Friday, March 9, 2018

Restitution And Candor Issues Doom Reinstatement Effort

The Massachusetts Supreme Judicial Court denied reinstatement to a petitioner admitted in 1981 and disbarred in 2001.

He had resigned in the face of charges

The petition for discipline attached to the affidavit, the allegations of which the petitioner agreed could be proved by a preponderance of the evidence, describes a wide and deep pattern of misconduct in eleven counts charging, among other things, conversion, intentional misrepresentations to clients, neglect, failure to disclose a prior administrative suspension to clients or the court, and an adjudication of contempt for practicing law while suspended.

The Hearing Panel gave him credit for his post-disbarment employment

We recognize that it was humbling and difficult to become a paper boy at age forty-six, working the 2:00 A.M. to 6:00 A.M. shift (Ex. 4 (WCM 148-149); Tr. 2-129 (Petitioner)), and we give the petitioner credit for his work ethic and industriousness. We acknowledge and respect that the petitioner rebuilt his life after hitting bottom, working his way up from an unskilled position to a series of responsible, well-paying managerial roles where he can again provide for his family.

He has a long way to go to reimburse the Clients' Security Board

The petitioner has paid the CSB $100 a month beginning October 7, 2010, and we acknowledge that he has paid every month since then, at least through early June 2017. Ex. 16 (WCM400); Tr. 2-177 (Petitioner). However, the petitioner has never increased his monthly payments, and he still owes the CSB $109,000. Tr. 2-198, 2-260 (Petitioner). At that rate of payment, it will take over ninety years to make complete restitution.

He had declared bankruptcy in 2005

We do not agree that the petitioner's debt to the CSB was dischargeable in bankruptcy, or that it was discharged. And in any event, the petitioner testified before us that although his debt to the CSB may have been legally discharged, he has a moral obligation to pay it. Tr. 2-175-2- 176 (Petitioner). He stated, "I owe them money. I am going to pay them money or die first, and that's what is going to happen." Tr. 2-199 (Petitioner).

However, we conclude that the petitioner's conduct belies any suggestion that he acknowledges a moral obligation to correct the harm he caused his former clients and the resulting costs he imposed on the CSB and the bar. His choice to make only minimal reimbursement to the CSB, when he could clearly have afforded to pay more, and his failure to make any restitution at all to the other clients whose funds he took, preclude a finding of moral fitness.

Charity begins at home

The preceding table reflects that in the years 2010 to 2016, the petitioner and his wife made cash gifts to charity of$17,275. During the same period, he paid the CSB only $7,600. Ex . 16 (WCM402-403). Looked at another way, the petitioner would have to pay the CSB for 14 .4 years, at his $100/month rate, to reach $17,275...

The sincerity of the petitioner's stated intent to compensate his clients and the CSB is undermined by his efforts to distance himself from income and marital assets that were actually available to satisfy those obligations. By his testimony concerning his income and charitable donations, the petitioner demonstrated two ethical shortcomings: a lack of sincere concern for those harmed by his misconduct, and a willingness to present less-than-candid testimony in support of his petition for reinstatement.

Also as to assets

The petitioner tried to make the same "his and hers" distinction as to gambling winnings. There was testimony that both he and his wife gambled. Tr. 2-96, 2-101 (D. McPhee); Tr. 3-45 (Petitioner). Their respective winnings are reflected in W-2G forms filed with their tax returns; many of those forms are in the petitioner's name. Ex . 20 (WCM508, 509); Ex. 21 (WCM545); Ex . 22 (WCM582); Ex. 23 (WCM625-629). Both the petitioner and his wife tried to convince us that she was the only gambler, and that he just went along for companionship. E.g., Tr. 2-101-2- 102 (D. McPhee); Tr. 3-40 (Petitioner). However, the evidence is clear that on those occasions when the petitioner received a W-2G, it was because he had won money. Tr. 2-98, 2- l 08-2-109, 2-114-2-117 (D. McPhee). We cannot agree that he did not risk and earn money in this pursuit. We reject his testimony that none of the gambling winnings represented income to him. That false testimony appears to us to have been an excuse for not paying more to the CSB, an excuse we do not accept. It confirms the conclusion stated above; namely, that the petitioner has demonstrated a lack of concern for those harmed by his misconduct, and has sought to conceal or excuse that lack of concern by inaccurate testimony about his income.

There were other issues with his questionnaire answers

We do not agree that the reinstatement process is "iterative" (Petitioner's PFCs at 17-18,  56); that implies a collaborative process or that bar counsel has some duty to urge or aid a petitioner to be honest, accurate and complete. That is a serious misconception of the process and the applicable burden of proof. We reject any suggestion that a disbarred lawyer, in applying for reinstatement, need not be accurate or truthful in his first, second or third responses to the required reinstatement questionnaire and that if he is not, it falls to bar counsel to insist upon a fully correct response on the fourth try.

He had produced an impressive array of favorable character testimony but in the end

In light of the scope and seriousness of the petitioner's misconduct, he bears a heavy burden to prove that reinstatement is warranted. He has not carried it. We rely for this conclusion on many factors: his failure to repay his large debts to the CSB and his former clients; his disingenuous testimony about his tax returns and gambling winnings; his carelessness in preparing successive versions of his responses to the reinstatement questionnaire; and his failure to understand, or to explain, the causes of his misconduct. We acknowledge his recent strong work ethic and the letters and testimony from his witnesses, but we conclude that reinstatement would be detrimental to the integrity and standing of the bar, the administration of justice and the public interest.

(Mike Frisch)

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