Monday, May 7, 2018

Financial Misconduct Leads To Disbarment

The Georgia Supreme Court has disbarred an attorney

All three matters are related to Doeve’s representation of Vivify Holdings, Inc. and Jason Herring, one of Vivify’s corporate officers. The facts, as found by the special master and supported by the record, are as follows: In SDBD No. 6851, Doeve agreed to act as escrow agent for a $100,000 investment that an investor wished to make in Vivify. Doeve agreed not to disburse the funds without the investor’s approval. However, Doeve disbursed the funds to Vivify the same day the funds were wired to his trust account. Doeve failed to communicate with the investor to confirm receipt of the funds or disbursement of the funds and failed to respond to the investor’s inquiries and to provide an accounting.

In SDBD No. 6853, Doeve agreed to represent a former client in obtaining funds owed by Herring. He also agreed to assist the former client’s husband, the husband’s company, and the former client’s lawyer in obtaining funds owed by Herring. Doeve and Herring falsely represented to these individuals that Herring had $2,000,000 in available funds and that Herring had deposited $460,000 into Doeve’s Chase Private Client account, which was not a trust account; Doeve wrote checks totaling $460,000 to the former client and others from the Chase account, but those checks were returned for insufficient funds. Doeve failed to provide an accounting and provided misleading information about the cause of the non-payment and when they could expect to be paid. Doeve also provided misleading information regarding this matter in the Bar disciplinary proceedings.

In SDBD No. 6854, Doeve agreed to assist Herring in paying legal fees to a lawyer who had represented Herring’s girlfriend. An intermediary was needed because the lawyer would not accept Herring’s check since Herring had previously provided the lawyer with an insufficient funds check. Doeve misled the lawyer about whether he had received funds from Herring, and although Doeve later agreed to pay the lawyer $15,000, he wrote the lawyer an insufficient-funds check from an account that was not a trust account. Doeve continued to mislead the lawyer about the cause for the returned check and when he could expect to be paid.

The attorney had sought to "tender his license," (Mike Frisch)

May 7, 2018 in Bar Discipline & Process | Permalink | Comments (0)


Disbarment on default should be imposed for an attorney's conviction, according to the report of the California State Bar Court Hearing Department

Respondent was convicted of one felony Violation of Penal Code section 273.5(a) (corporal injury to a spouse/cohabitant/child’s parent). Enhancements to this conviction included Respondent’s use of a deadly weapon (Penal Code section 12022(b)(1)) and infliction of great bodily injury (Penal Code section 12022.7(e)).

The court finds that the facts and circumstances surrounding Respondent’s conviction involve moral tuxpitude. On or about December 2, 2011, Respondent and his girlfriend of ten years had several arguments culminating with Respondent stabbing her with a knife in the stomach, cutting her colon. As a result, Respondent’s girlfriend underwent two surgeries and spent five days in the hospital.

Northern California Record reported on the recommendation.

He had proper notice

now-Senior Attorney Elizabeth Stine located Respondent at the Valley State Prison in Chowchilla, California. Ms. Stine communicated with Respondent by mail. Respondent requested ~ through a letter to Ms. Stine — that the present proceedings be continued. Ms. Stine replied to Respondent’s letter and advised him that he needed to file a response to the notice of hearing on conviction.

Respondent failed to file a response to the notice of hearing on conviction. On July 18, 2014, the State Bar properly filed and served a motion for entry of Respondent’s default. Respondent did not file a response to the motion; however, due to his incarceration, this court abated these proceedings on August 29, 2014. This matter remained in abatement for the next three years.

On July 27, 2017, Ms. Stine discovered that Respondent was no longer incarcerated. Thereafter, Ms. Stine attempted to locate and communicate with Respondent by: (1) conducting a LexisNexis people search; and (2) calling and leaving a Voicemail for Respondent at a possible alternative telephone number identified through the LexisNexis search.  Despite these efforts, Respondent never filed a response to the notice of hearing on conviction. On October 30, 2017, this matter was unabated.

(Mike Frisch)

May 7, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Sunday, May 6, 2018

Courtroom Punch Leads To Conviction, Interim Suspension

An interim suspension has been ordered by the Michigan Attorney Discipline Board for a felony conviction.

The arrest was reported by the Detroit Free Press

A Macomb County defense attorney now needs an attorney himself after he was accused of punching a Roseville police officer during a confrontation in district court.

Nijad G. Mehanna, 41, of Roseville was arraigned today  on charges of assaulting, resisting, obstructing a police officer, a two-year felony, and misdemeanor assault, Roseville police said. Mehanna stood mute to the charges and was released after posting  $10,000 cash or surety bond, police said.

A probable cause conference was set for March 30 and a preliminary examination is scheduled for April 6, according to the court.

Mehanna was in 39th District Court in Roseville about 11:30 a.m. Wednesday representing someone in a drug case when he had words with the detective lieutenant in charge of the case over his access to a codefendant of his client, police said.

The two exchanged insults when witnesses in the courtroom said Mehanna walked up to the officer, pushed him in the chest and tried to push past him into a restricted office area, police said.

 They said when Mehanna found his way blocked into the office area, he allegedly, without warning, struck the officer in the face with his fist. Then, police said, Mehanna threw several more punches before being wrestled to the ground by the officer and district court officers.

The officer sustained several loose teeth, a fat lip and a bloody nose from the attack, police said. Mehanna was not injured.

Mehanna was taken into custody and held without bond at the police lockup pending arraignment.

Neither Mehanna nor an attorney listed for him with the court could be immediately reached today.

Roseville Police Chief James Berlin said police had no prior incidents involving Mehanna, which is why the incident took everyone back a little.

Berlin said people have lost their tempers in court before.

"We've had some pushing matches and shouting matches, but no punches thrown," he said.

Mehanna is an attorney in active and good standing, according to the State Bar of Michigan website, which lists him as being admitted in November 2000.

He was recently in a high-profile case in Macomb County in which he represented the mother of an 11-month-old girl who died in 2013 after she ingested a prescription morphine pill.

From the order

Upon the filing of a certified judgment of conviction, this matter will be assigned to a hearing panel for further proceedings. The interim suspension will remain in effect until the effective date of an order filed by a hearing panel.

(Mike Frisch)

May 6, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Surrender Or Revocation?

Surrender of license rather than revocation has been accepted by the Tribunal Hearing Division of the Law Society of Upper Canada

Mr. Fine acted on 21 real estate transactions in a condominium project located in Welland. Of those 21 transactions, 18 were completed on the same day in March 2012, one a few days later, and two in 2013.

The parties have entered into an Agreed Statement of Facts in which it is agreed that all of these 21 transactions were fraudulent. The Agreed Statement of Facts provides ample detail supporting this conclusion.

While Mr. Fine denies actual knowledge, he admits to being wilfully blind to fraud as alleged...

On sanction

 it is clear from our jurisprudence that there is a difference between the exceptional circumstances required to allow a penalty other than termination, such as a lengthy suspension where a lawyer retains the ability to practise, and the penalty of surrender, where he does not. The Appeal Division has made it clear that revocation, rather than surrender, is the norm and that any lesser penalty requires exceptional circumstances. Permission to surrender, however, which still results in termination, requires “less exceptional” circumstances than do penalties not involving termination. In Bishop and Abbott, courts have made clear how exceptional the circumstances must be to justify a penalty that does not involve termination...

  The Law Society offers two key mitigating factors in support of the joint submission for permission to surrender. The first is Mr. Fine’s admissions and acceptance of responsibility. The second is the psychological and other evidence which puts the misconduct in context.

These mitigating factors are analogous to those in Molson. Mr. Molson admitted knowing participation in fraud and other forms of professional misconduct. He led psychiatric evidence of low self-esteem and dependent personality traits that explained, but did not excuse, his misconduct.

Here, Mr. Fine’s admission of professional misconduct is a significant mitigating factor. Acceptance of responsibility is important and difficult for a respondent, especially when the misconduct is serious. Entering into an Agreed Statement of Facts and admitting professional misconduct avoids the expense of a hearing on the merits and potential inconvenience for third-party witnesses. As prior cases make clear, proving knowing assistance in fraudulent transactions can be very costly for the Law Society and, as a result, for licensees. It is important that the Law Society have the ability, where appropriate, to negotiate a penalty that is more acceptable to a respondent than revocation, but which nonetheless terminates the respondent’s licence to practise.

The second mitigating factor arises from evidence, including from his family doctor and treating psychiatrist, of Mr. Fine’s personal circumstances. His family doctor describes a number of significant stresses experienced by Mr. Fine in respect of his own health and that of his family. While it is unnecessary to detail these health concerns, it is clear that Mr. Fine faced serious stressors. According to the family doctor, Mr. Fine was in a depression in 2012 and unaware of the extent to which the depression was affecting him. Mr. Fine first sought help from his family doctor in late 2012, as a result of which an anti-depressant and an anxiolytic were prescribed and counselling recommended.

Mr. Fine was referred by his family doctor to a psychiatrist in 2014. In late 2015 and in mid-2016, his psychiatrist reported weekly attendance by Mr. Fine, hard work in therapy and some improvement. 

It is true that the medical evidence is limited and dated. However, it provides some support for Mr. Fine’s evidence that he was not “into critical thinking for myself and by that time, was a workaholic.” Current evidence as to Mr. Fine’s past medical condition would not be particularly useful. Mr. Fine’s effective submission is that his judgment in respect of these transactions was compromised by medical issues and personal factors. There is evidence supporting this submission which is not challenged by the Law Society.

The Law Society also notes for the record that the total amount at risk in the fraud was in excess of $2.2 million, but that it appears that the ultimate loss was quite limited. The time frame of the frauds was reasonably limited, with the substantial majority of the transactions having been closed over a short time. There were also a number of conduct breaches in addition to knowing assistance. As well, Mr. Fine had the benefit of advisories warning against the red flags of fraud, and had previously been reprimanded for failure to co-operate in the context of the same depression and anxiety issues mentioned above. While all of these factors are relevant, we agree with the Law Society that they are less important than the key mitigating factors described above.

Taking into account Mr. Fine’s admissions, his acceptance of responsibility, the evidence of relevant medical issues and personal factors and, most importantly, the fact that Mr. Fine will leave the practice of law, we cannot conclude that surrender is a truly unreasonable or unconscionable penalty. Specific and general deterrence are fully served by loss of licence. Rehabilitation is not a penalty objective in this context. Public confidence in the profession is maintained by the loss of licence of those who knowingly assist in fraud. There is value in recognizing mitigating circumstances including consensual resolution of conduct proceedings.

I have had the benefit of reading Mr. Lerner’s dissenting reasons. I accept that exceptional circumstances have not been demonstrated as discussed in MuchaBishop and Abbott. But, as discussed above, the proposed penalty is not a suspension but rather loss of licence by surrender. In my view, taking into account the applicable jurisprudence and the circumstances of this case, a suspension would indeed be unreasonable or unconscionable, but loss of licence by surrender (as opposed to revocation) is not.

Accordingly, we accepted the joint submission...

Michael Lerner dissented and would revoke

The public interest demands that the presumptive penalty be imposed. The fact that there has been a joint submission is important and should be accepted if it is within the reasonable range; however, with mortgage fraud there is no range but rather a presumptive penalty that can only be displaced with the opportunity to surrender one’s licence if there are “exceptional circumstances.”

As such, unless the Lawyer has demonstrated circumstances that can reasonably be considered exceptional, the penalty must be revocation.

As stated above, the Lawyer provided us with dated medical reports pertaining to a timeframe subsequent to the commission of the misconduct and referred to personal and family matters that can be described as life cycle events to which everyone is exposed. These mitigating factors are weak at best. In contrast, the fact that the Lawyer knowingly participated in 21 fraudulent transactions is  significantly aggravating. In my view the mitigating factors do not rise to the required threshold of exceptionality as set out in BishopMucha and Abbott.

When considering all of the factors, both mitigating and aggravating – and most importantly, the need to maintain the public’s confidence and trust that the profession can self-regulate, as well as serving as a general deterrent to like-minded members of the profession – in the absence of exceptional circumstances, I do not find the joint submission a sufficient basis to avoid the presumptive penalty. I would therefore revoke the Lawyer’s licence.

 I do not believe that a reasonable person, fully and properly informed of all of the facts and circumstances that exist in this case, would consider it reasonable for this lawyer to be permitted to surrender his licence.

(Mike Frisch)

May 6, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Saturday, May 5, 2018

Less Than Disbarment For Insider Trading

The Tennessee Supreme Court ordered suspension rather than disbarment for an insider trading conviction.

James Carl Cope is an attorney originally licensed to practice law in Tennessee in 1974. On October 21, 2016, Mr. Cope pleaded guilty in federal district court to one count of the felony offense of insider trading in violation of United States Code title 15, section 78j(b) and Code of Federal Regulations title 17, section 240.10b-5.1 The federal court ultimately sentenced him to twenty-four months of probation, the first nine months of which required home confinement, with a fine of $200,000.

He was suspended shortly after the plea.

We first consider the facts of this case. Mr. Cope’s conduct was essentially limited to one instance, although the intended purchase of 10,000 shares took two separate days to complete. He did not share the non-public information with anyone else, and he did not attempt to hide his action. His unrealized profits amounted to approximately $56,000, which he has disgorged in addition to paying a $200,000 fine. He has had no other disciplinary actions in his lengthy career.

The court declined to impose disbarment and

we conclude that the circumstances justify the imposition of a term of suspension rather than that of disbarment in this case because, inter alia, Mr. Cope has had no other disciplinary actions in his career, his criminal conduct was atypical, and his conduct did not injure his clients. In addition, the Panel’s imposition of a term of suspension of twenty-five months is appropriate because Mr. Cope’s conduct was somewhat less egregious than that of other attorneys who received lengthier suspensions, particularly in the Lockett case wherein the criminal conduct spanned three years and directly impacted the attorney’s firm. See Lockett, 380 S.W.3d at 21-22. However, in the interest of maintaining uniformity in attorney sanctions, Mr. Cope’s suspension must be prospective rather than retroactive to the date of his initial suspension by this Court in October 2016. If Mr. Cope’s suspension were retroactive, the total length of his suspension would only be twenty-five months, half of what other attorneys in similar cases (even those whose suspension was also retroactive) received. Because a retroactive suspension would be a drastic departure from the length of the sanctions imposed in prior cases, we modify the Panel’s judgment to impose a twenty five-month suspension prospectively from the filing of this opinion.

Daily News Journal reported on the conviction and noted his resignation as county attorney

Longtime county attorney Jim Cope has resigned, County Mayor Ernest Burgess announced in an email to The Daily News Journal Thursday.

"Yesterday afternoon, I received notice from Jim Cope of his resignation as the [Rutherford] County Attorney effective Oct. 19, 2016," Burgess said in an email shared with County Commissioners. "I want to express publicly to Mr. Cope my sincere thanks and appreciation for his many years of dedicated, wise and professional counsel to Rutherford County."

(Mike Frisch)

May 5, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Friday, May 4, 2018

Blue Jay No Way

The Toronto Star reported  on a lawyer advertising issue

A personal injury law firm that billed itself as the Toronto Blue Jays’ “official” injury lawyers is changing the way it advertises after Ontario’s legal regulator reminded the firm it never worked for the team.

Preszler Law Firm has removed the claim that it was the “Official Personal Injury Firm of the Toronto Blue Jays” from TTC ads, according to a summary of a recent meeting between the Law Society of Ontario and the firm’s managing partner, David Preszler.

The claim was dropped before a regulatory meeting last month to address allegations that Preszler “engaged in improper advertising.” The firm’s marketing also includes ubiquitous television and print ads featuring a distinguished-looking white-haired man, who, as the Star reported last year, is actually an actor.

Preszler, the firm’s managing partner, told the Star in an email that the firm co-operated fully with the law society’s investigation and that no formal discipline was warranted. He said his firm continues to be “proud sponsors” of the Jays but is no longer allowed to call itself the “official personal injury law firm” of the team.

The law society summary, published in a weekly newsletter, notes that the firm and the baseball team had a “sponsorship agreement” and that “the firm never provided legal services to the Toronto Blue Jays.”

It also says the firm, in calling itself the ball club’s official lawyers, and not identifying the spokesperson as an actor, “might mislead, confuse or deceive.” Although the ads did not claim he was a lawyer, “they did not identify him as a spokesperson either.”

More than a year ago, the Star reported that the spokesperson was actor John Fraser, who has appeared in commercials for J.P. Wiser’s Whisky, Tylenol and also appeared in the 1997 movie Good Will Hunting, starring Matt Damon and the late Robin Williams.

The firm now identifies Fraser as a “spokesperson” and “not a lawyer,” on its website, and is editing its ads to include a similar disclaimer. The changes were made around the time the law society began investigating the firm’s advertising practices.

Preszler would not comment about the meeting, but said, “No adverse findings were made against either myself or my firm; formal disciplinary proceedings were not warranted; my firm fully complied with the (law society) investigation; no public complaint has ever been made about my firms marketing/advertizing and this investigation arose only as a result an internal (law society) investigation.”

The firm has pasted a short biography of Fraser on its website.

“John Fraser is not a lawyer,” it reads. “He is the proud spokesperson and marketing associate of Preszler Law Firm. Since 2006, he has helped the firm deliver a positive message relating to access to justice.”

The meeting summary also says Preszler told the law society a disclaimer about Fraser has been added to television advertisements, and that TTC ads with the Blue Jays designation have been taken down and references to the firm’s sponsorship in internet ads have been removed.

Members of the law society committee agreed that the discussion with Preszler was “useful, and that the process made it unlikely that there would be marketing by the firm that might mislead, confuse or deceive in the future,” according to the meeting summary.

A Toronto Blue Jays spokesperson, Sebastian Gatica, told the Star in an email that the team could not comment, but that Preszler is still a sponsor of the Jays.

Title reference anyone? (Mike Frisch)

May 4, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Late Fee $100

The Kansas Supreme Court has suspended an attorney for one year as a consequence of his practice after an administrative suspension.

His annual dues payment arrived late and a $100 late fee was assessed but unpaid.

He was suspended for his failure to pay the late fee as the Hearing Panel found

On October 14, 2015, prior to 10:48 a.m., the respondent called the Clerk of the Appellate Courts and spoke with Debbie Uhl. During the conversation, the respondent stated that he had mailed the registration form and fee in plenty of time to arrive before August 3, 2015, that he had received the notice regarding the late fee, and that he did not believe that he owed the late fee, so he did not send it.

At the hearing on this matter, the witnesses' testimony varied regarding what Ms. Uhl stated during the telephone conversation. Based on all the evidence presented to the hearing panel, the hearing panel concludes that Ms. Uhl informed the respondent that the Supreme Court had suspended the respondent's license to practice law. Ms. Uhl asked the respondent if he had received the order of suspension. The respondent indicated that he had not received the order of suspension. Thus, despite the fact that the respondent had not yet signed for the certified mail, he had actual knowledge that his license was suspended on October 14, 2015.

After the respondent's license to practice law was suspended, the respondent continued to practice law in multiple cases...

He self-reported to the Bar but

In his written correspondence to the disciplinary administrator's office during the investigation as well as throughout the disciplinary proceedings, the respondent misrepresented facts stated and omitted facts necessary to prevent a misapprehension of the facts. During his closing argument, the respondent acknowledged that he has emotional difficulty handling the truth:

'With respect to the conversation with Ms. Uhl, I didn't call because I received notice, I called because I had sent out a late fee. Whether you choose to believe that or not, you're going to believe what you believe, but that was the purpose of the conversation. I think it could be interpreted either way, but I was calling to say, you know, I sent in a late fee, I'm trying to avoid the late fee before suspension comes out, is there a way for me to deal with this? I haven't gotten a suspension order, but I'd like to
be able to deal before I do.

'. . . I—in hindsight, hindsight is 20/20, there's a lot of things I could have done. But when you're in the moment, you act, sometimes in desperation, sometimes out of panic. You don't set out to do anything wrong. You don't set out intentionally— this wasn't like I was going in to rob a bank, any plan like that. This is something that came as a bit of a surprise, and I tried to protect my client. I was acting in their behalf. At least that was my intention. This was not something I was doing for myself.

'I was dishonest with regards to acting on behalf of my client where I knew that the license had been suspended, but the prior week it was more negligent. This wasn't something that I actually knew. It's something that I should have known, perhaps should have made myself aware of, should have thought through. Again, hindsight is 20/20, and you kick yourself every time you think of what should have happened.

The court found the explanations were dishonest and noted a disciplinary matter from Idaho

"Well, we got to go back to the 1990s. In addition to my practice of law, I did have a side business, which I don't have anymore, and I wouldn't have anymore, 'um, and it was basically, it was a portrait photographer. I had a very attractive client who had indicated to me that she was—she had—I think she had been a model, or mom had been a  model, or something like that. Came out I was—I did the photography, and she approached me about taking pictures with her children and—that would be nude. 'Um, I agreed to that.  In fact, eagerly. 'Um, and, you know, in hindsight, I think that this was probably something that was maybe in her head in a theoretical, but I pressed, you want to do this, you want to do this, you want to do this, and we did. It was a horrible incident. The kids were—she had twin boys that were infants and they were, 'um, not wanting any of this to happen. And, 'um, I was still interested in—in doing this, and I took pictures of her, as well as tried to get pictures with her and the boys.

"'Um, at first this was not something that caused a problem with her, at least that's what I understood. I continued to represent her for a number of months thereafter. And then her case went south, largely because of a recommendation of a child custody investigation that found that she would be—that the father, the husband, should be primarily—the primary caregiver for the children, and I think that that led her to blame me. It came out that this had happened. I had admitted it. I had understood—at least understood in hindsight, this is something that was consensual, but came to realize, no, I was probably pushing her to do this. 'Um, and I admitted it and it resulted in a period of suspension."

The Casper Star Tribune had the story of the prior discipline

An Idaho judge declared a mistrial in a child sex-abuse case after he discovered the lawyer representing the defendant had lost his license after having another client pose for nude photographs as partial payment of his fees.

Sixth District Judge Ron Bush discovered Pocatello attorney Curtis Holmes had lost his license right after he completed opening arguments Wednesday in the trial of Joseph Turner, charged with lewd conduct with a 7-year-old girl.

Bush declared a mistrial. Chief Deputy Prosecutor Dennis Wilkinson said the development upset the family of the victim, who was scheduled to testify Wednesday afternoon.

 "We're just putting this little girl through a lot," Wilkinson said.

No new trial date has been set.

According to a Monday order from the Idaho State Bar Professional Conduct Board, Holmes' license was suspended for 11 months for violations of professional ethics rules. Holmes also is required to undergo therapy for inappropriate sexual behavior before he is reinstated.

The order resolved a 2003 bar complaint against Holmes that said he sexually harassed a law clerk in 2000 and incompetently handled a wrongful death case in 2001.

The complaint also alleged conflict of interest and conduct prejudicial to the administration of justice in Holmes' representation of a client in a 1999 divorce case. According to the bar complaint, Holmes told the woman he was an amateur photographer and would be willing to pay her or reduce the amount of her $2,000 legal bill if she allowed him to take pictures of her and her children for entry in a state fair photo contest.

The woman said when she arrived at his house, he instead wanted to take nude photographs of her while the children waited in another room, according to the complaint.

"Fearing that she would be unable to obtain new counsel if she angered (Holmes), (the woman) allowed him to take nearly an entire roll of nude photographs," the complaint said.

He had the photos developed and showed them to her, the complaint says.

Later, when she needed his representation for a deposition in the divorce, the complaint says Holmes offered to take more pictures to cover his fees.

 The woman refused and he subsequently refused to return her phone calls. She eventually represented herself in the divorce settlement.

In his response to the complaint, Holmes said the woman asked him to photograph her nude with her twin toddler sons and that he never discussed reduced legal fees.

"The photographs were all tastefully and artfully done, and included a number of shots of (the woman) in traditional neoclassical poses," Holmes wrote.

In court Wednesday, Holmes told the judge he did not realize he was practicing law without a license because he had not been aware the suspension order was issued.

Asked about his suspension as he left the courtroom, Holmes told the Idaho State Journal: "This was a personal matter. It had nothing to do with my practice."

Sanction here

Considering all the facts and circumstances of this case, and in deference to the panel that heard the evidence before it, we adopt the panel's recommendation and impose a one-year suspension from the practice of law. A minority of the court would adopt the disciplinary administrator's six-month suspension recommendation.

Oral argument video is linked here.  (Mike Frisch)

May 4, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Thursday, May 3, 2018

Disbarred But Not Permanent

The Louisiana Supreme Court has disbarred an attorney involved in multiple run-ins with the law including a series of driving under the influence incidents

One incident

In September 2014, respondent was staying at the Extended Stay America Hotel in Metairie, Louisiana. Several times during her stay, the hotel’s staff requested that respondent refrain from smoking in her non-smoking room. When she failed to stop smoking in the room, the hotel’s staff asked her to leave. She failed to leave, and she was arrested on charges of entry/remaining after forbidden. The charges were later amended to a loud noise charge, and on September 17, 2015, respondent pleaded guilty to the amended charges.


In November 2014, respondent was arrested by the Slidell Police Department on two outstanding warrants. While incarcerated, respondent became combative with the corrections officers and suffered injuries. Respondent requested to be taken to the hospital, and after arriving at the hospital, she tried several times to leave her bed, ignoring the corrections officer’s commands to stay in the bed. When the corrections officer attempted to handcuff respondent to the bed, she attempted to bite his forearm. Respondent was charged with simple assault and pleaded guilty to the charge on December 8, 2015.

The court

The evidence in the record of this deemed admitted matter supports a finding that respondent was arrested for DWI in Louisiana and then failed to appear for the related trial, pleaded no contest to driving under the influence in Mississippi and then failed to pay the associated fines and court costs, forged her criminal attorney’s signature on a motion and filed the motion with the court, pleaded guilty to a loud noise charge after being arrested for failing to leave a hotel upon multiple requests to do so by the hotel’s staff, pleaded guilty to simple assault after attempting to bite a corrections officer, and failed to cooperate with the ODC in its investigations. Based on these facts, respondent violated the Rules of Professional Conduct as found by the disciplinary board...

We agree with the aggravating factors found by the board. However, regarding mitigating factors, we disagree that none are present. At the very least, respondent’s multiple DWI offenses suggest the possibility of a substance abuse problem, and the police reports included in the record of this matter reflect conduct which suggests respondent may be suffering from mental health issues (e.g., banging her head against the cage of the police car and attempting to bite a corrections officer  who was trying to handcuff her). Since respondent allowed the formal charges to be deemed admitted, we have no way of knowing whether she has since sought treatment for these problems. Under these circumstances, we are reluctant to permanently prohibit respondent from seeking readmission to the practice of law.

Accordingly, we will accept the board’s recommendation and disbar respondent.

Justice Crichton dissented

Respondent has also never addressed any of the serious formal charges against her and has failed to appear on each occasion offered to her. In my view, respondent’s blatant disregard for the law, her abhorrent disrespect for the lawyer disciplinary process, and her consistent display of willful disobedience places her directly in the guidelines for permanent disbarment...

While I am ever sensitive to substance abuse and mental health issues in the attorney disciplinary process, because of respondent’s failure to participate in her own defense, the record here is devoid of even a scintilla of mitigation evidence. By reading potential mitigating factors into the record, the Court is whittling away at the significance of those respondents who come before us with true substance abuse and mental health issues and who display a sincere desire (and corresponding efforts) for rehabilitation. For this reason, I would permanently disbar respondent and forever disallow her from seeking readmission to the practice of law in Louisiana.

(Mike Frisch)

May 3, 2018 in Bar Discipline & Process | Permalink | Comments (0)

No Bar Sanction For Resigned Nebraska Justice

There are reports that the Nebraska Counsel for Discipline will not pursue ethics charges against a former and recently-resigned  Supreme Court Justice

The Omaha World-Herald reported on the resignation

Nebraska Supreme Court Judge Max Kelch’s abrupt resignation last month came in the face of an ethics investigation, two officials told The World-Herald.

The officials wouldn’t discuss details, but one said the allegations against Kelch are in line with the national #MeToo movement that has resulted in resignations of actors, politicians, business executives and judges over questions of sexual misconduct. Attorneys and former colleagues — including two women — told The World-Herald that Kelch’s judicial career has been pocked with sexual comments to women.

Kelch, 60, resigned Jan. 23 — less than two years after his appointment to the bench — rather than undergo an inquiry, according to the officials.

 Nebraska Gov. Pete Ricketts was unaware of any complaints or allegations against Kelch before his appointment to the Supreme Court in March 2016, said Taylor Gage, the governor’s spokesman.

“Of course the governor would not appoint someone with a known history of sexual harassment,” Gage said.

Kelch’s resignation has caused a stir in the hallways of the Capitol and in courthouses across the state. From the floor of the Legislature on Friday, State Sen. Ernie Chambers called on Chief Justice Mike Heavican and Kelch to explain Kelch’s departure, saying it had the potential to be “an impending, overhanging scandal.”

Former colleagues were staggered by the turn of events. Just last fall, a colleague said, Kelch had told people that he expected to become the state’s next chief justice, once Heavican retires. Yet a few months later, he walked away — a move that, because of his limited longevity, will significantly cost him on his pension.

Sarpy County Attorney Lee Polikov, who knew Kelch from the judge’s decadelong tenure in Sarpy, said he had never witnessed any untoward behavior by Kelch.

“He was a great county judge, a great district judge and was destined to be a great Supreme Court judge,” Polikov said. “It’s a shock.”

It’s less of a shock to those who knew another side of Kelch.

Two women who spoke to The World-Herald said Kelch had a strange, at-times suggestive manner. Neither woman said she would consider herself a #MeToo victim, but said Kelch’s comments could be a bit mind-boggling. One said he was sometimes too close for comfort in his chambers, leading the woman to joke about wanting a witness with her when she went to his office. The other said she once heard Kelch ask a petite female staffer in a public hallway about her bodybuilder boyfriend.

“How do you have sex with him?” Kelch asked in front of a number of people, according to the woman. “I would think he would break you in half.”

The staffer at the center of that comment didn’t return messages from The World-Herald.

Kelch also didn’t respond to requests for comment. When he resigned last month, Kelch sent a two-sentence letter to Ricketts that said “it is best for my family to submit my resignation.” Kelch and his wife have a son who is in his early 20s.

Nebraska State Court Administrator Corey Steel declined to comment and said Heavican would have no comment. Steel, who also serves on the Judicial Qualifications Commission, said the law prevents him from saying whether a complaint has been filed. In general, a complaint becomes public only after the commission decides to take disciplinary action against a judge.

The commission’s authority over the conduct of a judge ends upon their retirements or resignations, Steel added.

Nebraska Code of Judicial Conduct says judges shall uphold and promote the independence, integrity and impartiality of the judiciary, and shall avoid even the appearance of impropriety.

Additional language in the code says it applies to both the professional and personal conduct of judges. In addition, judges must accept they will be “subject to public scrutiny that might be viewed as burdensome if applied to other citizens.”

In response to a public records request by The World-Herald, the Governor’s Office released a file of 50 emails and letters submitted after Kelch was named a finalist for the high court. Most talked about Kelch’s impressive capacity for work, his impeccable judicial temperament and his fidelity to the law. A few made mentions of high personal character, and none offered any warnings.

“The first the governor became aware of any concern was when Judge Kelch contacted the governor to say there was a complaint filed against him,” Gage said. “Judge Kelch subsequently stepped down.”

Several colleagues praised Kelch’s work ethic, listening ability and pleasant demeanor, even as they described him as “socially awkward.”

Early in his law career, Kelch has told others, he once questioned the sexual orientation of his boss in front of the boss and other colleagues — an exchange that affected their relationship. Later, after he became a judge, Kelch encouraged a female attorney to apply for a judgeship. The woman said she thought she would enjoy the job and possessed the skills it required — and remarked that it was probably time to have a woman on the bench.

“Oh believe me,” he said, “everyone knows you’re a woman.”

Those comments stand in contrast to the serious, measured jurist in court. One longtime public defender called Kelch’s preparation for cases and legal research skills “legendary.”

In a pointed monologue on the floor of the Legislature on Friday, Chambers said he would demand answers as to why Kelch stepped down.

“I’m going to write the Chief Justice a letter and I’m going to say ‘Chief, you can hide the fire, but what are you going to do with the smoke? And when there’s so much smoke attending the departure of this judge, it doesn’t just affect him, it infects the integrity of the Nebraska Supreme Court,’ ” Chambers said.

Throughout his four decades as a lawmaker, the Omaha senator has pursued professional complaints against judges, some of which have resulted in removal, resignation or retirement. Chambers has balked at judges resigning in the midst of ethical inquiries, arguing that such investigations should be completed before a judge can receive retirement benefits.

In an interview, Chambers said his floor comments were based on credible information, but he declined to go into detail.


“I’m beginning to detect an odor that unfortunately smells very familiar,” Chambers said.

The prospect of a public fight over allegations may have factored into Kelch’s decision to resign, a court official said.

“Max is a worrier,” the official said. “His mind is grinding all the time.”

Kelch made $171,975 annually. His sudden retirement will cost him in terms of pension. With about 13 years on the bench, Kelch was seven years away from receiving a full pension — 70 percent of his annual salary.

He would be eligible for about 30 percent of his annual salary right now, according to estimates. If he waited to collect a pension until he’s 65, he would receive about half of his annual salary.

Steel, the court administrator, said the resignation would not have an impact on Kelch’s ability to receive a pension.

Those who recommended Kelch to the governor two years ago described him as humble, helpful, learned, fair, extremely hard-working, “always a gentleman” and “nothing if not professional.”

The woman who heard Kelch’s break-in-half comment said it contrasted with his courtroom demeanor.

“As a judge, you knew he was prepared every time he stepped on the bench,” she said. “I thought he was a really good trial judge. He was just so black and white about everything — very decisive.

“It’s just surprising to me that he didn’t apply the same black-and-white filter ... outside court.”

(Mike Frisch)

May 3, 2018 in Bar Discipline & Process, Judicial Ethics and the Courts | Permalink | Comments (0)

After The Rush

A 2011 Michigan conviction of an attorney has led to a recommendation for disbarment by the California State Bar Court Hearing Department.

The attorney had given out his telephone number claiming to seek employees to clean out apartments he owned in Flint. An unemployed 18-year-old responded and

Respondent offered Mr. B. an inhalant containing alkyl nitrites called Rush. Respondent told Mr. B. that Rush would get him high for a few minutes. Mr. B. inhaled some Rush,  which made him feel slightly lightheaded for a few minutes. After the Rush wore off, Mr. B. fell asleep on respondent’s sofa.

While Mr. B. was asleep, respondent unbuckled Mr. B’s belt, unzipped his zipper, folded Mr. B’s pants back, exposed Mr. B.’s penis through the opening in his underwear, and performed fellatio on Mr. B. While in the middle of the act, Mr. B. awoke and demanded that respondent drive him to his friend’s home.

On January 7, 2011, Mr. B. filed a police report with Officer Bove of the East Lansing Police Department against respondent for sexually assaulting him while he was asleep.

The victim

At the time respondent committed the misconduct against Mr. B., respondent was aware that Mr. B. was homeless, jobless, and financially destitute. To make Mr. B. feel safe, respondent offered him a warm place to spend time, food, and a few comfort items. In addition, Mr. B. was asleep and unable to defend himself from respondent when the misconduct occurred.


respondent has been a member of the State Bar of Michigan since 1980, and had 31 years of discipline-free practice in Michigan prior to the date of the misconduct. Respondent was employed as an assistant attorney general from 1984 through 2001 before opening a part-time solo practice.

Nonetheless, disbarment.

Notably, he was suspended for 180 days in Michigan. (MIke Frisch)

May 3, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Lamborghini An Excessive Fee

The Florida Supreme Court rejected a proposed one-year suspension and ordered that an attorney suspended for three years.

Count I of the Bar’s complaint was based on an agreement between Parrish and Bergaoui to use Bergaoui’s Lamborghini to pay Parrish’s legal fees. The referee found that the agreement was in writing and conferred a security interest in the Lamborghini in favor of Parrish’s firm in the amount of $30,000. Bergaoui was given ninety days to sell the vehicle for at least $30,000, with $30,000 to be paid to the firm for legal fees. If Bergaoui failed to sell the vehicle within ninety days, the firm would then have the right to market and sell the vehicle and give Bergaoui a credit for current and future legal fees in the amount of the sale or in the amount of $80,000, at the firm’s discretion. The referee found that although Bergaoui had given his Lamborghini as security to others in the past, that did not exempt Parrish from compliance with the clear requirements of Bar Rule[s governing excessive fees and business transactions].

Two other counts involved litigation and the same client

Count II of the Bar’s complaint was based on Parrish’s handling of litigation against Spruce River and Bergaoui related to an agreement to supply urea. The complaint alleged that Parrish failed to act diligently in defending the case and keeping Bergaoui informed and that he intentionally used an incorrect address to notify Bergaoui of his motion to withdraw, preventing Bergaoui from being aware of the withdrawal, resulting in default. At the close of the Bar’s case-in-chief, the referee granted Parrish’s motion for involuntary dismissal. Accordingly, as to this count, the referee recommended that Parrish not be found guilty of any rule violations. The Bar does not challenge these findings or recommendation.

Count III of the complaint pertained to Parrish’s representation of Spruce River in litigation against several defendants seeking specific performance of a contract to purchase seven parcels of real property in Charlotte County, Florida, for development and also seeking monetary damages in connection with the alleged breach of that contract (Spruce River Ventures v. Cotton, No. 082004CA001715XXXXXX (Fla. 20th Cir. Ct.) – the Cotton case). The complaint alleged several areas of misconduct: (1) failing to respond to a death notice filed in the case and lack of communication; (2) loaning money to several of the defendants in order to fund payment of back property taxes and accepting mortgages on several of the parcels involved in the case to secure that loan; (3) negotiating a potential settlement agreement which created a new entity in which Parrish would be a part owner; and (4) communicating directly with several defendants at a time when they were represented. Summary judgment was granted in Parrish’s favor with regard to the allegations of direct communication. In addition, after the close of the Bar’s case-in-chief, the referee granted Parrish’s motion for involuntary dismissal with regard to the allegations of lack of communication with the client in violation of Bar Rule 4-1.4 (Communication)

The court 

With regard to the loan and mortgage transaction, the referee found Parrish loaned $150,000 to several defendants in the Cotton case, took a mortgage on the parcels owned by those defendants, and had Bergaoui sign a subordination agreement, subordinating Bergaoui’s interest in the property—which was being pursued in the Cotton case—to the mortgage. The defendants in question had failed to pay real estate taxes on the properties for several years and were financially unable to do so. The parcels constituted over fifty percent of the property at issue in the case, and Parrish testified that the loss of those parcels would result in the dismissal of the case because of the severability issue. Parrish made the loan in order to preserve his client’s claim and protect his interest in his fee, which was now a contingency fee. Parrish requested that another attorney, John White, prepare the documentation for the loan transaction. White had previously been a law partner with Parrish and is currently a partner of Parrish, but was not at the time of the mortgage transaction. White prepared the note, mortgage, and subordination agreement, and also met with Bergaoui regarding the subordination agreement.

As to the car

Here, the Lamborghini agreement clearly pertained to legal fees, in that it was designed to ensure payment of such fees. This was not an “ordinary fee arrangement.” The referee specifically found that the “forced sale” provision— i.e., the provision giving Parrish’s firm the right to sell the car and apply the proceeds of the sale to Bergaoui’s legal fees—triggered the requirements of the rule, which were not satisfied. Saliently, the agreement unfairly afforded Parrish’s firm the potential to obtain funds from the sale of the client’s Lamborghini in an indeterminate amount that would constitute an excessive fee.

And the litigation

The misconduct includes failing to respond to a death notice filed in the case, loaning money to several of the defendants in order to fund the payment of back taxes, accepting a mortgage on several parcels to secure the loan, and negotiating a potential settlement agreement which created a new entity in which Parrish would be a part owner.

The court sustained the misconduct but found the proposed sanction insufficient

we conclude that a three-year suspension is warranted by Parrish’s misconduct.

(Mike Frisch)

May 3, 2018 in Bar Discipline & Process | Permalink | Comments (0)

How Many Hours Are Sufficient?

The Florida Supreme Court has rejected a recommendation of its Board of Bar Examiners to readmit an attorney who resigned from the Bar

Donald L. Ferguson was admitted to The Florida Bar in 1973. He worked as an assistant U.S. Attorney and then went into private practice as a criminal defense lawyer. In 1995, he was charged in federal court with conspiracy to obstruct justice and money laundering. Ferguson pled guilty to the two charges and was sentenced in 1999 to twenty-four months in prison and three years’ supervised release. His conspiracy to obstruct justice conviction was based on him having notarized the affidavits of two individuals who had been arrested on drug trafficking charges, knowing that the affidavits included false statements and would or might be used in judicial proceedings for some fraudulent or deceitful purpose. The affidavits stated that a certain person in Colombia had nothing to do with the drug smuggling conspiracy for which the affiants had been arrested. The affidavits were intended to be used either to oppose extradition in Colombia or for some other purpose. One of the arrestees, Ferguson knew, was a high-ranking member of a Columbia-based drug-trafficking organization. Ferguson did not represent the persons whose affidavits he notarized. He notarized the affidavits because he was asked to do so by a lawyer associated with a Washington D.C. law firm that was sending him lucrative criminal defense cases.

Ferguson’s money laundering conviction stemmed from his receipt of $75,000 in cash from an individual associated with the same Washington, D.C. law firm that was sending him lucrative cases and in turn passing it on to the wife of a criminal defendant to use in obtaining the release of her husband on bond. He delivered the money for the same reason he notarized the false affidavits: because he was asked to do so by the people who were sending him lucrative legal business and he did not want to “ruffle [their] feathers.”

He was suspended in 1995 and allowed to resign in 2000. He was convicted of money laundering in 2001.

Ferguson also failed to timely pay his personal federal income taxes for the years 1996-2008 and 2010-2011, and had liens filed against him for the tax years 1996-1999 and 2000-2002. His failure to meet his federal income tax obligations never resulted in criminal charges, only civil penalties. He has since paid all past due taxes and satisfied all liens.

The court

Here, the Board’s findings as to each specification are supported by the record and the sole issue before this Court is whether Ferguson has clearly and convincingly established his rehabilitation. Ferguson’s prior conduct is appalling. He repeatedly chose to disregard his professional and ethical obligations as a member of the Bar so as to not disrupt a lucrative business relationship. His conviction for conspiracy to obstruct justice is particularly egregious in that it involved a flagrant act of dishonesty and his knowing participation in an apparent scheme to present false information to a court. Such acts undermine the very foundation of the legal profession and the judicial process, both of which Ferguson had an obligation as a member of the Bar to respect and uphold. His disregard of this fundamental obligation for pecuniary purposes requires that he make an extraordinary showing of rehabilitation.

...Ferguson engaged in 791 hours of documented positive action between 2011 and 2017, an average of about 131.8 hours per year or 2.5 hours per week. Such a showing, while commendable, is hardly extraordinary, particularly when weighed against his prior misconduct. The same is true even if this Court were to consider Ferguson’s purported 600 hours of volunteer work with Habitat for Humanity in addition to the 791 hours he volunteered with Boca Helping Hands, a combined total of 1,391 hours for the sixteen-year period between 2001 and 2017, an average of about 86.9 hours per year. Simply put, Ferguson’s evidence of positive action fails to clearly and convincingly establish that he put forth the extra effort to overcome his past mistakes.

Justice Lawson dissented joined by two colleagues

Now 71 years old, Donald L. Ferguson has not practiced law in Florida for over 22 years, since his suspension by order of this Court, effective November 1, 1995. Mr. Ferguson was admitted to the Maine Bar in 2010 and remains a member in good standing there. After an evidentiary hearing, the Board of Bar Examiners unanimously found that Ferguson had established his “rehabilitation” and his “unimpeachable character and moral standing in the community” by clear and convincing evidence, along with every other applicable requirement for readmission...

Given that we have permitted Ferguson to reapply, and in consideration of the amount of time that has passed since Ferguson’s misconduct, Ferguson’s age and work history since his suspension (work that appears to have been necessary to enable Ferguson to pay his substantial debt to the federal government, which he has done), and the Board’s character and rehabilitation findings, I do not understand quibbling about whether 791 hours of volunteer service with Boca Helping Hands between 2011 and 2017 (and additional hours with Habitat for Humanity) constitute sufficient “extra effort to overcome his past mistakes.” Majority op. at 9. In addition, notions of fundamental fairness dictate that if the basis for our rejection of Mr. Ferguson’s application for readmission is really too few community service hours, we should at least tell him how many hours we think it would take, in the next two years, to atone for his past misconduct. Without that type of guidance, in the rules or elsewhere, the decision to reject Ferguson’s application for readmission on this basis alone appears unsettlingly arbitrary.

(Mike Frisch)

May 3, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Former Tax Court Judge Reciprocally Disbarred

A former tax court judge convicted of federal offenses has been disbarred by the District of Columbia Court of Appeals as reciprocal discipline for her Minnesota disbarment. 

The crimes were described by the United States Attorney's Office for the District of Minnesota

Acting United States Attorney Gregory G. Brooker today announced the sentencing of a former United States Tax Court judge and her husband for conspiring to defraud the United States. DIANE L. KROUPA, 61, was sentenced to 34 months in prison and ROBERT E. FACKLER, 63, was sentenced to 24 months in prison. Both defendants entered guilty pleas and were sentenced earlier today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minn. In addressing KROUPA’S extensive tax fraud committed while a sitting US Tax Court Judge, Judge Wright stated, “When a person in a position of trust violates that trust, the public is a victim,” and further noted that KROUPA’S fraud undermined the trust in the justice system.

“Over a nearly ten-year period, the defendants engaged in a deliberate and brazen tax fraud scheme,” said Acting United States Attorney Gregory Brooker. “Considering Ms. Kroupa’s position of public trust as a US Tax Court Judge, her crime is particularly egregious. Ms. Kroupa used her knowledge of the tax laws to further their fraud scheme, conceal their criminal conduct and maintain their acquisitive lifestyle. The sentences handed down today show that no one is above the law.”

“Diane Kroupa held a position of public trust as a federal tax court judge and made rulings based on the very tax laws she broke. She broke that trust when she thought she was above the law and committed the same crimes as those who appeared before her in court over the past decade,” said Hubbard Burgess, Acting Special Agent in Charge, IRS-Criminal Investigation. “Everyone in society must play by the same rules and IRS-CI will protect the integrity of the tax system by ensuring everyone pays their fair share, including federal officials.”

“The Postal Inspection Service will aggressively investigate all individuals, regardless of your job title, who chose to commit fraud. Today’s sentencing of Ms. Kroupa, a former U.S. Tax Court Judge, should send a clear message to those individuals contemplating committing fraud by using the US Mails. Don’t do it,” said Craig Goldberg, Postal Inspector in Charge of the Denver Division which covers the Twin Cities.

According to the plea agreement and documents filed in court, KROUPA was a former judge who was appointed to the United States Tax Court on June 13, 2003 for a term of 15 years. During the same period, KROUPA was married to FACKLER, a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting. From 2004 to 2013, KROUPA and FACKLER owned a home in Plymouth, Minnesota. From 2007 to 2013, they also leased a second residence in Easton, Maryland, where KROUPA lived while fulfilling her duties as a Tax Court Judge in Washington DC.

According to the plea agreement and documents filed in court, between 2002 and 2012, KROUPA and FACKLER conspired to obstruct the Internal Revenue Service (IRS) from accurately determining their joint income taxes. As part of the conspiracy, KROUPA and FACKLER worked together each year to compile numerous personal expenses for inclusion as supposed “business expenses” for Grassroots Consulting in their joint tax return. Those expenses included: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand. In total, from 2004 through 2010, the defendants fraudulently deducted at least $500,000 of personal expenses as purported Schedule C business expenses. At times,KROUPA prepared and provided to FACKLER summaries of personal expenses falsely described according to business expense categories. On other occasions, KROUPA herself compiled and provided to their tax preparer the fraudulent personal expenses.

According to the plea agreement and documents filed in court, as part of the conspiracy, FACKLER also caused Grassroots Consulting business receipts to be understated by approximately $450,000 by fraudulently deducting purported business expenses which had previously been reimbursed. As a result, the defendants caused the amount of adjusted gross income, taxable income, and total tax shown on their income tax returns to be falsely understated.

According to the plea agreement and documents filed in court, KROUPA and FACKLER made a series of other false claims on their tax returns, including failing to report approximately $44,520 that she received from a 2010 land sale in South Dakota. The defendants also falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income.

According to the plea agreement and documents filed in court, KROUPA and FACKLER purposely concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit for their 2004 and 2005 tax returns. During a second audit in 2012, KROUPA and FACKLER caused false and misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting. After the IRS requested documents pertaining to their tax returns, KROUPA and FACKLER removed certain items from their personal tax files before giving them to their tax preparer because the documents could reveal they had illegally deducted numerous personal expenses. During the audit, KROUPA also falsely denied receiving money from the 2010 land sale. Later, when they learned the 2012 audit might progress into a criminal investigation, KROUPA instructed FACKLER to lie to the IRS about her involvement in preparing the portion of their tax returns related to Grassroots Consulting.

According to the plea agreement and documents filed in court, between 2004 and 2010, KROUPA and FACKLER purposely understated their taxable income by approximately $1,000,000 and purposely understated the amount of tax they owed by at least $450,000.

This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the United States Postal Inspection Service.

Assistant U.S. Attorneys Benjamin Langner and Timothy Rank prosecuted the case.

Bloomberg Law News had a story on the implications of the pr osecution. (Mike Frisch)

May 3, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Wednesday, May 2, 2018

Tale Of The Tape

The District of Columbia Court of Appeals has issued an order of interim suspension in a reciprocal discipline case from Indiana.

The misconduct is described by the Indiana Supreme Court

Respondent represented “Defendant” pending trial on multiple counts of child molesting and child solicitation. At some point, Defendant began recording phone conversations he had with Respondent. During those conversations, Respondent bragged about his personal relationships with judges in a manner that implied he had the ability to improperly influence judges. Respondent also spoke in pejorative terms about another client’s race, and in multiple conversations he discussed with Defendant the option of fleeing the jurisdiction to avoid or delay criminal prosecution.

The Indiana suspension was for 90 days without automatic reinstatement.  (Mike Frisch)

May 2, 2018 in Bar Discipline & Process | Permalink | Comments (0)

An Unproven Horror Story

A Louisiana Hearing Committee found insufficient evidence of any ethical violations in a case an alleged conflict of interest

The allegations in the Formal Charges filed against Respondent read as a horror story of terrible attorney behavior. However, after more than 7 hours of testimony and the presentation of binders full of documents, ODC has failed to offer any credible evidence supporting the allegations or showing any ethical breach by Respondent. The findings of fact recited above demonstrate a brief but professional representation by Respondent. Though Ms. Chenier is disappointed by the ultimate outcome of her case, ODC’s charges against Respondent remain unproven.

There were two counts

Count 2, pertaining to Charles Chenier, will be addressed first as it is the least complex of the two counts against Respondent.

The Committee finds that Respondent, Anne Watson, and Complainant, Charles Chenier, never entered into an attorney-client relationship. Both Complainants testified that Charles Chenier signed a retainer contract with Respondent, however, neither was able to produce that document. Respondent specifically denied ever executing such agreement and credibly testified that she did not agree to represent Charles Chenier because of questions about his marital status with Taneshia Aaron Chenier, and questions surrounding his involvement in the lease of the premises at issue in the underlying litigation. The Committee finds Respondent’s testimony more credible than that of the Complainants. Ms. Chenier testified at the hearing that she and Charles Chenier have been married since 2012, and have never been separated other than when he was out of town for work. This testimony was directly contradicted by her deposition testimony in the underlying litigation in which she testified that Charles Chenier was living with his mother in August 2013. In the eyes of the Committee, this inconsistent testimony was significantly damaging to Ms. Chenier’s credibility, and gave support to Respondent’s explanation for declining representation of Charles Chenier. Respondent did not agree to represent Charles Chenier after their initial meeting and requested that he provide documents to clarify the lease issues before she would consider representing him. Those documents were never provided and Respondent never chose to represent him.

ODC has alleged that Respondent failed to return file materials to Charles Chenier. However, the consistent testimony of Respondent and her office staff was that no such file existed because Respondent never undertook Mr. Chenier’s representation. ODC relies on Mr. Chenier’s claim that Respondent’s office staff told him that his file was in storage. Rebecca Soileau testified that she did not know who Charles Chenier was when he called to request his file and identified himself as a past client. She may have told him that his file was in storage, because she did not know, in the moment, that he was never a client and no file existed. This off-the-cuff conversation between office staff and Mr. Chenier is not enough to create a duty for Respondent to produce a file that never actually existed.

 All charges brought by ODC with regard to Charles Chenier are predicated on there being an attorney-client relationship with Respondent. Given the finding that no such relationship existed, the Committee finds that ODC has failed to meet its burden of proof with regard to any charges stemming from Complainant, Charles Chenier. The Committee recommends that Count 2 of the Formal Charges be dismissed in its entirety.

There was another complainant

 ODC asks the Committee to believe that there was a significant risk that the representation of Ms. Chenier would be materially limited by Respondent’s relationship with Dr. Jason Fontenot. ODC alleges that "Respondent’s personal desire to appease her boyfriend and not jeopardize his ability to purchase a house from Billy Fontenot," created a conflict of interest. The Committee finds that ODC offered no proof in that regard apart from the less than credible testimony of Ms. Chenier. ODC’s allegations are mere speculation and implication not supported by the evidence.

Ms. Chenier testified that Respondent explicitly told her that she was not taking certain actions on Ms. Chenier’s claim because of the fact that Dr. Jason Fontenot was buying a different house from Billy Fontenot. This conversation is not alleged to have happened until September 2013. Respondent has, at all times, denied delaying any action in Ms. Chenier’s case for the benefit of Dr. Fontenot and has consistently denied telling Ms. Chenier that she ever did so. It is undisputed fact that the Petition for Damages was filed 5 weeks after Respondent undertook the representation, suggesting timely handling by Respondent. Respondent’s testimony is also more credible in light of the fact that that her relationship with Dr. Fontenot ended on August 20, 2013, within a week of her undertaking Ms. Chenier’s representation on August 13, 2013.

Again, this Committee finds the testimony of Respondent more credible than that of Ms. Chenier. The evidence is clear that Respondent had no real motivation to take such prejudicial actions against her client’s case at the time that Ms. Chenier alleges she was doing so. This Committee has been given no reason to believe the far-fetched testimony of Ms. Chenier over the far more plausible testimony of the far more credible Respondent.

Respondent testified that she informed Ms. Chenier, in their initial consultation, that she had met Billy Fontenot briefly as part of Dr. Jason Fontenot’s pending purchase from Billy Fontenot. Ms. Chenier denies such conversation ever occurred. Based on the evidence, the Committee finds that Respondent did mention having briefly met Billy Fontenot. It is the Committee’s belief that such disclosure was made not in the course of disclosing a potential conflict of interest, which Respondent did not think existed, but as a matter of making conversation between an attorney and client doing business in a small town.

ODC argues that a conflict of interest existed regardless of whether Ms. Chenier recognized such conflict existed, thus triggering Respondent’s duty to avoid the conflict. This Committee does not believe that Respondent’s ongoing relationship with Dr. Jason Fontenot as of August 13, 2013, created a conflict of interest under Rule 1.7. The Rule states that a conflict of interest exists when, "there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to… a third person."(Emphasis added) The Committee does not believe that the young dating relationship between Respondent and Dr. Jason Fontenot rose to the level of "significant risk" contemplated by Rule 1.7. Respondent and Dr. Fontenot had been dating for less than 6 months, maintained separate households, and had no plans for Respondent to move into the home being purchased. Respondent had no "responsibility" to Dr. Jason Fontenot either by law, or in her own perception. Respondent has denied that any part of her thinking as the attorney for Ms. Chenier was swayed by her relationship with Dr. Jason Fontenot and his purchase of a home form Billy Fontenot. The circumstances are connected in time, but not in fact.

Further, all of the evidence presented showed that Dr. Jason Fontenot and Billy Fontenot had already decided on a price for their sale before August 2013, and were just waiting for a contract with a real estate agent to expire before finalizing the sale, so as to avoid the payment of agent’s fees. Under these circumstances there is no reason to think that any action by Respondent could have affected Dr. Jason Fontenot’s purchase. In their testimony, both Dr. Jason Fontenot and Billy Fontenot acknowledged that Respondent had nothing to do their real estate deal. Notably, despite the fact that, as the seller, he had much to lose, Billy Fontenot was direct is his testimony that Respondent’s action had no effect on the purchase price of the home being sold to Dr. Jason Fontenot.

ODC has provided this Committee with no legal citations which would suggest that these circumstances would give rise to a conflict of interest. The sexual relationship cases cited by ODC have no application to the claims against Respondent. Further, independent research by the Committee has turned up no case law in Louisiana that would suggest these circumstances qualify as a conflict of interest under Rule 1.7. As no conflict of interest existed, Respondent had no duty to obtain a waiver of the conflict under Rule 1.7 (b) (4).

The committee also rejected a charge that the attorney violated the duty of confidentiality. (Mike Frisch)

May 2, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Unlawful Sexual Contact Allegations Draw Immediate Interim Suspension Of District Attorney Candidate

An immediate interim suspension has been imposed by a justice of the Maine Supreme Judicial Court

Based upon the Board submissions and the Court's review of the audio recording of the March 30, 2018 [Protection from Abuse]  hearing and copies of the exhibits admitted at that hearing, the Court concludes that the evidence supports a finding that Attorney Carey has committed violations of the Maine Rules of Professional Conduct. At this preliminary phase of the proceedings, the Court finds that the Board's evidence sufficiently demonstrates Attorney Carey's violations of M. R. Prof. Conduct 8.4(b) and (d) - prohibiting unlawful conduct and conduct prejudicial to the administration of justice - to warrant an immediate interim suspension under Me. Bar R. 24.

Specifically, the testimony at the PA hearing, found credible by the District Court, supports a finding that Attorney Carey subjected the complainant - a person whom he had formerly represented - to conduct that would constitute unlawful sexual contact under 17-A M.R.S. §§ 255-A(l)(A) and 251(1)(D). The testimony also supports the District Court's finding that on another occasion Attorney Carey grabbed the complainant's head and thrust it toward his crotch while demanding oral sex. This latter conduct would at a minimum constitute an assault under 17-A M.R.S. § 207(l)(A).

Attorney Carey's rebuttal to the Board's petition basically consists of the same arguments he presented to the District Court. In his testimony at the PA hearing Attorney Carey offered only a very general denial of the complainant's testimony with respect to the conduct referred to above. He emphasizes that there is evidence that the filing of the protection from abuse complaint followed his threat to evict the complainant from his Rumford residence. However, various emails and texts in the record substantiate that Attorney Carey was seeking to have the complainant engage in sexual activity with him and that she had refused. SeePlaintiff's Exhibit A and Defendant's Exhibits 18, 28, and 29 in the PA action; Exhibit A to the motion to reconsider filed by Attorney Carey in the PA action. By Attorney Carey's own admission in an email, his eviction threat was based in part on the complainant's refusal of his sexual advances. Defendant's Exhibit 18. This evidence supports the complainant's testimony.

Under the facts presented by the Board, including those previously found by the Maine District Court, the Court concludes that Attorney Carey's misconduct is sufficiently serious to constitute a threat to clients, to the public, and to the administration of justice. This is true based on the evidence submitted with the Board's petition and based on Attorney Carey's disciplinary record.

The attorney is already subject to a suspended two-year suspension.

A full hearing on the allegations in the petition shall promptly be scheduled and shall be consolidated with a hearing on the Board's petition in Docket No. BAR-16-15 to terminate the suspension of the discipline imposed on Attorney Carey in that proceeding.

Bangor Daily News  reports that he is a candidate for District Attorney,

A Republican candidate for district attorney in Maine accused of sexually abusing a former client has been suspended from practicing law in the state.

Auburn lawyer Seth Carey, who is running for district attorney in Androscoggin, Franklin and Oxford counties, was suspended from practicing law Monday by a Superior Court judge. The Portland Press Herald reports the judge found that Carey broke the rules for professional conduct.

Carey is accused of assaulting a former client in his Rumford home who was recently granted a protection from abuse order from Carey.

Carey previously said the accusation is “100 percent a false fabrication,” and has resisted calls to drop out of the race for district attorney.

The state Attorney General’s office says they are investigating the allegations.

A story from Central is linked here.

District attorney candidate Seth Carey “named and vilified” on social media the woman who obtained a protective order to keep him away from her, according to a statement from her lawyer.

Nicole Bissonnette, staff attorney for Pine Tree Legal Assistance in Lewiston, said her client “never sought to bring media attention to this matter, but felt it was necessary to respond to the spurious accusations made against her” by Carey in a Rumford court hearing and later at a news conference in Auburn this week.

 Carey did not name the woman, whose identity is being withheld, during the news conference, but he named her on social media posts last week. Paperwork he displayed on the courthouse steps in Auburn also contained her name...
Bissonnette said in a statement she released that the woman who accused Carey of sexual abuse “was not in a relationship with Mr. Carey during the time in question, when she was a tenant in his home” in Rumford.

“The parties never shared a bedroom nor engaged in any consensual relationship while they were roommates,” she said, an assessment that Carey also has endorsed.

The woman said she had to put a padlock on her bedroom door to keep him away, however, and accused him of sexually assaulting her in the living room of the house Carey owned. Carey has strongly denied any misconduct.

The judge, who heard both of them testify in regard to her request for a protective order, later ruled that Carey posed a credible threat to her safety and granted the order.

(Mike Frisch)

May 2, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Home A Loan

An attorney convicted of federal crimes has been suspended for four years and until further court order by the New York Appellate Division for the Fourth Judicial Department

Respondent was admitted to the practice of law by this Court on February 22, 1985. On May 16, 2017, he was convicted, upon his plea of guilty in the United States District Court for the Middle District of Florida (District Court), of making a false statement to a federally insured financial institution in violation of 18 USC § 1014, a federal felony. Respondent admitted in the corresponding plea agreement that, in 2006, he obtained a loan in the amount of $915,000 to build a home in Florida. In 2012, he defaulted on the loan, and the bank holding the mortgage commenced a foreclosure proceeding. Respondent admitted that he thereafter induced the bank to agree to a short sale of the property by falsely certifying that the sale was an arm’s length transaction and that all relevant agreements or understandings had been disclosed to the bank when, in fact, respondent had arranged for his business associate to act as a straw purchaser with the understanding that respondent would be permitted to continue to reside at the premises and that the deed would be subsequently transferred to a family member of respondent. Respondent further admitted that, in 2014, the property was deeded to the family member and that, as of December 2016, the bank had suffered a loss of approximately $529,959 because of the transaction. In August 2017, respondent was sentenced in District Court to supervised release for a period of five years, home detention for a period of 180 days, and 150 hours of community service. Respondent was additionally directed to make restitution to the bank in the amount of $527,292.70. By order entered October 25, 2017, this Court determined that respondent had been convicted of a “serious crime,” suspended him from the practice of law on an interim basis, and directed him to show cause why a final order of discipline should not be entered pursuant to Judiciary Law § 90 (4) (Matter of Fendick, 155 AD3d 1609 [4th Dept 2017]). Respondent thereafter submitted written materials in mitigation to this Court.

In determining an appropriate sanction, we have considered respondent’s submissions in mitigation, which include his statement that he was forced to enter into the short sale owing to personal financial hardship and the overall unfavorable economic conditions that prevailed during the relevant time period. We have also considered, however, certain factors in aggravation, including that the misconduct underlying the conviction involved deceit resulting in substantial harm to another for which respondent has failed to express remorse and that he has a disciplinary history that includes a public censure imposed by this Court.

(Mike Frisch)

May 2, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, May 1, 2018

Taxi King Disbarred

Taxi King Evgeny Freidman has been disbarred by the New York Appellate Division for the First Judicial Department

Respondent Evgeny A. Freidman was admitted to the practice of law in the State of New York by the First Judicial Department on April 14, 1997. At all times relevant herein, respondent has maintained a business office within the First Department.

The Attorney Grievance Committee (Committee) seeks an order pursuant to the Rules for Attorney Disciplinary Matters (22 NYCRR) § 1240.9(b) disbarring respondent, arguing that since he was suspended under 22 NYCRR 1240.9(a)(3), and has failed to respond to or appear for further investigatory or disciplinary proceedings within six months from the date of the order of suspension, he may be barred without further notice.

Respondent was served with the motion by first class mail and certified mail return receipt requested at the same three addresses where he was served with the notice of entry, but no response has been filed with the Court.

The motion should be granted inasmuch as more than six months have elapsed since July 13, 2017, the date of respondent's suspension, and he has neither responded to nor appeared for further investigatory or disciplinary proceedings (see Matter of Hidalgo, 158 AD3d 1 [1st Dept 2017]; Matter of Antwi, 157 AD3d 55 [1st Dept 2017]).

Accordingly, the Committee's motion for an order disbarring respondent pursuant to 22 NYCRR 1240.9(b) should be granted, and his name stricken from the roll of attorneys in the State of New York effective immediately.

All concur.

(Mike Frisch)

May 1, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Disbarred By Consent

The New Jersey Supreme Court has accepted the consent disbarment of an attorney charged with state offenses

Bergen County Prosecutor Gurbir S. Grewal announced the arrest of CRAIG C. SWENSON (DOB: 05/29/1963; single; and self-employed as an attorney) of 101 East Oak Street, Oakland, New Jersey on Misapplication of Entrusted Funds and Forgery related charges. The arrest is the result of an investigation conducted by members of the Bergen County Prosecutor's Office Financial Crimes Unit under the direction of Chief Robert Anzilotti.

In July 2017, the Bergen County Prosecutor’s Office received a complaint from clients of CRAIG C. SWENSON, Esq. regarding his failure to disburse to them, monies he had reported receiving as the result of a court-ordered judgment. Subsequent investigation revealed that SWENSON had provided the clients with a forged judgment, which was purported to have been issued by a Bergen County Superior Court Judge. In reality, no such judgment had been issued. The investigation further revealed that SWENSON used approximately $14,500 in entrusted funds, which were to be held in his attorney’s trust account for a separate matter, to make a fraudulent payment to the clients to whom had provided the forged judgment, all in furtherance of his deception.

As a result of the investigation, CRAIG SWENSON was arrested on Thursday, September 7, 2017 in Paramus, New Jersey, and was charged with one count of Misapplication of Entrusted Funds, with a benefit greater than $1,000, but less than $75,000, in violation of N.J.S.A. 2C:21-15, a 3rd degree crime; and one count of Forgery by Uttering, in violation of N.J.S.A. 2C:21-1A(3), a 3rd degree crime. Mr. SWENSON was served with a Complaint-Summons for the aforementioned charges and released. SWENSON is scheduled to appear in Bergen County Central Judicial Processing Court for a first appearance on Wednesday, September 20, 2017 at 8:30 a.m.

(Mike Frisch)

May 1, 2018 in Bar Discipline & Process | Permalink | Comments (0)

Not My Maryland

The Maryland Court of Appeals has disbarred an attorney admitted in New York.

 Disbarment is the appropriate sanction when an out-of-state attorney failed to represent two clients competently and diligently and to communicate with them adequately concerning their cases, failed to inform potential clients of the jurisdictional limitations of his law practice, engaged in the unauthorized practice of personal injury law in Maryland and mishandled the proceeds of that action, failed to respond to Bar Counsel’s investigation in a timely manner, and made various dishonest and false statements to his clients and Bar Counsel.


Bar Counsel recommended that Mr. Ndi be disbarred. Although Mr. Ndi violated a baker’s dozen of the rules of professional conduct in his representation of Mr. Tamon and Mr. Shonga and the hearing judge found a total of 11 aggravating factors, we do not simply tote up the number of possible violations and aggravating factors to arrive at an appropriate sanction. There can be a certain amount of "piling on" when the same underlying conduct implicates numerous rules. Ultimately, the sanction must be tailored to the particular conduct. However, the case for disbarment is heightened when violations related to basic standards of practice, the handling of client funds, and trustworthy behavior, are committed by an attorney who is not authorized to practice in Maryland to begin with.

In choosing to conduct his practice within the geographical confines of Maryland, Mr. Ndi subjected that practice to the consumer protection rules that govern legal practice  in Maryland. While this case arose out of the representation of just two clients, it exposed serious issues as to how Mr. Ndi was practicing law in Maryland as an out-of-state attorney and as to how he dealt with Bar Counsel. Mr. Ndi’s failure to participate in these proceedings means that he has not even made the simple assertion that the proven misconduct was an aberration, rather than an exemplar, of his practice.

The attorney in this case was not a novice, yet he practiced personal injury law where he was not licensed to do so, he mishandled client money, he misled the regulatory authority, and he defaulted in the proceeding charged with determining the truth as to his conduct. This was more than negligence or good intentions gone astray. In such a case, disbarment is called for, unless there is very strong mitigation. Here there is none. That is why we issued an order disbarring Mr. Ndi.

(Mike Frisch)

May 1, 2018 in Bar Discipline & Process | Permalink | Comments (0)