Wednesday, April 13, 2016

Tenured Professor Gets Interim Suspension For Misappropriation Allegations

An interim suspension has been ordered by the New York Appellate Division for the First Judicial Department

based upon uncontested evidence, namely, written admissions and bank records, that he, inter alia, misappropriated client funds, which misconduct immediately threatens the public interest.

The court described the circumstances of the investigation

Respondent is a tenured professor at Rutgers School of Law, who also maintains a transactional law practice. In two instances, respondent withdrew IOLA funds that did not belong to him in order to meet his personal and business expenses. In one instance, in December 2013, respondent received a $220,000 contract deposit on behalf of his client, the seller in a real estate transaction, which he deposited into his IOLA account. Between January 2 and February 14, 2014, when the transaction closed, respondent repeatedly invaded the $220,000 contract deposit such that, as of February 11, 2014, his account balance had fallen to $500. Respondent replenished the funds he withdrew with funds from his two operating accounts.

In the second instance, on August 5, 2014, respondent deposited a $100,000 contract deposit he received from his clients, a married couple, whom he represented in connection with their purchase of a condominium; he deposited the funds into his IOLA account. At the time, respondent was holding $10,395.96 on behalf of another client in his IOLA account. Between August 5 and August 20, 2014, when the transaction closed, respondent invaded the IOLA funds by making transfers to his business and personal accounts such that, as of August 14, 2014, his account balance had fallen to $74,495.96.

On the same day as the closing, respondent replenished the funds he withdrew by transferring funds from his two operating accounts. Nonetheless, an IOLA check in the amount of $15,914.93, representing the payment of a flip tax, was dishonored due to insufficient funds; this is the dishonored check that precipitated the Committee's investigation. On September 23, 2014, respondent replaced this check with a bank cashier's check drawn against his IOLA account.

Respondent's documentary responses also reveal that he commingled client funds with his personal and business funds, failed to maintain required IOLA account records, and, on one occasion, made a cash withdrawal from his IOLA account for $1,500.

 The response

In response to the Committee's requests, respondent submitted written responses wherein he vigorously denied that he intentionally converted client funds, and explained that, due to his ignorance and misunderstanding of the escrow rules, during the period at issue, he mistakenly believed that he could withdraw and use client or third-party funds in his IOLA account as long as he had the same amount of funds on deposit in one of his other non-IOLA accounts, which he contended was always the case. Respondent explained that he had sufficient funds in personal liquid assets in his and his wife's personal accounts, but he was reluctant to frequently withdraw funds from these accounts because he wanted to avoid conflict with his wife.

In mitigation, respondent explains in his cross motion that his misconduct on the aforementioned transactions occurred in the midst of significant personal and family health problems. In particular, in September 2009, both respondent's wife and brother suffered from significant medical conditions. As a result of his personal and family situation, respondent took an unpaid leave from his teaching position for the 2010-2011 academic year. In or about 2012, respondent also started seeing a psychiatrist approximately three times a week. Respondent's health problems caused him to take a second leave of absence from his teaching position in the fall of 2014 that continued into 2015. Respondent has been under Dr. Carol J. Weiss's care since March 2015. Dr. Weiss opines that respondent "is not yet in a position where he can manage the stresses of the disciplinary investigation and proceeding . . ." and thus "it would be in his best medical interest for him to have additional recovery time, such as three to four months, before he faces such additional stresses."

The attorney also explained that he reduced his teaching and outside workload. He asked that interim suspension not be imposed.

The court

The record sufficiently establishes that respondent repeatedly misappropriated and/or converted client funds, repeatedly commingled personal and client funds, and failed to keep required IOLA account records...

...the Committee's motion should be granted and respondent suspended from the practice of law, pursuant to 22 NYCRR 603.4(e)(1)(iii), effective immediately, and until such time as disciplinary matters pending before the Committee have been concluded, and until further order of this Court. We further grant respondent's cross motion to the limited extent of of redacting the bank account numbers in the financial information included in the motion and cross motion papers.

(Mike Frisch)


April 13, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, April 12, 2016

The Greeting Card

A Louisiana Hearing Committee has proposed disbarment of an attorney

Hearing Committee #27 unanimously finds that Respondent has engaged in multiple criminal activities including felony activities. In addition, and importantly, the Respondent engaged in acts of misconduct involving a knowing act of dishonesty and fraud within a pending domestic matter. This conduct spans over a period of a decade and suggests that her activity is not an isolated or remote event. Respondent's behavior reflects adversely on her character and fitness to practice law in the State of Louisiana. Additionally, Hearing Committee #27 believes that it is important that the Respondent chose to ignore these disciplinary proceedings and not participate. Given all of these factors, it is a recommendation of Hearing Committee #27 that disbarment be issued to Respondent...

The committee found that she fabricated evidence in her own divorce

Respondent responded to  [husband] Mr. Molaison's discovery requests and admitted to her adulterous relationship with Mr. Pfleeger. Respondent also provided copies of emails between her and Mr. Pfleeger, and a greeting card purportedly from Mr. Pfleeger as documentary proof of the adulterous relationship. Meanwhile, on June 13, 2011, Respondent signed a sworn affidavit attesting to the truthfulness of her responses to Mr. Molaison's discovery requests.

 On July 14, 2011, Mr. Molaison filed a Supplemental Petition for Divorce based on Respondent's adultery. The emails and greeting card produced by Respondent during discovery were ultimately presented to the court in support of obtaining a divorce based on adultery.

The matter went to trial on August 17, 2011, during which Respondent testified under oath. She testified that she committed adultery with Bryan Pfleeger; and she testified as to the authenticity of both her emails to and from Mr. Pfleeger, and a greeting card allegedly received from Mr. Pfleeger. All documents were admitted into evidence and divorce was granted based on adultery.

ODC has since confirmed Respondent's post-filing adultery with Mr. Pfleeger, and authenticated the emails between Respondent and Mr. Pfleeger regarding same. However, the greeting card that Respondent attributed to Mr. Pfleeger and that she submitted to opposing party and counsel during discovery was fabricated by Respondent without Mr. Pfleeger's knowledge or consent. Respondent further allowed this false evidence to be submitted to the court during the underlying proceedings.

On September 20, 20 11, Respondent emailed Mr. Molaison and claimed her testimony regarding adultery with Mr. Pfleeger was false. Respondent further confirmed to Mr. Molaison that the greeting card attributed to Mr. Pfleeger was also false. On November 8, 2011, Mr. Moliason informed his lawyer, Barbara Ziv, of Respondent's claim of false testimony and of the fake greeting card.

On December 7, 2011, Ms. Ziv informed Mr. Pfleeger of Respondent's recent statements to Mr. Molaison. Mr. Pfleeger confirmed his adulterous relationship with Respondent, and confirmed the authenticity of his emails to and from Respondent; however, Mr. Pfleeger denied any involvement with the greeting card in question. Ms. Ziv then informed Mr. Pfleeger that, under the circumstances, she was obligated to file a disciplinary complaint against Respondent...

Respondent's ever-changing story regarding the reported adulterous relationship with Mr. Pfleeger is troubling. Respondent responded to discovery and testified in court that she committed adultery with Mr. Pfleeger. She then told Mr. Molaison and now ODC that her testimony was false. However, ODC has confirmed the fact that Respondent did engage in a post-filing adulterous relationship with Mr. Pfleeger. Respondent engaged in professional misconduct. Respondent's conduct also violated Rule 8.4(a) (violated or attempted to violate the Rules of Professional Conduct).

As to the greeting card

It was later revealed that Respondent fabricated the greeting card without Mr. Pfleeger's knowledge or consent.

There were criminal matters involving theft and driving offense including

On March 22, 2013 the Respondent was operating a beige Infiniti automobile in an erratic fashion. Law enforcement performed a traffic stop and discovered a clear plastic bag with seven rocks of crack cocaine in her possession...Although required to submit to felony monitoring, on August 7, 2014 the Respondent failed to appear for monitoring resulting in the issuance of a bench warrant for her arrest and a hold without bond. As of this date the Respondent remains a fugitive.

(Mike Frisch)

April 12, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Abuse Of Drugs And Confidences

A six-month suspension and a reinstatement proceeding was imposed by the Massachusetts Supreme Judicial Court.

This summary of the misconduct

The respondent was sued in small claims court by his former client. The complaint alleged that the respondent had failed to perform several services for which he had been paid, failed to return unearned fees and to repay a personal loan the former client had made to the respondent. The respondent filed an answer to the complaint that, without his former client’s consent after consultation, made disclosures alleging highly personal confidential information about the client. None of these disclosures was necessary to any defense or claim in the small claims action, nor did the respondent reasonably believe the disclosures were necessary to establish a defense...

In aggravation, the respondent has a disciplinary history of a prior public reprimand for similar misconduct. In addition, the respondent had received a warning about protecting confidential client information in connection with a prior complaint by the same former client. In mitigation, the respondent had become addicted to prescription pain medication, which clouded his judgment in this case. The respondent voluntarily received treatment for his addiction, voluntarily submitted to an evaluation by LCL, and consented to disclosure of treatment information to LCL.

The sanction was an agreed disposition. (Mike Frisch)

April 12, 2016 in Bar Discipline & Process | Permalink | Comments (0)

"A Disturbing Disregard For Or Ignorance Of The Facts"

The Connecticut Supreme Court denied a writ of error filed by an attorney sanctioned for violations in appeal matters.

we conclude that the Appellate Court did not abuse its discretion in suspending Miller from the practice of law before that court for a period of six months on the basis of her repeated failure to meet deadlines, to comply with the rules of practice, and for filing a frivolous appeal.

On the merits

Miller’s contention that rule 8.4 of the Rules of Professional Conduct provides the exclusive list of misconduct for which an attorney may be sanctioned is patently frivolous. Nor is the present case, as Miller argues, the first in which an attorney has been sanctioned by a Connecticut court for failing to comply with the rules or orders of the court. Indeed, our case law is replete with examples of instances in which our courts have exercised their authority, whether inherent or pursuant to statute or the rules of practice, to sanction an attorney for such conduct...

In her brief to this court, Miller attempts to minimize the professional lapses that ultimately convinced the Appellate Court that it had no choice but to suspend her temporarily from practice before that court. She also argues that the record belies that court’s determination that she exhibited a persistent pattern of irresponsibility in the handling of her cases. Miller’s arguments reveal a disturbing disregard for or ignorance of the facts underlying this case.

More trouble ahead

Finally, Miller claims that the Appellate Court abused its discretion in referring her to the Chief Disciplinary Counsel without alleging the violation of any Rule of Professional Conduct or otherwise providing guidance as to the nature of the inquiry to be conducted. Miller also expresses concern that the referral could result in duplicative sanctions for the conduct described herein...

The Appellate Court not only has the authority to refer an attorney to the Chief Disciplinary Counsel, it has an obligation to do so when, as in the present case, it concludes that that attorney’s persistent pattern of missing deadlines and violating court rules threatens the vital interests of his or her clients. Of course, we do not know whether the Chief Disciplinary Counsel will find instances of neglectful or otherwise unacceptable conduct by Miller in the Superior Court, but, in light of the number and nature of Miller’s transgressions in the Appellate Court, the Appellate Court certainly had the discretion to bring those transgressions to the attention of the Chief Disciplinary Counsel for whatever action, if any, may be appropriate with respect to Miller’s conduct in the Superior Court.

April 12, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Child Porn Conviction Leads To Bar Charges

A hearing on disciplinary charges is scheduled in a matter involving a convicted and  suspended attorney.

The facts underlying respondent's conviction, which were placed on the record during the plea colloquy, are as follows:

• In November 2013, detectives with the Franklin County Internet Crimes Against Children Task Force were investigating suspected child pornography and viewed a file list on an IP address that contained several titles and hash values indicating the presences of child pornography.

• As of January 1, 2014, that IP address contained 223 files of suspected child pornography. A detective obtained the subscriber information after issuing subpoenas to Time Warner. The IP address was registered to respondent at his home address. The detectives obtained a search warrant and conducted a forensic exam on respondent's computer and recovered a number of images of child pornography.

• Respondent admitted to downloading and possessing child pornography for a number of years.

The Ohio Supreme Court lists the upcoming hearings with links to the charges. (Mike Frisch)

April 12, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Monday, April 11, 2016

File Deletions Lead To Resignation

A statement of charges filed by the Illinois Administrator moves for resignation (consent disbarment)  of an attorney

On December 4, 2014, Movant was charged in a four-count information with two offenses of official misconduct, in violation of 720 ILCS 5/33-3(b) (Counts I and III); aggravated computer tampering, in violation of 720 ILCS 5/17-52(a)(1) (Count II); and computer tampering, in violation of 720 ILCS 5/17-51(a)(3) (Count IV). The charges alleged that on January 9, 2014, Movant, while employed as an assistant State’s Attorney for Hancock County, Illinois, knowingly deleted data contained on the computers of the Hancock County State’s Attorney’s office.

The data that Movant unlawfully deleted included files, correspondence, grant documents, trial preparation materials, and memoranda. Movant performed those acts after he learned that the Hancock County Board did not appoint him to succeed James M. Drozdz, who recently had died, as State’s Attorney for Hancock County.

On March 4, 2016, the Honorable William E. Poncin allowed the State to amend Count IV of the information to reduce the felony charge of computer tampering to a violation of 720 ILCS 5/17-51(a)(2), a Class A misdemeanor. Movant pled guilty to the offense in Count IV as amended. With the parties’ agreement, the court dismissed the other counts and sentenced Movant to conditional discharge for a period of 18 months, with agreed conditions including that he submit a motion to this Court for a voluntary name strike under Supreme Court Rule 762(a), perform 40 hours of public service, and pay a fine, costs and restitution totaling $590.

The Herald-Whig reported on the offense

A former Hancock County assistant state's attorney received 18 months conditional discharge -- a form of unsupervised probation -- after pleading guilty Friday to an amended charge of computer tampering, a class A misdemeanor. Other charges he faced were dismissed as part of the plea.

Brian Hunter originally was charged with two counts of official misconduct and two counts of aggravated computer tampering in December 2014.

Prosecutors alleged that Hunter went to the state's attorney's office Jan. 9, 2014, and deleted documents, files, letters of correspondence, grant documents, trial preparation materials and memoranda from official state's attorney's computers after he learned that the Hancock County Board didn't select him to replace the late Jim Drodz as state's attorney. Drodz died Dec. 29, 2013, in a traffic crash in Dade County, Ga.

Hunter resigned from the office Jan. 10, 2014.

As part of the sentence, Hunter must complete 40 hours of community service, pay fines and court costs of $1,167, including $90 in restitution to the county, and surrender his law license. According to the Illinois Attorney Registration and Disciplinary Commission, Hunter is voluntarily inactive and not authorized to practice law in the state.

According to court records, Hunter, who now lives in the state of Washington, is employed and in an electrical apprenticeship program.

The case was prosecuted by the state appellate prosecutor's office.

April 11, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Risky Business

The Michigan Attorney Discipline Board affirmed a panel's 60-day suspension of an attorney in a matter in which both sides sought review of the sanction.

The board discussed the substance of Rule 1.15

Nowhere in the text of MRPC 1.15 will one fmd the words "misappropriation" or "commingling," but parties, hearing panels, this Board, and others have traditionally used the terms to describe conduct prohibited by MRPC 1.15( d). Many disciplinary bodies have used the word "misappropriation" as a synonym for theft, or, at times, for any unauthorized taking or use of the funds not belonging to a lawyer, whether accompanied by bad intent or no intent at all. In other words, we have said that misappropriation is a "per se offense," meaning that "'once the running balance of the [trust] account fell below the amount [required to be] held in trust for the client, misappropriation had occurred.'" Grievance Administrator v Deborah C. Lynch, 96-96-GA (ADB 1997) (discussing cases involving "inadvertent misuse" of client funds), pp 5-6.

Often, the modifier "intentional" or "knowing" is attached to the word "misappropriation" to signal the some of the most serious conduct prohibited by MRPC 1.15( d). With the increased use of the ABA Standards since the Court's Lopatin decision adopting them in 2000, the word "conversion" has been used much more frequently to refer to knowing misuse of client funds.  A lawyer who knowingly takes money belonging to others has failed to keep it separate from his own in the most flagrant way. Thus, this kind of "[ m ]isappropriation of client funds ... is an obvious violation of the rule." The lawyer has failed to keep funds safe and separate from his own by appropriating them to his or her own use.


We now turn, at last, to the provision of the rule found to have been violated in this case. The panel found that respondent deposited personal funds into the trust account in sums greater   "reasonably necessary to pay financial institution service charges or fees or to obtain a waiver of service charges or fees." MRPC 1.15(f). Some view this type of rule as an "exception" to the anticommingling rule. While this may be seen as true in some circumstances, the respondent's contentions in this case illustrate that it may not always be an accurate description. In other words, our rule's prohibition does not depend upon whether or not client funds are actually in the trust account. Even if no client funds are in the account, MRPC 1.15(f) prohibits the deposit of lawyer funds in an amount beyond that "reasonably necessary" to payor avoid the charges or fees referenced in the rule.

Respondent argues that there was no commingling because there were no client funds in the account. After receiving evidence, including generalized testimony from respondent that he placed some unearned fees in the account, the panel concluded that the ''the proofs are not clear with respect to the actual mixing of client and attorney funds here." In any event, the formal complaint did not allege a violation of MRPC 1.15( d), and the Administrator disavowed such a charge. Understandably, this informed much of respondent's argument, as he sought to make it clear that client funds were not invaded and that the absence of a Rule 1.15( d) charge took commingling off the table. The panel agreed, and so do we.

On sanction

Respondent asserted that there was no risk to client funds, because there were no client funds in the account. However, this assertion is inconsistent with respondent's own testimony at the September 11, 2013 hearing and two of the bank record exhibits offered by petitioner and admitted into evidence by the panel. The hearing panel's report appropriately noted the potential for injury that respondent's predicament with his creditors created. We agree with the panel's observation that respondent's misuse of his IOLTA account, and his predicament with his creditors, did put his clients' funds at risk and therefore caused the potential for injury.

The board concluded that the sanction was within the range of discipline for the found misconduct. (Mike Frisch)

April 11, 2016 in Bar Discipline & Process | Permalink | Comments (0)

A Bit Less Than Disbarment

An attorney who failed to turn over funds due to his law firm agreed to a five-year suspension imposed by the Pennsylvania Supreme Court.

The firm had confronted the attorney about failure to deposit client funds in the IOLTA account. He confessed to having kept over $40,000 due to the firm. He repaid $1,005 to his former partners.

The sanction was agreed to by Disciplinary Counsel in light of the attorney's acknowledgement of the misconduct and sanction. (Mike Frisch)

April 11, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Resignation For Misuse Of Entrusted Funds

An attorney who misused a relatively small amount of entrusted funds has resigned from the New York Appellate Division for the First Judicial Department.

The court

Respondent states that he is aware that he is the subject of disciplinary charges currently pending before a Referee alleging that he misappropriated and/or intentionally converted funds belonging to others for his own use and benefit in violation of the New York Rules of Professional Conduct (22 NYCRR 1200.00), namely, rule 1.15(a) and rule 8.4(c).

Specifically, respondent acknowledges that during his May 13, 2015 examination under oath before the Committee he testified, inter alia, that he used approximately $2,400 that belonged to a client whom he represented in a dispute with his commercial landlord, for his own personal purposes. Respondent further testified that he used approximately $1,500 which belonged to an estate for his own personal purposes (see 22 NYCRR 603.11[a][2)). Respondent testified that he reimbursed both the client and the estate.

The attorney was admitted in 1987. (Mike Frisch)

April 11, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Sunday, April 10, 2016

Duped Into Reprimand

The attorney partners in a two-partner firm (Hutton and Vasa) purchased a highly-successful personal-injury law practice. The seller - attorney Lipis -  was later suspended  for two years in 2008 and lost a  bid for reinstatement.

The attorneys employed him in violation of unauthorized practice restrictions in order to bolster the ailing practice.


Beginning in 2010, Hutton moved in with Lipis' to Lipis's home. They currently share Lipis's split-level home. 

 At all times relevant to the petition, Hutton and Vasa were aware of Lipis's suspensiOn. 

The former attorney was quite skilled at negotiating settlement but crossed the line

we have no hesitation in concluding that in the circumstances of this case, Lipis's actions constituted the practice of law. We do not need to provide an abstract or stand-alone definition of the "practice of law" to resolve this issue. To be sure, the Court has provided some general guidance about the nature of work that might readily be categorized as the practice of law: "In the context of bar discipline proceedings, it is relevant whether a disbarred or suspended lawyer draws on his or her legal education and experience and exercises judgment in applying legal principles to address the individual needs of clients." Matter of Bott, 462 Mass. 430, 437, 28 Mass. Att'y Disc. R. 54, 62 (2012). Using that criterion, Lipis's evaluation of V &H's cases would appear prima-facie to fall generally within the practice of law. Done properly, such evaluation required that Lipis consider, in the specific factual context of each client's individual case, the evidence and the applicable law, including rights to recovery, available defenses, the admissibility of the available evidence and the legal avenues available for obtaining evidence where needed, all for the purpose of making a recommendation for settlement...

We have detailed above the respondents' nearly complete lack of supervision of. Lipis. It is undisputed that he worked alone in a conference room across the hall from the respondents' offices. Hutton was out of the country when Lipis started, and Vasa was rarely in the office during the relevant time period; both respondents had offices in a separate suite from the one where Lipis was working. Although the respondents did not think he was doing so, Lipis indeed called clients. In addition, as discussed below, Lipis was permitted to adopt and use a false name. Bar counsel has proved a violation of these rules.

 Hutton was visiting h is sick father in Europe when Lipis started. Vasa told Hutton on his return that Bar Counsel had blessed the arrangement.

A few months later

Vasa asked Lipis to do a voice shot for the firm, where his voice would be recorded saying he was Jay Lipis and he was back at the firm. We find that Lipis told Hutton about the voice shot and the proposed salary in October 2012. After learning in mid-October about the proposed salary and the voice shot, Hutton called assistant bar counsel Linda Bauer on October 16, 2012. 

 Hutton asked Bauer if the firm could hire Lipis in a non-legal capacity to negotiate with insurance adjusters on bodily injury claims. Bauer said that this was prohibited, referred him to SJC Rule 4:01, § 17(7) and confirmed her advice with a letter dated October 16, referencing their phone conversation earlier that day.  

Hutton fired Lipis after his conversation with Bauer. 

Lipis used the false name ("Larry Kreiger") so that insurance adjusters would not know they were dealing with him

The fact that Lipis decided he needed to use a false name to avoid recognition by insurance adjusters he had worked with in the past should have raised a large red flag for the respondents. Their admission that it did not speaks volumes. Indeed, Vasa thought the false name was a joke, and Hutton was apparently unperturbed. In their requests for findings, both respondents resist the conclusion that there is anything wrong with the use of a false name. · Hutton cites an IRS Bulletin that apparently authorizes the use of pseudonyms...

The court rejected the argument and found a violation of Rule 8.4(c).

As to sanction

We do not think the respondents' conduct rises to the level manifest in the six-month suspension cases. Bar counsel did not prove that Lipis gave legal advice, actively assisted in litigation matters, had extensive client contact or had access to IOLTA funds. Lipis worked parttime for at most ten weeks. We think a six-month suspension is too severe for the conduct we have found. Turning to Hutton first, we note that he could certainly have been more proactive about contacting bar counsel once he learned Lipis was back. However, we find that Hutton was misled by Vasa into thinking that bar counsel had given the arrangement her blessing, and that this misplaced reliance on Vasa was reasonable. This does not mean there should be no sanction, since we have found above that Hutton, too, violated various rules. But to some extent, Hutton was Vasa's dupe; as discussed below, Vasa did not include Hutton when he emailed Lipis about starting work, he brought Lipis back while Hutton was out of town, and he twice tried to make arrangements with Lipis behind Hutton's back- the proposal that Lipis do a voice shot, and the proposal to pay him $1,000 per week to stay on.

Clearly some sanction is in order for Hutton. As a partner and a supervising attorney in a small firm, he was equally responsible with Vasa for V &H engaging Lipis in violation of the rules. Further, Hutton knew that Lipis was using a false name and he knew that on at least one occasion, Lipis represented himself to an insurance agent as an attorney. At any point, Hutton could have called Linda Bauer to determine if indeed the Lip is arrangement was lawful, or he could have opened the rule book. But unlike Vasa, Hutton was ashamed, contrite and insightful and, as indicated, fired Lipis promptly once he heard from Bauer that the firm could not engage Lipis. He acknowledged that he violated the ethical rules and conceded that punishment is called for.

The Board of Bar Overseers imposed a public reprimand of Hutton and recommended a three-month suspension for Vaca.

Lipis received an indefinite suspension for the misconduct. (Mike Frisch)

April 10, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Former Fox Rothschild Attorney Suspended For Insider Trading Conviction

An attorney recently convicted of insider trading has been suspended pending final discipline by the Pennsylvania Supreme Court.

The Reporter reported on the conviction

Doylestown lawyer Herbert K. Sudfeld, Jr. has been found guilty of illegally profiting from a 2011 merger between insurer Harleysville Group, Inc. and Nationwide Mutual Insurance Co., the U.S. Department of Justice announced.

Sudfeld, 64, was convicted on charges of insider trading and making a false statement in federal court on Feb. 5, according to the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

Sudfeld, who was indicted in July on securities fraud and other criminal counts, faces a maximum sentence of 25 years in prison and three years of supervised release, and possibly a substantial fine.

Prosecutors had said that while a partner at Fox Rothschild, the law firm advising Harleysville Group in the merger, Sudfeld — despite his learning through nonpublic information that the merger was imminent and that he had “a fiduciary duty to keep it confidential,” prosecutors alleged — used the insider information to direct his stockbroker to purchase 1,000 shares of Harleysville stock under his wife’s account and 2,000 shares from his personal account on Sept. 28, 2011, the day before the public announcement of the merger, according to the federal indictment.

After the merger was announced on the morning of Sept. 29, 2011, just before the market opened, shares of Harleysville stock rose by about 85 percent, and Sudfeld immediately sold the 3,000 shares he had bought the day before, netting a profit of about $75,530, according to the indictment.

Prosecutors also said that during an investigation into the matter, Sudfeld lied to FBI agents looking into the alleged insider trading, falsely stating that he wasn’t aware of the stock transactions until several days to a week afterward; that he told his broker he couldn’t be involved in trades of Harleysville stock due to his position at the law firm; and that he didn’t discuss the stock trades with his broker until after they were completed.

It was not immediately known when Sudfeld will be sentenced.

The Securities & Exchange Commission filed a related civil suit . 

The temporary suspension was imposed based on the joint petition of the attorney and disciplinary counsel. (Mike Frisch)

April 10, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Friday, April 8, 2016

Kansas Agrees With Missouri

The Kansas Supreme Court has stayed an indefinite suspension and placed the attorney on supervised probation for misconduct in several matters

The respondent borrowed funds held in trust on behalf of G.F. The hearing panel concludes that the respondent's motivation regarding that misconduct was motivated by selfishness. Additionally, the respondent placed earned fees in his attorney trust account in an attempt to avoid tax levies. The hearing panel concludes that such misconduct was motivated by dishonesty and selfishness. However, the respondent also advanced fees to his clients to provide financial assistance. The hearing panel finds that misconduct was not motivated by dishonesty or selfishness.

On the plus side

The respondent is an active and productive member of the bar of the Metropolitan Kansas City area. The respondent also enjoys the respect of his peers and generally possesses a good character and reputation as evidenced by several letters received by the hearing panel.

The misconduct was also prosecuted in Missouri where the same sanction was imposed.

This matter was handled under the procedures for reciprocal discipline.

Video of the oral argument is linked here. (Mike Frisch)

April 8, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Public Discipline For Part-Time Magistrate

A pert-time judicial magistrate has been reprimanded by the Iowa Supreme Court.

Magistrate Sevcik, acting in his capacity as a private attorney, represented a client in district court for a hearing on a motion for temporary placement of a child. Prior to the hearing, he retrieved four criminal and six domestic abuse court files from the office of the clerk of court. He had notified the clerk of court in advance that he wanted the files and intended to ask the judge to take judicial notice of the contents of the file during the course of the hearing. Magistrate Sevcik was uncertain whether he was on duty as a magistrate when he requested the files, but was not on duty when he retrieved them from the clerk’s office. He knew two of the criminal files included deferred judgments and had been expunged. These files were marked as expunged. He understood the expunged files contained confidential documents and were only available to specific persons and agencies, including magistrates...[He] believed the district judge presiding over the hearing could take judicial notice of all the files, and he requested such judicial notice during the hearing, placing them on the courtroom bench. In addition, Magistrate Sevcik used a document from one of the expunged files to impeach a witness during the hearing.

The court affirmed some findings of misconduct

A judge who acquires nonpublic information in a judicial capacity and uses the information for purposes unrelated to the judge’s judicial duties can undermine the judge’s independence, integrity, and impartiality. Here, the conduct by Magistrate Sevcik was in the nature of abuse of power and projected a willingness to misuse judicial authority to benefit his private practice of law.

On sanction

It is unnecessary for us to decide if we should adopt a public admonition as a form of judicial discipline. Considering the nature of the conduct, this case does not present a need for us to provide instruction to magistrates on how to use their authority to access expunged records. The misuse of authority in this case was not the result of a misunderstanding, but a clear violation of the rule against using judicial authority for purposes unrelated to the work of a magistrate. We agree with the Commission [on Judicial Qualifications] that a public reprimand is the appropriate sanction. It meets the goals of imposing sanctions and is supported by the relevant circumstances in the case.

(Mike Frisch)

April 8, 2016 in Bar Discipline & Process, Judicial Ethics and the Courts | Permalink | Comments (0)

Conspiring Against Client

The Ohio Supreme Court has suspended an attorney as a result of a criminal conviction.

The ABA Journal had reported

A former county bar association president and his law partner in a Youngstown, Ohio, firm have avoided prison time in a federal case over claimed extortion of a client convenience store owner.

Originally charged with extortion and obstruction of justice, among other crimes, defendant attorneys Scott Cochran and Neal Atway got a reprieve last year when a mistrial was declared in the Cleveland case. An undescribed juror communication led to the early termination of the trial, asWFMJ reported at the time.

In October, the two took a plea deal: Cochran pleaded guilty to misbehavior in the court’s presence, because of failing to provide truthful testimony at a trial; and Atway pleaded guilty to conspiring against the rights of a client, according to the Vindicator and WFMJ.

On Tuesday, the two were sentenced. Cochran was fined $2,500 and put on probation for two years. Atway was fined $2,000 and put on home confinement, with an electronic monitor, for four months, and probation for three years.

In pre-sentence filings, lawyers for both defendants said they had already suffered significantly as a result of the case.

“While many of his clients were willing to stay with him, and many in the local legal community expressed continued support for him, the stress and his commitment to fighting the original charges against him devastated his practice,” wrote attorney Lynn Maro in a sentencing memorandum about Cochran.

Attorney Roger Synenberg represented Atway. He described his client as “deeply remorseful, ashamed, and embarrassed by his conduct.”

An earlier Vindicator story provides additional details about the trial.

The extortion case began to unfold when Atway was hired to represent convenience store owner Charles Muth, who faced sentencing in a criminal case concerning a drive-by shooting at the home in which the wife of a rival store owner lived. Atway was accused of conspiring with the other store owner, Mohd Rawhneh, in an effort to extract money and property from Atway’s client, Muth.

If Muth didn’t ante up, he was allegedly told, the other store owner would speak at his sentencing hearing in an effort to see that Muth got more time, the WFMJ article explains.

Cochran testified when the two lawyers were tried last year that he knew nothing about Atway’s claimed communication to his client, in which he allegedly told Muth that Rawhneh would say nothing at Muth’s sentencing if he anted up. However, federal prosecutors say Cochran had heard a phone conversation in which Atway did make this statement to Muth.

Rawhneh previously took a plea in a witness-tampering case and awaits sentencing.

The suspension is of Mr. Atway. (Mike Frisch)

April 8, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Sanction Recommendation Rejected As Unduly Lenient

In a disciplinary matter involving neglect and other violations in two criminal matters, the West Virginia Supreme Court of Appeals was critical of the recommendations for discipline

Taking into account all the mitigating and aggravating factors, we are confounded as to why the HPS found the lack of prior “adverse” disciplinary findings as a mitigating factor while also finding the presence of two prior Investigative Panel admonishments to be an aggravating factor. As the HPS found, and the LDB advocates, it should be considered mitigating that Ms. Sturm was only admonished in the two prior disciplinary actions brought against her. The HPS notes in the Brown/Wright-Ochoa case that Ms. Sturm “had no prior adverse disciplinary findings,” despite also recognizing the prior disciplinary action by the Investigative Panel of the LDB. We are equally disturbed that the LDB engaged in a game of semantics in its argument before the Court that Ms. Sturm “had no prior disciplinary proceedings before this Honorable Court,” in an attempt to mitigate Ms. Sturm’s prior admonishments by the Investigative Panel for conduct very similar to the conduct at issue now. The manner in which these conflicting positions espoused by the HPS and the LDB as the mitigating and aggravating factors were analyzed is confusing at best. There is nothing in our rules or case law supportive of the proposition that if the discipline is only an admonishment given by the Investigative Panel of the LDB, and not this Court, it is not to be considered as aggravating. Rather, we have treated an Investigative Panel admonishment to be aggravating just like any other disciplinary action.

The court's view

Notwithstanding Ms. Sturm’s conduct in the cases sub judice, Ms. Sturm’s prior conduct establishes her propensity for ignoring requests from the ODC and this Court for information, as well as her pattern and practice of failing to file pleadings or appeals with courts and failing to communicate with her clients. Our concern with Ms. Sturm’s conduct in these two cases is heightened by her testimony that she has ninety to one hundred clients and handles a lot of court-appointed cases. Some of these individuals are in great need of competent legal services, and it may take more effort and diligence to meet with them in order to assure that their legal matters are being handled in a competent manner. While we understand that sometimes a lawyer’s personal problems require the lawyer’s utmost attention, this focus of a lawyer’s attention cannot come at the client’s expense. Rather, we are extremely concerned about the repetitive nature of Ms. Sturm’s conduct regardless of her personal problems. Ms. Sturm’s two prior admonishments failed to prevent her from repeating similar conduct.

Thus, a 90-day suspension followed with a period of supervision was imposed. (Mike Frisch)

April 8, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Non-Response As Consent

The District of Columbia Board on Professional Responsibility has blessed a consent to disbarment under somewhat unusual circumstances

Disciplinary Counsel seeks reconsideration of the Board’s December 28, 2015 order denying Disciplinary Counsel’s December 7, 2015 motion to accept Respondent’s consent to disbarment. After reviewing Disciplinary Counsel’s motion and Respondent’s December 7, 2015 affidavit declaring consent to disbarment, the motion was denied, because the affidavit raised a question whether Respondent’s consent was based on a mistake of law. Order, In re Henderson, Bar Docket Nos. 2014-D172 et al. (Dec. 28, 2015) (under seal).  The Board’s order permitted Disciplinary Counsel to file a renewed motion clarifying this issue.

In its motion for reconsideration, Disciplinary Counsel represents that Respondent agreed to submit a revised affidavit that would resolve the issue identified in the December 28 order, but that Respondent has not done so. Respondent has neither responded to Disciplinary Counsel’s motion for reconsideration, nor revoked his consent to disbarment by other means...

Upon consideration of Respondent’s affidavit declaring his consent to disbarment, Disciplinary Counsel’s representations in its motion for reconsideration, Respondent failure to respond to the motion for reconsideration, or to revoke his consent to disbarment by any other means, the Board, acting through its Chair, and pursuant to D.C. Bar R. XI, § 12(b) and Board Rule 16.2, recommends that the Court enter an order disbarring Respondent on consent pursuant to D.C. Bar R. XI, § 12(b).

If the affidavit was not sufficient, I am not sure how the attorney's subsequent non-participation is a cure. Nonetheless, if an attorney facing multiple complaints (here five( wants to end the process by agreeing to the ultimate sanction, why nitpick the affidavit?

The case is In re Reid Henderson and can be found at this link. (Mike Frisch)

April 8, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Thursday, April 7, 2016

Answer Please

A New York attorney convicted on plea of guilty of two felony counts of aggravated harassment was automatically disbarred as a result. He also resigned from practice.

The convictions were later vacated on the "sole basis that the underlying crimes were held to be unconstitutional by the [New York] Court of Appeals in an unrelated case."

The Albany Times Union reported on the criminal charges.

The decision describing the conduct but remanding the conviction in light of competency issues  is linked here.

Defendant was charged in an indictment with 11 counts of aggravated harassment in the second degree as a hate crime, after he made anonymous telephone calls to African-American residents of his neighborhood and used threatening language, profanity and racial epithets.

The attorney moved for reinstatement after the conviction was vacated. The motion was opposed  by the Committee on Professional Standards.

The Appellate Division for the Third Judicial Department held the reinstatement in abeyance while proceedings based on the underlying facts were commenced. On January 19, 2016, a petition of charges was filed. The attorney then moved to dismiss the petition.

Not so fast, held the court.

Respondent's motion to dismiss is founded primarily on his claim that the petition of charges is impermissibly based upon information and statements obtained from respondent's "now sealed criminal case." However, as this Court indicated in its June 2015 order directing commencement of the subject investigation, CPL 160.50 (1) (c) permits review of the record on appeal previously submitted to this Court in conjunction with People v Hennessey (supra). Accordingly, we find no basis to grant respondent's pre-answer motion to dismiss the petition of charges.

The attorney must now answer on the merits. (Mike Frisch)


April 7, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Power Of Attorney

The North Carolina State Bar has filed a complaint alleging misconduct in two criminal defense matters.

In one matter, the attorney represented an incarcerated defendant facing multiple charges. It is alleged that the attorney obtained a durable power of attorney from the client and had it improperly notarized outside the client's presence. The State Bar contends that the power of attorney created a conflict of interest.

It is also alleged that the attorney misrepresented that the client's wife was his "assistant" to allow her to "participate in an after-hours meeting with [the client] in the attorney visitation area."

In a second matter, it is alleged that the attorney used improper means (and false documents) to depose witnesses in two criminal cases without legal basis to do so. (Mike Frisch)

April 7, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Wednesday, April 6, 2016

Suspension For Lawyer Whose Client Guessed Email Password

The St. Louis Post-Dispatch reports

The Missouri Supreme Court on Tuesday suspended the law license of a part-time prosecutor and lawyer for a series of rules violations, including knowingly failing to disclose information that a client obtained by hacking into his estranged wife's email.

Joel B. Eisenstein, 70, can apply for the reinstatement of his law license in six months, the ruling says. Eisenstein has an office in St. Charles and is a part-time prosecutor in Lincoln County. He has also been a municipal judge and prosecutor in other jurisdictions. He has been a lawyer since 1974.

Missouri's Office of Chief Disciplinary Counsel sought a suspension of at least a year, citing the hacked information as well as claims that Eisenstein lied about it and threatened the wife's attorney.

Eisenstein's former client, Gregory J. Koch, accessed his wife's personal mail at least three times, downloading financial information and a list of questions that his wife's lawyer, Stephanie L. Jones, had prepared for trial. Koch, who died last year, guessed his wife's password and then gave the information to his lawyer, filings say.

Disciplinary officials claim Eisenstein failed to disclose the information to Jones, and then lied about it when Jones spotted the paper work and went to the judge in the case.

Eisenstein said he had never reviewed or used the document.

The court's opinion is linked here. The court states

Mr. Eisenstein asserts that any discipline should be mitigated by his lack of a dishonest or selfish motive. The ABA Standards indicate that a suspension is warranted where the lawyer knowingly and improperly withholds information. The lack of a dishonest or selfish motive is not dispositive. As established, the preponderance of the evidence demonstrates that Mr. Eisenstein knowingly retained the improperly obtained evidence and did not promptly disclose his receipt of that information so that protective measures could be employed.

Mr. Eisenstein also asserts that he suffers from post-traumatic distress syndrome due to his military service in Vietnam. Mr. Eisenstein does not elaborate on how this past military service in any way excuses the professional misconduct in this case. There are no mitigating factors.

Hat tip ABA Journal. (Mike Frisch)

April 6, 2016 in Bar Discipline & Process | Permalink | Comments (0)

A Judge But Not A Lawyer

A Colorado Hearing Board has denied reinstatement to an attorney admitted in 2010 and suspended for a year and a day for misconduct in several client matters.

Petitioner resolved to strike out on her own, and she established a solo practice in 2010, which she considers her "first mistake." In the main, her case load consisted of criminal and family law cases, but she dabbled in many different areas of substantive law in order to pay bills. She now recognizes that she was not "fully competent" to work as a solo practitioner. For instance, she said, she did not know that she was required to file motions to withdraw in domestic relations cases after divorces were finalized; as a result, she remained attorney of record for several post-dissolution matters, regardless of whether she intended to continue those representations. She also acknowledged that she was not competent to handle the Roche real estate matter, which she failed to realize was "out of her league."

She moved from Colorado to  to New Mexico and took a job

At the Branch firm, Petitioner recalled, she began to appreciate the importance of supervision and the need to ask for help and guidance. Branch’s systems—including those for calendaring, organization, and communication management—helped illuminate, she said, the "difference between what I was doing wrong and what I do now." But it was during Petitioner’s time at Branch that she actively avoided emails and telephone calls from her Colorado clients. She explained that when she received these communications she felt overwhelmed and decided simply to ignore them.

But the Colorado violations led to her suspension there and reciprocally in New Mexico.

After resigning from Branch, Petitioner was unemployed until July 2014, when she took a position as field tax auditor with the State of New Mexico’s Department of Workforce Solutions. A few months later she applied for a position as an administrative law judge (“ALJ”) in the same department. She was hired in October 2014 and has held the position ever since.

Though the ALJ position does not require a law degree, Petitioner related how her job draws on many of the same analytic skills and ethical considerations as the practice of law. Petitioner presides over hearings involving appeals of unemployment benefit decisions. She rules on pretrial and evidentiary matters, and she issues findings of fact and legal conclusions. The position comes with oversight and accountability, and she believes she is good at her job; she testified that she was named employee of the month in July 2015. Petitioner plans to continue in her role as ALJ for the foreseeable future. “I am happy where I am,” she testified, “but that doesn’t mean I don’t want my license back.” She is aware that a law license opens doors and allows for career advancement in the state and federal systems. She also wants to regain her license for “emotional, financial, and personal reasons.”

Petitioner testified that since her suspension she has taken several classes in tax and business law at a local community college and was certified to file individual federal tax returns for others. She does not read bar periodicals or legal journals, nor does she belong to a bar association or otherwise have a mentor in the legal profession. She took one continuing legal education (“CLE”) course in 2014 and reviewed an ethics video to meet New Mexico requirements. In 2015, she says, she accumulated eleven general CLE credits and seven ethics CLE credits in Colorado, as well as thirteen-and-a-half general and four ethics credits in New Mexico. Petitioner related that she chose CLE courses that would enhance her practice of law, with a focus on ethics and business management issues. She did not offer any evidence to support her testimony.

Since moving back to New Mexico, Petitioner testified, she has taken measures to better herself through education and self-healing. Her family has a history of depression, and she has worked to take care of herself, eliminate stress, and reduce anxiety through running, meditation, yoga, faith-based healing, and helping others. She has returned to her church, where she teaches first- and second-grade catechism once a week. She volunteers with Big Brothers Big Sisters of New Mexico. For more than two years, she has met with her seven-year-old “little sister” for a few hours every other week. In 2014, she was assigned a high-school mentee through a program called Mentor 2.0, which pairs high school students with community members for encouragement and guidance. And in September 2015, she began volunteering with Wings for Life, a program that provides assistance for family members of prisoners. Through this group Petitioner has tutored children and raised funds; she recently was voted to the board of directors. Petitioner affirmed that being involved in the community is very important to her, and she plans to continue to volunteer whether or not she is reinstated.

The Hearing Board

Regrettably, considering the totality of the evidence and the testimony presented, the Hearing Board concludes that Petitioner has not proved her rehabilitation by clear and convincing evidence. We do not see a regeneration of her character, a turn-around in her perspective, or a notable difference in her approach to tackling difficult tasks. Petitioner appears to be thriving in her chosen profession, but we fear that removed from those environs she would be as unprepared to represent clients as she was in 2011 through 2013. For these reasons, we cannot find that she is unlikely to repeat her past misconduct.

(Mike Frisch)


April 6, 2016 in Bar Discipline & Process | Permalink | Comments (0)