other measures Crotty might or should take to memorialize the forgeries in the court file. 

The court rejected some of the charges

We conclude the Board failed to prove Crotty either counseled Leonard to forge the signatures of his brothers or knowingly assisted him in perpetrating a fraud on the court. We credit Crotty’s testimony that he was unaware of the forgeries when he filed the renunciations with the court. We also are convinced that Crotty verbally revealed the forgeries to the court when he presented the application and order for appointment of a successor administrator. Although we believe it would have been a better practice to further disclose the forgeries in a motion to withdraw the renunciations filed in the probate proceeding, we find the Board failed to meet its burden to prove a violation of rule 32:1.2(d).

And the measures taken after learning of the forgeries satisfied the "reasonable remedial measure" obligation

Although, as we have already noted, it would have been better if Crotty had disclosed the forgeries in a writing filed with the court or specifically sought direction from the court as to any additional measures he should take under the circumstances, we cannot say on this record that his verbal disclosure of the forgeries to the court was an unreasonable measure under the circumstances presented here. Accordingly, we find no violation of rule 32:3.3(a)(3)...

Although he could have taken more aggressive remedial measures, we find Crotty’s failure to do so was not motivated by a purpose to deceive or defraud the court or the decedent’s heirs, nor was it the result of an intentional misrepresentation. Crotty explained that he chose to disclose the forgeries in a conversation with the court rather than in a motion or application because he was fearful of Leonard’s reaction. While this explanation might support a finding that Crotty was lacking in courage to face a client’s wrath if the forgery were revealed to the court in writing, we are not persuaded that the Board proved Crotty’s conduct in this context was of a type prohibited under rule 32:8.4(c).

He did violate rules governing fees and practiced after suspension in an unrelated matter.

Sanction

In 1980, Crotty was found in contempt and fined $500 for practicing law in Iowa while holding a certificate exempting him from continuing education requirements. Second, Crotty was an experienced lawyer on the verge of retirement at the time he committed the violations discussed above. We view his substantial experience in the practice of law as an aggravating factor. Id.

We find one mitigating factor in this case as well. Crotty forthrightly admitted that he performed legal services for Freeman after his license was suspended. We consider his recognition of some wrongdoing as a mitigating circumstance affecting our determination of the appropriate sanction.

After consideration of the record, relevant precedent, and aggravating and mitigating factors, we conclude a suspension of sixty days is appropriate. We conclude Crotty’s misconduct in taking unauthorized fees in the Cleaver estate is similar to the conduct in Evans and Arzberger in which suspensions of thirty days were imposed. A slightly longer suspension of sixty days is warranted in this case, however. Crotty continued to perform legal services in the Freeman matter for several days after his license was suspended and this is the second time he engaged in the practice of law in Iowa when he was not authorized to do so. Additionally, we find troubling Crotty’s use of an improper small-claims action to coerce a client into paying a fee that Crotty knew was not due and could only be obtained through the auspices of the probate court.

(Mike Frisch)

March 10, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Thursday, March 9, 2017

Grave Misconduct

An interlocutory suspension has been ordered by the Tribunal Hearing Division of the Law Society of Upper Canada of an attorney facing criminal charges

Mr. Houlahan (“the Lawyer”) was charged criminally with three counts of fraud or theft over $5,000 and one count of possession of proceeds of crime over $5,000. The allegations arise from his activities between 2003 and 2011 as a member of the committee that managed the operations of St. Patrick’s Parish Cemetery. It is alleged that the Lawyer failed to properly account for $365,870 of funds belonging to the Cemetery. He has pleaded not guilty to the charges.

The Lawyer actively opposed the Law Society motion but filed no material in his defence. He attended the hearing by telephone. The Law Society satisfied us that the criminal charges, supporting documentation and surrounding circumstances constitute reasonable grounds for believing there is a significant risk of harm to the public or the public interest in the administration of justice if an interlocutory suspension was not ordered.

The attorney was called to the Bar in 1969 and had served as judge.

Here, he was chair of a cemetery committee and is alleged to have engaged in criminal conduct in handling funds.

A forensic audit was performed

The Forensic Audit contains the following evidence:

a)            From 2003 to 2011, the Lawyer was Chair of the Cemetery Committee.

b)            The Lawyer was responsible for selling graves and for overseeing the legal, administrative and financial matters of the Cemetery.

c)            The Lawyer and another Committee member had signing authority over Cemetery bank accounts but the Lawyer was alone responsible for authorizing and processing expense payments.

d)            The Committee was required to provide annual financial audits to the Archdiocese but did not do so between 2003 and 2011.

e)            The Committee made all financial decisions with no oversight. There was no reporting to the Archdiocese and only limited information was provided to the parish priest between 2003 and 2009.

f)            The members of the Committee were volunteers.

g)            The revenue of the Cemetery came from four sources: sale of internment rights for plots and columbarium niches; burial and related supplies and services; investment income; and donations...

The total of the unauthorized payments to the Lawyer and non-Committee members is $311,146.

In addition the Lawyer disbursed $44,600 to fellow Committee members plus a shed worth $3,500 to one of the members.

During the Lawyer’s tenure as Chair of the Committee, an additional $76,291 of sale proceeds and burial fees went missing, $4,654 of which the Lawyer reimbursed.

The financial shortcomings were discovered in 2011 after the new parish priest became aware of the reporting deficiencies.

As to suspension pending further proceedings

We are not satisfied that the Lawyer’s proposal to finish current client files by the end of May 2017 combined with his agreement not to take on any new files are sufficient to reduce the risk of harm to the public interest in the administration of justice. The charges against the Lawyer allege serious breaches of the public trust. There is compelling evidence, unchallenged at this stage, that he has misappropriated funds from the charity he served as a volunteer. Although he has pleaded not guilty before the courts, his failure to provide us with any evidence that would contextualize or possibly explain even some of his behaviour is telling.

We agree with the Law Society that there are reasonable grounds to believe there is a significant risk of harm to the public interest in the integrity of the legal profession and administration of justice if an interlocutory order suspending the Lawyer’s licence to practise is not made.

We allowed the Lawyer two weeks to complete the transfer of his remaining files and close his practice. There is no evidence of imminent danger to the public that requires an immediate suspension. The allegations against the Lawyer have not yet been proven and involve one volunteer position, albeit a long-standing one. There have been no allegations challenging his integrity otherwise. He has continued to practise without other complaints or incidents since 2012. The two weeks will also allow his clients an opportunity to obtain new counsel and for an orderly file transfer.

The Ottawa Sun reported on a plea in the criminal case.

A former small claims court deputy judge pleaded guilty Thursday to stealing a quarter of a million dollars from the Catholic church, admitting he used the money pilfered from the St. Patrick’s Church cemetery to pay his own personal bills.

Ottawa lawyer Ronald Houlahan was the chair of the St. Patrick’s Church Fallowfield cemetery committee when he wrote cheques from the cemetery account to pay off his own expenses, such as bills for his law office phone, secretarial services, insurance, cellular phone, cable TV and personal credit cards, an Ottawa court heard.

Is this a mortal or venial sin?

Mortal sins are ones that involve grave matters.

The question will not be resolved by either the criminal or disciplinary process. (Mike Frisch)

March 9, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Too Late To Complain

The District of Columbia Court of Appeals has held that an attorney's failure to preserve her objections to discipline waived the claims

In a three-page brief in this court, Ms. Hargrove contends that (1) the Board inappropriately entered a default judgment against her under D.C. Bar R. XI, § 8 (f), because Disciplinary Counsel did not provide clear and convincing evidence that she violated the Rules of Professional Conduct listed in the specification of charges; (2) she did not violate the Rules of Professional Conduct; and (3) there were procedural errors during the disciplinary process. Disciplinary Counsel responds that Ms. Hargrove is precluded from raising these contentions in this court and that in any event the contentions lack merit.

We agree with Disciplinary Counsel that Ms. Hargrove’s contentions have been forfeited. Ms. Hargrove had numerous opportunities to challenge the allegations against her and to object to any procedural errors, but she failed to properly do so. First, Ms. Hargrove did not timely file an answer to the specification of charges. After missing earlier deadlines, Ms. Hargrove belatedly moved to late-file two answers, citing only the "press of business" as a reason for her tardiness. Pursuant to D.C. Bar Rule XI, § 8 (f), the Hearing Committee entered an order of default, concluding that Ms. Hargrove had not demonstrated that her failure to timely file an answer was due to excusable neglect. The Hearing Committee therefore treated the allegations against Ms. Hargrove as admitted, subject to Disciplinary Counsel’s obligation to provide clear and convincing evidence of the violations. Second, Ms. Hargrove did not appear either at a pre-hearing conference or at the hearing before the Hearing Committee. Third, after the Hearing Committee issued its Report and Recommendation, Ms. Hargrove had the opportunity to move to vacate the order of default, Board R. 7.8 (g), or to file notice of exceptions to the Hearing Committee’s findings and recommendations, Board R. 13.3. She did neither.

 The court imposed a 60-day suspension.

If this decision signals an increasing willingness of the D.C. disciplinary system to enforce the consequences of default, it is a most welcome and positive trend. (Mike Frisch)

March 9, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Additional Sanction For Practice After Suspension

A one-year suspension has been ordered by the New York Appellate Division for the Second Judicial Department for misconduct after an earlier suspension

Prior to her suspension, the respondent represented Prime Aid Pharmacies (hereinafter Prime Aid) as in-house counsel. Subsequent to her suspension, on or about June 14, 2013, on Prime Aid stationery, the respondent sent a letter to Thomas Faloon, of Pharmacy BenefitDirect, a pharmacy benefit management company, in which she stated that she was "general counsel" for Prime Aid, and affixed her signature above the typed words "Yana Shtindler, Esq."

On or about September 3, 2013, on Prime Aid stationery, the respondent sent another letter to Mr. Faloon, in which she again stated that she was "general counsel" for Prime Aid, advised him that something he wrote in a letter was "illegal," and affixed her signature above the typed words "Yana Shtindler, Esq." On or about September 3, 2013, the respondent sent an e-mail to Mr. Faloon, in which she again stated she was "general counsel" for Prime Aid, and advised that he had illegally disclosed confidential information to a third party.

There were also false statements to the Grievance Committee

 In September 2013, the respondent received from the Grievance Committee a complaint from Kristin K. C. Howard, General Counsel and Director of Compliance at Pharmacy BenefitDirect, alleging, inter alia, that, in correspondence dated June 14, 2013, and September 3, 2013, the respondent had represented herself as an attorney to Mr. Faloon, although she was suspended from the practice of law. In her answer to the complaint, the respondent stated, inter alia, "I was advised by my attorney . . . that suspension went into effect on July 15, 2013." At an examination under oath on March 17, 2015, the respondent admitted that the aforementioned statement in her answer was "false," in that she had received the suspension order from her attorney on April 24, 2013, and that her attorney had advised her over the phone that the effective date of her suspension was May 17, 2013. At her examination under oath, the respondent also admitted that, at the time she sent her June 14, 2013, letter to Mr. Faloon, she knew that she was under suspension.

As to sanction

At the hearing, the respondent candidly admitted the charges, acknowledging that she was aware of her suspension when she held herself out as "general counsel" to Prime Aid, and acknowledged that it was wrong for her to have done so. In mitigation, she explained that Prime Aid was a specialty pharmacy, created and owned by her husband, that is run on a business model that assists patients in obtaining access to high-cost medications. Prime Aid's success caused friction with Pharmacy BenefitDirect, a pharmacy benefit manager, an entity that works for insurance companies. A pharmacy benefit manager's goal is to reduce the number of approved prescriptions by denying approval and/or withholding payment, which saves the insurance company money, but runs counter to the interest of the patient. Toward the end of 2012, Pharmacy BenefitDirect started to audit Prime Aid. Mr. Faloon was an auditor for Pharmacy BenefitDirect. If, during an audit, too many errors are found, a pharmacy will be terminated from the network. Ultimately, the audit was resolved in Prime Aid's favor, but in June 2013, the audit was still ongoing.

In June 2013, the respondent was running the day-to-day operations of the pharmacy. The letter in question, addressed to Mr. Faloon, in which the respondent represented herself as "general counsel," was correspondence exchanged in the course of the audit. The respondent testified that she held herself out in such a fashion out of anger and pride, and did not want to be disadvantaged in her dealings with Mr. Faloon.

With respect to sanctions, the respondent asks that the Court take into consideration the following factors: her candor in acknowledging the misconduct; her remorse; her serious health issues that required her to undergo multiple surgeries; her passion for helping Prime Aid's patients who are afflicted with serious medical problems like her own; the fact that the underlying misconduct was limited to misrepresenting her attorney status during an audit of a family business; and her generally excellent reputation for honesty and integrity in her professional dealings, as expressed in letters written by counsel who have since been retained to represent Prime Aid in its legal affairs, which were submitted at the hearing.

Here, we note that the respondent held herself out as an attorney in a single transaction, which she had been handling on behalf of a family business, and was not attempting to earn additional legal fees by completing a legal matter commenced prior to her suspension, or taking on a new matter. Considering this circumstance, as well as the factors cited by the respondent and the fact that she has been continuously suspended from the practice of law since May 17, 2013, we find that a one-year suspension, nunc pro tunc to May 18, 2014, is warranted.

(Mike Frisch)

March 9, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Wednesday, March 8, 2017

A "Disturbingly Despotic Display Of Judicial Authority"

Consent discipline of a reprimand and probation for up to two years was approved by the Arizona Presiding Disciplinary Judge for an excess of criminal defense zeal

Mr. Zuniga has been licensed to practice law in Arizona since October 7, 1978 and has been certified as a criminal law specialist for over 20 years. He entered his appearance for his client, who was a criminal defendant booked into jail on drug offenses. When a judicial officer did not release his client, Mr. Zuniga filed multiple changes of judge for cause and other pleadings. Mr. Zuniga stated the judicial officer had “intellectual arrogance” and accused the judicial officer of wanting “to undermine a defendant’s rights under the rules,” and that the judicial officer “attempted to intimidate counsel into silence.” He asserted the judicial officer had “a disturbingly despotic display of judicial authority” and that he had acted “viciously,” and was “craven.” 

After his client was indicted these allegations were followed by additional pleadings alleging the judicial officer had “deliberate ignorance and disregard of the law” and intentionally ignored relevant law. He expanded his vitriolic attack stating the judge likely “repeatedly violated the right [of] hundreds of others defendants [sic] who have been in defendant’s place.” He stated the judge had a “smug arrogance” and a despotic demeanor” and repeated his claim the judge had violated the due process “to many other defendants who have come before it.” He claimed the judicial officer intended to “warehouse defendants.” Mr. Zuniga then filed a 19 page demand that the judge recuse himself from any future case in which Mr. Zuniga appeared.

In the agreement, Mr. Zuniga concedes that he was overly “aggressive” in representing his client and that his motions were “not well-advised.”

The agreement concludes that the presumptive sanction is suspension but

The agreement for a reduction includes statements of fellow lawyers arguing for leniency. One argues this series of lengthy pleadings were merely “heat of the moment” another that the language was “potentially inappropriate.” The conduct is far more than that. The solidary issue in the criminal case was whether his client should have been released pre-indictment. The vitriol was non-stop, lengthy and of no service to his client. If there were but one pleadings, perhaps it might be reasonable to surmise there was a “heat of the moment” event. The allegations were more than potentially inappropriate, they were with a reckless disregard of the truth. Multiple pleadings were sent to the judge over the course of more than a month.

The United States Supreme Court has stated, “[t]he license granted by the court requires members of the bar to conduct themselves in a manner compatible with the role of courts in the administration of justice.” In re Snyder, 472 U.S. 634 (1985). There was no rational basis for the scornful conclusions of Mr. Zuniga. The two sentences he sent to the judicial officer he impugned comprise the entire letter of apology he sent to the presiding judge that oversaw the motions for removal of the judicial officer. They do not equate with the extreme remorse referred to in the agreement. The health records offered offer greater mitigation, but little causal insight for such an apparently untypical course of conduct for a practitioner of 39 years. His full and free disclosure in this proceeding and his otherwise excellent character over the years warrants mitigation,

(Mike Frisch)

March 8, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Leaving Arizona: A Failed Conditional Admission

The Arizona Presiding Disciplinary Judge disbarred an attorney who had originally been conditionally admitted to practice. 

There was a default

Bar Counsel avowed additional efforts were made to contact Ms. O’Quinn beyond those required under rule. Those efforts were outlined and included a bar representative going to her residential property, but she had already left her apartment. It had been abandoned and 111 client files were found at her apartment and in a dumpster. The bank was contacted where her trust account was held, but there was no forwarding address left by Ms. O’Quinn. There was $29.00 in trust in her IOLTA account. Her law office had been rented space but was long abandoned. There was no forwarding address or other information as she was evicted from her office.

Ms. O’Quinn’s prior disciplinary history is long. Exhibits 22-49 sets forth her history. She was a conditional admittee with alcohol issues.

The prior record involved three informal reprimands and a suspension for six months and a day

The present case involved misconduct in three client matters and failure to cooperate.

Disbarment is generally appropriate when a lawyer knowingly engages in conduct that violates a duty owed as a professional intending to obtain a benefit for the lawyer or another, and causes serious or potentially serious injury to a client, the public, or the legal system.

We find Ms. O’Quinn has left the State of Arizona and failed to substantively respond to the SBA’s investigation. Ms. O’Quinn’s actions were taken intending to obtain a personal benefit and benefitted her to the detriment of her clients. Standard 7.1, Disbarment, therefore applies.

(Mike Frisch)

March 8, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, March 7, 2017

Sex And Undisclosed Asset Get Bankruptcy Attorney Suspended

The Florida Bar recently posted summaries of a number of sanctions recently imposed on attorneys

One summary

Robert Steven Cohen, 3049 Cleveland Ave., Suite 259, Fort Myers, suspended for 30 days, effective 30 days from a Jan. 19 court order. (Admitted to practice: 1986) Cohen engaged in a sexual relationship with a client he represented in a bankruptcy case. When a trustee found that the client withheld certain information in the case, Cohen withdrew representation and the client was forced to hire a new attorney. (Case No. SC16-2251)

The orders posted on the web page of the Florida Bar reveal that the bankruptcy was filed in September 2010 and discharge granted in January 2012.

The discharge was revoked after an adversary proceeding was initiated over an undisclosed asset.

The discipline was imposed by consent. (Mike Frisch)

March 7, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Unindicted Co-Conspirator Attorney Disbarred

Reciprocal disbarment was imposed by the New York Appellate Division for the Second Judicial Department who had consented to disbarment in New Jersey.

The court summarized the New Jersey allegations

Count one charged the respondent with violations of rules 8.4(b), 8.4(c), and 1.15(a) of the RPC in connection with his role in a massive fraud known as an "advanced fee fraud" perpetrated by the Harbor Funding Group (hereinafter HFG). In essence, the respondent facilitated the fraudulent transfer and theft of millions of dollars in escrow funds. HFG was a corporate entity that was purportedly in the business of providing funding for real estate transactions. HFG was not a legitimate business operation and was prosecuted by the United States Attorney for the Eastern District of New York. The principal coconspirators were William C. Lange, Joseph Pascua, Brad Russel, Frank Perkins, and Kristofer J. Lange. The respondent was identified as an unindicted coconspirator in the government's filings. In exchange for his cooperation, the respondent was not criminally prosecuted. HFG and its principal coconspirators represented to individuals involved with real estate developers primarily in a region known as the Gulf Opportunity Zone (a region impacted by Hurricane Katrina) that HFG could fund real estate development if the prospective parties provided a 10% advanced fee or deposit. HFG, in fact, had no access to real estate financing. The only fund available to HFG was the 10% advance fee made by numerous real estate investors and parties. HFG and the investors agreed that the fee would be placed in escrow to be held by an attorney. The respondent agreed to be an escrow agent on behalf of HFG.

The respondent was paid an agreed percentage based on the amount of investment. He stated to the OAE that he earned $21,500 for his role in the fraudulent scheme. Escrow agreements were executed, but these agreements contained a provision which permitted HFG to unilaterally request release of the escrow funds. The respondent used the provision to transfer millions of dollars to HFG and the principal coconspirators, ignoring his fiduciary duties owed to the escrow clients. The respondent failed to keep his escrow clients informed, failed to advise them of the disbursement of their funds, and failed to provide them with an accounting of their funds. Count two charged the respondent with violations of rules 1.15(a), 1.4(b) and (c), 8.4(b), and 8.4(c) of the RPC in connection with his role in a real estate transaction as the escrow agent for an earnest money escrow agreement involving Imperial Development Tracewood, LLC (hereinafter the seller), and Kennie Arriola, Ingrid Arriola, Herman Kinscher, Ben Arriola, Imedla Young, and Erik Kinscher (hereinafter collectively the buyers). Pursuant to the escrow agreement, the respondent agreed to hold the earnest money in accordance with the terms of the contract or until written release disbursement instructions were received from the seller.

On July 17, 2008, the buyers wired $100,000 into a trust account maintained by the respondent at Bank of America (account ending 2099), and separately wired an additional $40,000 into the account, for a total of $140,000. Thereafter, on July 25, 2008, the respondent wired $105,000 of the $140,000 to an account held by HFG, and on September 5, 2008, wired the remaining $35,000 to an account held by an unrelated corporation named APV, LLC. In neither instance did the respondent receive written authorization from the buyers or the seller before he disbursed the escrow funds.

Count three charged the respondent with violations of rules 1.15(a), 1.4(b) and (c), 8.4(b), and 8.4(c) of the RPC in connection with his role as the escrow agent of funds received on behalf of his client, OFP/Oliver Byington (hereinafter OFP). On July 24, 2008, the respondent received $200,000 in escrow funds from OFP. Four days later, on July 28, 2008, the respondent disbursed the funds received from OFP to HFG, without obtaining authorization from OFP to release the escrow funds. In addition, the respondent took a fee from the escrow proceeds in the amount of $625 without the knowledge or permission of OFP. OFP's funds were fraudulently transferred by the respondent and misappropriated by HFG.

Count four charged the respondent with violations of rules 1.15(a), 8.4(b), and 8.4(c) of the RPC in connection with his role as the escrow agent for a loan to be provided by HFG to Providence Home Building & Design, Inc. (hereinafter Providence). The escrow agreement provided for the release of the funds on deposit if any of three enumerated conditions occurred. On July 9, 2008, Providence wired $67,000 to an escrow account (account ending 2099) maintained by the respondent at Bank of America. On July 10, 2008, Providence wired $100,000 to an escrow account (account ending 2099) maintained by the respondent at Bank of America. On July 11, 2008, the respondent transferred the $167,000 received from Providence to another trust account (account ending 9648) maintained by the respondent at Bank of America. On September 4, 2008, Providence wired an additional $80,000 into the respondent's escrow account (account ending 2099).

On September 12, 2008, the respondent wired $248,881.72, of which $80,000 consisted of funds received from Providence, from the account ending 2099 to a bank account at First National Bank of Alaska for an unrelated corporate entity called APV, LLC. The escrow agreement did not authorize the respondent to send Providence's funds to APV, LLC.

Count five charged the respondent with violating RPC rule 1.15(d) and rule 1:21-6 of the New Jersey Court Rules based on his failure to comply with various recordkeeping requirements under the Rules, namely, contemporaneous three-way reconciliations.

The New York FBI Field Office posted on the related criminal conviction. (Mike Frisch)

March 7, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Monday, March 6, 2017

New Ohio Ethics Opinions

The web page of the Ohio Supreme Court notes two new ethics opinions

The Ohio Board of Professional Conduct today issued advisory opinions on lawyer advertising and a judge’s duty to report misconduct by other judges and lawyers.

In Advisory Opinion 2017-01, the Board provides guidance for lawyers who advertise for litigation services provided on a contingent fee basis. 

Lawyers may not use statements such as, “There’s no charge unless we win your case,” or “No fee without recovery,” if the lawyer intends to recover litigation costs and expenses from the client. If a lawyer intends to recover advanced costs and expenses of litigation from the client, a disclaimer is required in the advertisement that explains the client’s obligations for repayment. The opinion holds regardless of the outcome of the litigation and it withdraws Adv.Op 98-9.

In its other opinion today, the Board outlined a judge’s duty to report the misconduct of other judges and of lawyers, in Advisory Opinion 2017-02.

A judge who has knowledge that another judge has committed a violation of the Code of Judicial Conduct that questions the other judge’s honesty, trustworthiness, or fitness as a judge, is required to report it to disciplinary counsel. Similarly, if a judge has knowledge that a lawyer violated the Rules of Professional Conduct regarding the lawyer’s honesty, trustworthiness, or fitness as a lawyer, he or she must report it to disciplinary counsel or a certified grievance committee.

A report of misconduct should be made within a reasonable time after the judge knows of the violation.  Additionally, a judge who reports the misconduct of a lawyer is not presumptively disqualified from presiding over cases in which that lawyer appears.  The opinion withdraws Adv.Op. 89-32.

(Mike Frisch)

March 6, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Holiday Cheer Leads To Extended Probation

A Wyoming attorney admitted in 1984 has a "history of substance abuse, which he has addressed with varying degrees of success over the years."

His disciplinary problems stemmed from a 2016 DUI for which he received a sentence that included a period of jail time.

To his credit, the attorney contacted the Wyoming Professional Assistance Program and entered into a treatment plan. As a consequence, he was able to enter into a stipulated disposition of a stayed six-month suspension with six months disciplinary probation.

He was "generally compliant" with the WPAP program with a single lapse.

But then came Christmas 2016 and, like Jesse James, he should have avoided visiting Northfield, Minnesota.

He went off the wagon and had numerous either positive or missed Soberlink tests at a family gathering with his mother and siblings.

The problem was promptly reported and has led to an order of the Wyoming Supreme Court extending the probation for six months with additional conditions. (Mike Frisch)

March 6, 2017 in Bar Discipline & Process | Permalink | Comments (0)