Monday, December 21, 2009

Professionalism alert: NY court suspends attorney for living lavish lifestyle and not paying taxes

According to one New York court, even if a lawyer devotes thousands of hours to pro bono work and gives generously to charity, his license to practice can still be pulled if the rest of his financial house is not in order.  The Legal Profession Blog is reporting this case involving a one year suspension for a Kaye Scholer partner who failed to pay his taxes even though by the time of the suspension hearing he'd already reached a settlement with the IRS:

The Hearing Panel conducted a hearing and respondent, represented by counsel, respondent's wife, and several character witnesses, including two of his former law partners testified on his behalf. Witnesses testified that respondent devoted thousands of hours to pro bono activities on behalf of his firm representing death row defendants and, as a Trustee, gave a great deal of time to and made substantial financial contributions to Skidmore College, his alma mater. Respondent also submitted a letter from a psychiatrist stating that respondent suffered from "an Obsessive Compulsive Personality Disorder", that caused him to attend to his work compulsively, but caused him to be careless about various personal matters, including those relating to health and finances.

. . . . .

In the within matter, while there are some mitigating factors, we find aggravating factors vastly more compelling. Specifically, while at his law firm and receiving a substantial income, respondent purchased a five bedroom house in New Jersey and a four bedroom house in Florida. He also owned a Lincoln Town car, a Nissan Mini Van, a BMW SUV, and paid for his children to attend private school. In addition, respondent lied to his wife by telling her that tax matters had been taken care of and did not notify his partners of the pending criminal investigation before resigning from the firm to take a position as president of two corporate entities engaged in energy operations in the Philippines. According to the Hearing Panel, his failure to inform his law partners was to insure collection of full compensation and early capital account distribution. We agree with the Hearing Panel's finding that the psychiatric claim is not credible.

While respondent's extensive pro bono work on behalf of defendants facing the death penalty and his dedication to his alma mater is commendable, it does not excuse his failure to file returns or pay taxes during this time. Although respondent has paid all the taxes owed to the State, and has worked out a plan with the Internal Revenue Service, the picture that emerges is that respondent, without any justification, and while enjoying a lavish life style, disregarded his tax obligations. Having considered all of the factors set forth above, we find, as we have found in Matter of Goldman decided herewith, that failure to file tax returns and pay taxes for an extended period of time in these circumstances warrants suspension.

Read the rest of the story here.

I am the scholarship dude.

(jbl)

http://lawprofessors.typepad.com/legalwriting/2009/12/lavish-lifestyle.html

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