Wednesday, May 15, 2024

Bad Break Up

Conduct in the wake of the breakdown of a romantic and attorney-client relationship drew a proposed 18-month suspension from the California State Bar Court Review Department.

The relationship

In the summer of 2017, Vargas and Denise Diggs met online and began dating. At the time, Vargas resided in San Francisco and Diggs lived in the Los Angeles area. During the early stages of the relationship, around November 2017, the couple agreed to sublease an apartment in San Francisco for $2,750 per month. In April 2018, Diggs moved out and informed Vargas that she would no longer be paying any portion of the rent.

Prior to the start of their relationship, Diggs was renting a residence in the Los Angeles area. When Vargas and Diggs lived together in San Francisco, Diggs maintained that residence in Los Angeles. Over the course of their relationship, the couple’s interactions became increasingly strained. Despite their rocky relationship, Vargas agreed to represent Diggs in connection with landlord-tenant issues in Los Angeles. On February 5, 2018, Vargas filed a complaint in superior court against Diggs’s landlord, alleging breach of warranty of habitability issues and related torts with her residence, and on May 11, he filed an answer to an unlawful detainer complaint that the landlord had filed against Diggs.

The falling out is recounted in detail.

In count three, OCTC alleged Vargas violated section 6106 by (1) hacking and accessing Diggs’s private social media accounts; (2) running unauthorized credit reports using information he obtained from Diggs as her attorney; (3) using, changing, or creating social media accounts for her, or the data in those accounts, even though, on or about August 9, 2018, respondent was told by Diggs to stop using her social media accounts, running her credit report, and using her private information. This count also alleged Vargas acted without authority and without Diggs’s knowledge or consent.  The websites involved in the allegations were Experian, Verizon, Pinterest, Pure.dating (a dating app), Nextdoor.com, Microsoft, Dropbox, and DocuSign.

The hearing judge found Vargas culpable on all the allegations except two―she concluded there was no clear and convincing evidence that Vargas improperly accessed Diggs’s DocuSign account or that he created accounts in Diggs’s name on the dating apps Pure.dating or Mingle2.com, and OCTC did not appeal those factual findings. Section 6106 provides, in part, that the commission of any act involving dishonesty, moral turpitude, or corruption constitutes a cause for suspension or disbarment. As explained below, we do not find that the remaining allegations amounted to moral turpitude as charged.

In his response letter to the OCTC investigator, Vargas admitted to accessing or attempting to access Diggs’s Pinterest, Nextdoor.com, Microsoft, Dropbox, and Verizon accounts. Vargas argues he only accessed the accounts because Diggs had done the same with his accounts as early as 2017 when they first began dating. He testified they had a mutual agreement to share each other’s passwords for various social media accounts. Regarding Vargas’s use of Diggs’s social security number, Vargas testified that he obtained it from her prior to the start of the attorney-client relationship, only using it on the Experian website in an attempt to find her new address for the purpose of serving the small claims lawsuit, but stated he did not actually run her credit report. We see no evidence in the record that contradicts Vargas’s testimony on these points.

The State Bar Court

The record as discussed previously reveals numerous instances during the course of the attorney-client relationship where Vargas’s conduct fell far short of his duties to Diggs, and his actions ultimately became retaliatory and vengeful. Vargas clearly breached his statutory duty to Diggs, along with his common law duty to her, on multiple occasions by threatening to withdraw and not work on her case as he became upset over the course of their volatile romantic relationship. He continued to breach his duties to Diggs by engaging in a campaign of harassment against her after their romantic relationship ended that involved insults and crude messages, threats, sexually explicit photographs, unfounded accusations, and the small claims action, all of which are appalling and disturbing.

Sanction

We also find that an 18-month actual suspension is the appropriate recommendation to make, even though the culpability we find is less than the culpability the hearing judge found. This recommendation is in line with the similar cases of Rodgers and Hertz, and less than Torres, which had greater misconduct. We also determine it is necessary to recommend as probation conditions that, inter alia, Vargas establish rehabilitation to return to the practice of law and obtain mental health treatment in order to protect the public, the courts, and the profession. 

(Mike Frisch)

May 15, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, May 14, 2024

Not Quite A Get Out Of Jail Free Card

The California State Bar Court Review Department approved the imposition of an admonition

RESPONDENT DD (Respondent) has been a licensed California attorney since June 1992. In his first disciplinary matter, the hearing judge found Respondent culpable of a single count of commingling by writing 14 checks from his trust account for personal and business expenses during the first 16 months of the COVID-19 pandemic. The judge dismissed the remaining four counts. No harm occurred to any client and the judge declined to impose discipline; instead, she ordered an admonition. On review, OCTC challenges the judge’s issuance of an admonition and maintains that discipline is warranted.

Upon our independent review (Cal. Rules of Court, rule 9.12), we find Respondent culpable for a single violation of rule 1.15(c) of the Rules of Professional Conduct. We affirm the hearing judge’s conclusion that discipline is not warranted and an admonition is appropriate. We publish this case to clarify that the existence of aggravating circumstances does not automatically preclude a finding that admonition is an appropriate alternative to discipline. However, we caution that our findings are based on the particular facts of this case, which include extensive mitigating circumstances.

Respondent's background

The first in his family to receive a higher education, Respondent became a licensed attorney in Maryland and Pennsylvania in 1988 or 1989, after graduating from Howard University School of Law. For the first three and a half years of his career, Respondent was employed by a Maryland law firm where he did appellate work and handled legal matters for a professional baseball team. After moving to California, but before passing the California bar exam, Respondent worked for Immigration Legal Resource Center, a non-profit organization, where he practiced immigration law, which did not require him to be licensed in California. When Respondent became a member of the California bar in 1992, he continued handling immigration asylum matters and began advising boxing promotion companies on immigration issues pertaining to international boxers, later expanding his practice to include negotiating boxing match contracts on behalf of a paid television network company. After successfully assisting a friend with a bankruptcy matter in 2013 or 2014, Respondent segued into a bankruptcy law practice. Since 2016, Respondent’s solo practice has consisted primarily of representing small businesses and individuals concerning a variety of legal issues, with a mixture of contingency fee matters and those he bills hourly.

Violations

From March 3, 2020, through June 23, 2021, Respondent issued 14 checks to various individuals and companies from his CTA to pay non-client related expenses. The total amount was $30,366.97. The CTA held Respondent’s earned and undisputed fees, which was sufficient to cover all 14 checks, as well as client funds. Ten of the CTA checks were payments to Respondent’s credit card, which he had used to pay operational expenses, and one check was to repay the W.H. loan. At the time he wrote the CTA checks, Respondent did not understand it was a violation to pay these expenses directly from that account, as he had sufficient earned fees in the CTA.

Mitigation

OCTC argues that Respondent did not establish that his stressful life events―the COVID-19 pandemic, R.P.’s health issues and absence, his father’s death, his mother’s stroke, and his own hospitalization―were directly responsible for his misconduct because his misconduct was caused by his unawareness of the rule. While the health issues of Respondent and his mother, as well as his father’s death, are naturally extremely stressful circumstances, we agree with OCTC that he did not prove they were responsible for his misconduct. But we find the other personal challenges were responsible, in part, for his misconduct. The only reason Respondent was unexpectedly placed in the position of having to write checks for expenses and did so is because of an unprecedented pandemic and the sudden absence of his accountant (due to her part-time status as well as the fact that she was periodically hospitalized). We also do not ignore the other complications compounded by the pandemic and shutdown that played a role in the commingling violation, such as Respondent’s inability to conduct online banking with his CTA, the lack of physical access to Bank of the West, and his only access to physical checks were from his CTA. We further find that it is unlikely a subsequent pandemic with widespread business closures will occur during the remainder of Respondent’s career, especially because he testified that he was 64 years of age and nearing retirement. If it does happen, we are confident it will not pose a risk due to the changes Respondent and his accountant made to the accounting side of his law practice and their education of the rules governing trust accounts. Under the circumstances of this case, we agree with the hearing judge that moderate weight is warranted.

Conclusion

We recognize that this is a close case but find the requirements of rule 5.126 of the Rules of Procedure of the State Bar are satisfied, and that discipline is not necessary to protect the public, the courts, or the legal profession. Given Respondent’s and his accountant’s completion of CTA School, and the changes they implemented in his law office’s accounting practices, we find the risk that Respondent would reoffend to be particularly remote.

While we resolve this matter by admonition instead of discipline, it is not quite a “Get Out of Jail Free Card,” as OCTC would have us believe. Respondent’s disciplinary proceeding and the facts underlying his culpability are a matter of public record, and, if within two years of the effective date of the admonition Respondent commits misconduct resulting in another disciplinary proceeding, OCTC may request this matter be reopened. (Rules Proc. of State Bar, rule 5.126(D), (F).) We find this exposure is sufficient to impress upon Respondent the need to be scrupulous in meeting his professional and ethical obligations through the remainder of his legal career.

(Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Belknap Patterson May Pursue Claims

The New York Appellate Division for the First Judicial Department declined to dismiss an action against a former client's law firm

In 2013, plaintiff obtained a judgment against nonparty Barbara Stewart for more than $2 million arising from legal services rendered. That same year, plaintiff served Stewart with a restraining notice prohibiting her from selling or transferring any property until the judgment was satisfied. According to the allegations in the complaint, defendants, attorneys who later represented Stewart, knew about the restraining notice, yet in 2016 facilitated a sale of her personal property, a diamond ring, at a private auction that yielded nearly $3 million. Plaintiff alleges that defendants paid some of Stewart’s debts with the proceeds of the sale and deposited the rest of the funds into an IOLA and escrow account, later using the funds to make various payments on Stewart’s behalf, including some payments to themselves. Plaintiff’s judgment against Stewart has never been paid. Plaintiff commenced this action against defendants, interposing causes of action for violations of former Debtor and Creditor Law §§ 273, 273-a, 274, 275, and 276 (first, second, and third causes of action). Plaintiffs also interpose a cause of action against defendants David P. Marcus and the law firm of Marcus and Cinelli LLP (the firm) for civil contempt (fifth cause of action).

Defendants did not establish that they were entitled to dismissal of the causes of action insofar as they are based on a theory of fraudulent conveyance. First, the affidavit that David Marcus submitted on the motion does not constitute documentary evidence under CPLR 3211(a)(1) (see Arts & Fashion Group Corp. v Cyclops Prod., Inc., 120 AD3d 436, 438 [1st Dept 2014]). Second, Marcus’s affidavit does not conclusively establish that plaintiff has no cause of action under CPLR 3211(a)(7) (see Rovello v Orofino Realty Co., 40 NY2d 633, 636 [1976]). Although Marcus avers in his affidavit that defendants had no dominion and control over the firm’s IOLA accounts or over the escrow accounts into which the proceeds were allegedly transferred from the IOLA, this averment does not compel dismissal of the complaint, as dominion and control is not the only possible basis for liability on a fraudulent conveyance cause of action. On the contrary, liability may also attach if defendants benefited in any way from a transfer (see Federal Deposit Ins. Corp. v Porco, 75 NY2d 840, 842 [1990]; see also Estate of Shefner v Beraudiere, 127 AD3d 442, 442 [1st Dept 2015]). At this stage of the litigation, it has not been established that defendants did not benefit from the alleged transfer.

Similarly, defendants failed to establish that they were entitled to dismissal of the constructive fraud claims under Debtor and Creditor Law §§ 273-a and 275, as defendants cannot establish at this stage that the allegedly fraudulent transfers to them were made in good faith, either by the transferor (Stewart) or the transferees (defendants) (former Debtor and Creditor Law § 272[a]; see e.g. Sardis v Frankel, 113 AD3d 135, 142-143 [1st Dept 2014])

The court held that the claims are not time-barred.

Contempt

We decline to dismiss the cause of action for civil contempt. Plaintiff has sufficiently stated a cause of action by alleging that Marcus and the firm were aware of the restraining order and acted as their client’s agent to cause the notice to be violated (see Wimbledon Fin. Master Fund, Ltd. v Bergstein, 2018 NY Slip Op 30868[U], *9-10 [Sup Ct, NY County, May 10, 2018, index No. 150584/2016], mod on other grounds 133 AD3d 401 [1st Dept 2019], lv dismissed 34 NY3d 1152 [2020]).

Defendant Brian L. Cinelli’s contention that the claims against him should be dismissed because the only specific allegation about him is that he was a partner of the firm is not properly before as, as he did not raise this argument before Supreme Court.

Reuters reported

 Patterson Belknap Webb & Tyler is suing a pair of lawyers who worked at a smaller law firm over the $2.37 million sale of a 24.79-carat Harry Winston diamond ring that belonged to a former Patterson Belknap client.
 
Patterson Belknap said in a 14-page lawsuit filed in New York County Supreme Court Tuesday that lawyer David Marcus, formerly of Marcus & Cinelli, helped an ex-client of Patterson Belknap's sell the ring.
 
The sale violated a 2013 court order that prohibited the client, who owes Patterson Belknap more than $3.5 million in legal fees, from selling or transferring property without court approval, according to the complaint.
Marcus did not respond to a request for comment. He now works at The Law Offices of David P. Marcus, according to his LinkedIn profile.
 
When reached for comment, his former partner, Brian Cinelli, who was also named in the lawsuit, said he had "left" Marcus & Cinelli, but declined to comment further. He is now a partner at Schiffmacher Cinelli Adoff, according to that firm's website.

(Mike Frisch)

May 14, 2024 | Permalink | Comments (0)

"A Significant And Imminent Threat"

The New York Appellate Division for the First Judicial Department declined to disturb a trial court order in the Trump criminal case

We decline to exercise our discretion or to grant the relief that petitioner seeks here. It is well established that “[a]lthough litigants do not surrender their First Amendment Rights at the courthouse door, those rights may be subordinated to other interests that arise in [the trial] setting” (United States v Trump, 88 F4th 990, 1007 [DC Cir 2023] [internal quotation marks omitted] [the Federal Restraining Order Decision]). In the Federal Restraining Order Decision, the circuit court weighed the three key questions bearing on the entry of a restraining order against a criminal defendant: “(1) whether the Order is justified by a sufficiently serious risk of prejudice to an ongoing judicial proceeding; (2) whether less restrictive alternatives would adequately address that risk; and (3) whether the Order is narrowly tailored, including whether the Order effectively addresses the potential prejudice” (id.). The Federal Restraining Order is nearly identical to the Restraining Order issued against petitioner in the underlying criminal case (id. at 1028).

Petitioner brings this petition because he disagrees with where the circuit court drew the line in balancing the competing considerations of his First Amendment rights to free expression and the effective functioning of the judicial, prosecutorial and defense processes (id. at 1027-1028, citing Landmark Communications v Virginia, 435 US 829 [1978]). Weighing these concerns, the circuit court ultimately concluded that, given the record, the court had “a duty to act proactively to prevent the creation of an atmosphere of fear or intimidation aimed at preventing trial participants and staff from performing their functions within the trial process” (Trump, 88 F4th at 1014). This Court adopts the reasoning in the circuit court’s Federal Restraining Order Decision.

The Federal Restraining Order Decision properly found that the order was necessary under the circumstances, holding that “Trump’s documented pattern of speech and its demonstrated real-time, real-world consequences pose a significant and imminent threat to the functioning of the criminal trial process” (id. at 1012). First, the circuit court concluded that petitioner’s directed statements at potential witnesses concerning their participation in the criminal proceeding posed a significant and imminent threat to their willingness to participate fully and candidly, and that courts have a duty to shield witnesses from influences that could affect their testimony and undermine the integrity of the trial process (id.; see also Sheppard v Maxwell, 384 US 333, 359 [1966]). Justice Merchan properly determined that petitioner’s public statements posed a significant threat to the integrity of the testimony of witnesses and potential witnesses in this case as well.

(Mike Frisch)

May 14, 2024 in Current Affairs | Permalink | Comments (0)

Reciprocal Sanction For Immigration Court Disbarment

The New York Appellate Division for the First Judicial Department imposed reciprocal disbarment based on the sanction imposed by the Executive Office of immigration Review

In a hearing held before Immigration Judge Munish Sharda, Disciplinary Counsels introduced extensive documentary evidence of respondent’s professional misconduct before the Immigration Court. The evidence included emails respondent had sent to New Jersey Immigration Court staff calling them “children” and “severely troubled mentally ill, racist scumbag pigs,” telling them that they “can go to Hell and . . .pound coal.” Counsel also presented record evidence of respondent’s contumelious and belligerent behavior during immigration proceedings in which respondent, among many other things, called for Judge Mirlande Tadal “to be put out of her misery” and sent an email calling her “an arrogant, condescending, defiant, dishonest person.”

Judge Sharda sustained the four charges brought against respondent, finding that they were supported by clear and convincing evidence. Judge Sharda also found that there was significant aggravation in the form of prior offensive conduct similar to the underlying charges. Specifically, in June 2017, respondent was issued a confidential Warning Letter by EOIR for engaging in contumelious conduct before Immigration Judge Shifra Rubin. Respondent, however, failed to heed this warning and continued his contumelious conduct when he baselessly disparaged Judge Rubin, accusing her of being, among other things, biased and racist. As a result, respondent was issued an informal Admonition in March 2018.

Judge Sharda also found that respondent continued his disrespectful and obnoxious behavior during the disciplinary proceeding. This was evidenced by, among other things, his emails in which he engaged in ad hominem attacks, referring to federal disciplinary counsel as “learning disabled, mentally, ethically challenged” and to EOIR, the BIA, and the DHS as a “filthy, corrupt, terminal Pig Entity,” despite Judge Sharda directing respondent to conduct himself with proper decorum in the proceeding, including in his correspondence.

There was mitigation

Nevertheless, Judge Sharda found some mitigation, which included “an absence of a formal prior disciplinary record,” his 30 years of practice helping “many underrepresented individuals in immigration proceedings,” and “his temporary apolog  and display of remorse to the Elizabeth, NJ Immigration Court staff and initial acknowledgement of wrongdoing upon receipt of the NID.” Judge Sharda ultimately found, however, “that the aggravating factors far outweigh[ed] the mitigating factors” and imposed the sanction of disbarment.

Sanction here

Disbarment is the appropriate sanction because it is commensurate with the discipline imposed by EOIR and is in general accord with precedent involving comparable misconduct...

Respondent’s request for a hearing to present mitigation should be denied since he had ample opportunity to present mitigation at the federal disciplinary hearing but chose not to appear.

(Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Flight Worthy

An attorney has been disbarred by the Colorado Presiding Disciplinary Judge

In 2018, a client hired a law firm to file a lawsuit related to the client’s purchase of a jet aircraft, which the client claimed was not airworthy. At the time, Vail worked for the firm. The firm filed a complaint in 2019. Vail left the law firm in August 2020, and the client followed Vail to Vail’s own law practice. Thereafter, Vail failed to act with diligence and failed to communicate with his client. In January 2021, Vail emailed the client a link to the case file and informed the client that due to medical reasons, he was no longer able to practice law and would no longer be licensed to practice law. The email also noted that Vail’s firm was permanently closed and that different counsel would need to handle the client’s case. Thereafter, Vail failed to take required steps when terminating the representation, failed to respond to and comply with court orders to withdraw from the case, and failed to respond to reasonable requests for information from the disciplinary authorities. Because the client could not find another lawyer to take his case, he was forced to drop his lawsuit and stipulate to a motion to dismiss the matter with prejudice.

The attorney did not participate in the disciplinary proceedings. (Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Board Dismisses Ethics Charges

The Louisiana Attorney Discipline Board accepted a hearing committee's conclusions that found no disciplinary violations in the attorney's representation of a client in a criminal matter

The Board adopts the Committee’s findings of fact, except for the findings noted above which are either manifestly erroneous or require clarification. The Board also adopts the Committee’s finding that ODC failed to prove by clear and convincing evidence violations of Rules 1.3, 1.4(a)(3), 1.5(f)(5), 8.1(a), and 8.4(a) (c) (d). Accordingly, the Board will order that the formal charges be dismissed. The Board will further order that all costs and expenses of this matter be assessed to the Board.

Key findings below

 As an initial matter the Committee finds that the testimony of the Cody Cashat and Charlene Cashat lacked credibility. The three primary reasons for this conclusion are:

a. They both testified they went to see the Respondent on June 9, 2021, because they were upset and could not get in touch with her. The documentary evidence shows an entirely different tale. ODC-9 (p 212-223) shows the pre-meeting communications and coordination prior to that Jume [sic] 9 meeting. In addition, ODC-9 (pp. 206 and 224) show the gratitude and satisfaction of the Cashats with the Respondent.
b. Despite Ms. Cashat’s testimony that she hired the replacement attorney, Mr. Lasseigne, after the August 5, 2021, hearings, ODC-14 shows that Mr. Lasseigne appeared on behalf of Mr. Cashat at the August 5, 2021 hearings.
c. Mr. Cashat admitted that his memory is “terrible” because he had hit his head in a workplace accident that occurred in December 2021.

The Daily Mail carried a story about the attorney in April 2021

A  lawyer is suing her public defender boss for gender discrimination claiming he told her to dress 'like a nun' because her outfits were causing prisoners to masturbate, before he allegedly fired her when she complained about his comments.

Former public defense attorney Jami Pellerin filed a lawsuit against District Public Defender G. Paul Marx accusing him of firing her from the 15th Judicial District Indigent Defender's Office in Lafayette, Louisiana, after she reported his inappropriate comments to human resources. 

Pellerin claims her boss repeatedly made sexual and sexist remarks to her in the three years she worked there including asking her about her sex life, telling her to dress 'less attractive' and warning her he could fire her for being 'too attractive.'

She also alleges she was underpaid compared to her male colleagues ever since she was hired by the defender's office in March 2017.

The attorney says she was fired in March 2020 in retaliation for complaining about the alleged unequal pay and harassment.  

Marx has denied the allegations branding them 'sick lies' and claims Pellerin was fired for missing training to attend a wedding. 

n the 28-page lawsuit filed in Lafayette last week, Pellerin says Marx would often ask her about her sex life and whether she was going to get pregnant.  

It claims the comments started straight away with Marx asking her when she was first hired if she was married and warning her the office couldn't afford maternity pay if she became pregnant.

When she returned to work after getting married in 2018, Pellerin claims Marx repeatedly asked her if she was pregnant yet.  

The suit cites one particular incident in September 2019 where Marx as well as HR Director Chris St. Julien and staff attorney Janet Brown allegedly told her that her outfits were inappropriate and she should dress more 'like a nun'.

Pellerin was told her appearance was causing inmates at the parish jail to masturbate and that it was her responsibility to dress 'less attractive,' the suit alleges.

Marx allegedly told her: 'Men don't have self control. As their attorney and an employee of the public defender, you have to protect these men from their basic instinct by being less attractive.' 

Pellerin claims she was also warned she would be fired if she didn't correct the situation by changing her outfit choices.   

Pellerin's attorney Jill Craft told News 10 the comments she endured on a regular basis were 'intensely personal.'

'There were not only comments about her personally, about the way she dressed, her marriage, whether she was going to get pregnant or not, things that no employer has any business asking about, and from her perspective, even though she complained about it, she reported it to whoever she could think of,' she said.

When Pellerin raised concerns about Marx's comments, he allegedly told her: 'I can fire you for being too attractive, and there's nothing you can do about it.'

The suit also alleges Pellerin was underpaid from the day compared to her male colleagues, with some paid 10 percent more despite becoming licensed attorneys at around the same time as her.

Pellerin was hired as a staff attorney in the juvenile division for $51,000 a year on March 1 2017, the suit says.

Her male predecessor had been paid $56,000, she says.

Pellerin had already passed the Louisiana bar exam and was a licensed attorney. 

She says she was then transferred to a felony position, replacing a man who had only had his license for around two months but had been earing more than her at $58,000. 

Pellerin claims she tried to bring up the topic of pay with Marx in a November 20178 meeting, but was met with more sexual comments in response. 

Pellerin claims she reported the gender discrimination and harassment to the office's human resources and was fired in retaliation. 

The outcome should have never happened. If folks have complaints of discrimination, they are free in this country to be not retaliated against, and in Mrs. Pellerin's circumstance, she contends that's exactly what happened to her,' Craft said. 

Pellerin also claims her dismissal was retaliation for her helping a private defense attorney in February 2020 - one month before her firing. 

She claims her male colleagues were also helping the attorney and that she had also offered advice.

She says she was reprimanded by Marx for this while her male coworkers were later praised.    

Marx denied the allegations as 'sick lies' telling The Advocate the real reason for Pellerin's dismissal was that she had skipped scheduled training to go to a friend's wedding and was working 'out of her lane' with prison inmates. 

He said Pellerin often wore 'tight, revealing, low-neckline' clothing but insisted she was not subject to a special dress code 'other than our normal policy, which says you're representing the office and you can't do whatever you want.' 

The public defender told the Daily Advertiser Pellerin has a 'vendetta' against his office and the suit is based on 'scandalous quotes that were fabricated in large part'.

'I want women who have these issues to have a fair hearing,' Marx said. 

'I also want this to be based on the reality of the workplace and not a vendetta of someone who is angry getting back at the office.' 

Marx admitted there was a meeting about Pellerin's attire but that her version of events was not accurate.

'We've got a record of what happened and what was said, but this petition was drafted in such a way as to sensationalize that,' he said.  

After she was fired in March 2020, Pellerin first took her complaint to the US Equal Employment Opportunity Commission.

When the EEOC was unable to resolve the dispute, she filed the suit against Marx and his office.

Pellerin is seeking unspecified damages for 'extreme emotional distress, humiliation and embarrassment' and has asked for a trial by jury. 

I have not found anything online about the progress of the lawsuit. (Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Fear Of Dogs And The ADA

The United States District Court for the District of Columbia (Judge Cobb) dismissed a claim brought under the Americans with Disabilities Act

As relevant to both of her ADA claims, Anderson does not allege facts sufficient to plausibly establish that being “afraid of dogs” renders her “disabled” within the meaning of the ADA. An individual is considered disabled under the ADA if they have “a physical or mental impairment that substantially limits one or more major life activities,” they have “a record of such an impairment,” or they have been “regarded as having such an impairment.” 42 U.S.C. § 12102(1). The only allegation that has any chance of squeezing Anderson’s fear of dogs within that definition is her statement that “CloudHQ LLC is a pet-friendly company,” see ECF 1-2 ¶ 1, but this isolated, vague allegation is insufficient to plausibly show that her fear substantially limits her in any way as far as the ADA is concerned. That deficiency alone is sufficient to dismiss her ADA claims, but there are several other bases for dismissal.

Once again relevant to both ADA claims, Anderson’s complaint strongly suggests (without explicitly stating) that her employer did not actually know that she was afraid of dogs. See id. ¶ 2 (alleging that “if it [were] known [she] [was] afraid of dogs, she would not have been at CloudHQ LLC.”);see also ECF 8 at 10 (opposition to dismissal arguing that CloudHQ disqualifies applicants “if they are afraid of dogs” but that Anderson’s “CloudHQ LLC manager forgot to ask Marie Anderson ifshe is afraid of dogs”). An employer cannot be held liable for a failure to accommodate a disability it did not know about, and this lack of knowledge does not help Anderson’s disparate treatment claim either.

There are still additional reasons to dismiss Anderson’s complaint. With regard to her failure-to-accommodate claim, the only possible accommodation the Court can identify in the complaint is the ability to work from home. Yet, as described already, Anderson not only fails to allege that she requested and was denied that accommodation, she outright concedes that she received it. As for her disparate treatment claim, her utter lack of detail with regard to the two women who replaced her does not support a plausible inference of discrimination on the basis of disability. In fact, Anderson seems to concede in her opposition that Holmes—the individual who, unlike Anderson, went from a temporary position to a permanent one—has a disability. See ECF 8 at 4 (“Yes, Ashley Holmes is Black American; she is color blind that is the reason her monitors are black and white.”). Anderson’s ADA claims fail on almost every element, so they must be DISMISSED.

(Mike Frisch)

May 14, 2024 | Permalink | Comments (0)

Brother, Can You Spare $430,000?

A justice of the Massachusetts Supreme Judicial Court has disbarred an attorney for conversion of funds of his incarcerated brother

The respondent, Laurence Potter Morin, was charged by the Office of Bar Counsel (bar counsel) with, inter alia, intentionally converting approximately $430,000 of his brother's, Paul Morin's (Paul), money that had been entrusted to the Respondent's care by Paul while Paul was incarcerated. For the reasons set forth below, it is ordered that a judgment shall enter disbarring the respondent from the practice of law in the Commonwealth.

Proceedings below

Following considerable motion practice between the respondent, who was represented by counsel at the time, and bar counsel, a hearing was held remotely on December 5 and 6, 2022. Fifty-two exhibits were admitted, and five witnesses testified, including Paul, bar counsel's financial investigator, and two of Paul's friends who helped him recover some of his property from the respondent while still in prison. Approximately two weeks prior to the hearing, the respondent notified the Board that he would no longer participate in the proceedings. The hearing therefore took place in the absence of the respondent and his counsel...

The hearing committee recommended that the respondent be disbarred. The board voted to adopt the committee's recommendation.

Before the court

An Order of Notice was issued and served on the respondent in the manner specified in S.J.C. Rule 4:01, § 21, directing him to appear before this Court, via remote hearing on March 29, 2024. The hearing was held, attended by assistant bar counsel and the respondent. At hearing, the respondent requested that I reject the findings of the hearing committee, which were adopted by the board, and either conduct or order a remand for purposes of conducting an evidentiary hearing anew. Considering the respondent's decision not to participate in the evidentiary process before the hearing committee, the respondent's request made at hearing is DENIED.

Sanction

Considering the extended and staggering misuse of funds trusted to respondent's care by his brother, as well as the respondent's subsequent attempts to conceal his misconduct, I agree with the board that disbarment is the appropriate sanction in the circumstances of this case.

(Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

A Client In Caribou

The Maine Supreme Judicial Court suspended an attorney for three months and fourteen days

G.E. of Caribou, Maine, filed a grievance complaint against Umphrey on August 1.9, 2021. G.E. asserted that in June of 2019, G.E. paid Umphrey $1050.00 for a filing fee for an Immigration Petition for G.E.'s wife and children in the Philippines. For two years, G.E. sought status updates from Umphrey and Umphrey stated that the Petition had not been approved. In July of 2021, G.E. asked Umphrey for a receipt of the filed Petition and Umphrey stopped communicating. G.E. later learned that Umphrey had left his law firm and the Petition had not been filed. G.E.'s attempts to contact Umphrey via mail, e-mail, and voicemail were unsuccessful. Bar counsel's attempts to contact Umphrey after the Grievance Complaint was filed were also unsuccessful.

Sanction

The sanction for Dan P. Umphrey's misconduct as it relates to his violation of Maine Rules of Professional Conduct 1.4, 8.1[b), and 8.4[d) is his immediate suspension from the practice of law for a period of three months and fourteen days, which suspension shall conclude on August 24, 2024, coincident with Defendant's suspension imposed in BAR-23-11.

The sanction for Dan P. Umphrey's misconduct as it relates to his violation of Maine Rule of Professional Conduct 1.5 is a reprimand.

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Interception

The Georgia Supreme Court has disbarred an attorney

This disciplinary matter is before the Court on a Notice of Discipline, recommending the disbarment of James W. Davis, III, (State Bar No. 283824) for his role in intercepting a multi-milliondollar payment from an insurance company to its policy holder.

The facts were established by default

The facts, as deemed admitted by Davis’s default, are as follows.In December 2018, Coface North America Insurance
Company (the “Insurer”), a company specializing in commercial trade credit insurance, agreed to pay one of its policyholders a claim related payment in the amount of $3,093,085.50. On December 18, 2018, the Insurer requested payment instructions from the policyholder’s insurance broker and received payment instructions via email from a policyholder representative, which included wire transfer information for a bank account in the name of the policyholder at Citibank, N.A. On December 19, 2018, an unknown individual purporting to be the same policyholder representative sent an email to the Insurer, instructing the Insurer to disregard the payment instructions transmitted the previous day and to instead wire the funds to a bank account held by the policyholder’s attorney. Attached to the email was a letter of authorization and declaration that included new wiring instructions to a Wells Fargo account in
the name of J. Davis – Attorney at Law, LLC IOLTA (“Davis’s IOLTA”). On December 21, 2018, the Insurer wired

On December 31, 2018, the Insurer was informed that its emails with the policyholder had been compromised and that the funds at issue were never received by the policyholder. The Insurer reported the incident to Citibank and the FBI, and on January 3, 2019, counsel for the Insurer sent a “cease and desist” letter to Davis demanding return of the funds. The Insurer was subsequently notified that Wells Fargo credited $2,540,319.30 from Davis’s IOLTA account to the Insurer, which left $552,755.2o unaccounted for by Davis. Additionally, the payment from Davis’s IOLTA account to the Insurer included $3,500.00 belonging to clients of Davis, of which Davis was aware.

Davis initially denied any knowledge of or participation in the misappropriation of these funds and claimed that he was also a victim in this scheme. However, the factual allegations of the Notice of Discipline—which Davis has admitted by virtue of his default— state that Davis was “a knowing and intentional participant in the interception and theft of the [funds]” and “knowingly used his attorney trust account to carry out the interception and theft of the [funds].

Sanction

Having reviewed the record and considered Davis’s factual admissions herein, we conclude that disbarment is the appropriate sanction in this disciplinary matter and is consistent with similar cases in which an attorney utilized fraud to misappropriate funds and defaulted during the disciplinary process.

(Mike Frisch)

May 14, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Monday, May 13, 2024

Reinstatement Granted

The Pennsylvania Supreme Court has reinstated a former Cozen O'Connor attorney who had been suspended for one year for insider trading.

on certification by the Disciplinary Board that William E. Gericke, who was suspended on consent for a period of one year, has filed a verified statement showing compliance with the Order of Suspension and Pa.R.D.E. 217, and there being no other outstanding order of suspension or disbarment, William E. Gericke shall be reinstated to active status.

A cease and desist order of the Securities & Exchange Commission set out the facts

At all times relevant to these proceedings, Gericke was an attorney at a large international law firm, practicing primarily in the insurance subrogation area. Gericke was also the firm’s conflicts counsel, which required him to identify possible conflicts of interest between existing firm clients and potential new engagements.

On or before October 7, 2019, a partner at the law firm asked Gericke, in his capacity as conflicts counsel, to run a “confidential” conflicts check in which the partner informed Gericke of a potential merger involving the firm’s client, LPT, and Prologis. This information was material and nonpublic.

Gericke understood that the information about the potential merger was confidential. Gericke knew, or was reckless in not knowing, that he had a duty to maintain the confidentiality of the information and was not permitted to trade on it.

Nevertheless, the next day, and in advance of any public announcement of the merger, Gericke purchased 1,000 shares of LPT stock in his personal brokerage account. Gericke did not inform his law firm of his plans to purchase the stock.

On Sunday, October 27, 2019, Prologis publicly announced the definitive merger agreement with LPT. The following day, LPT’s stock price closed at $57.50, an increase of 13.7% over the closing price the trading day immediately before the announcement. After Gericke learned of the announcement, Gericke sold his entire position in LPT on November 19, 2019, for a profit of $10,002.20.

By purchasing LPT stock while in possession of confidential information regarding the impending merger, Gericke misappropriated material nonpublic information that he obtained in the course of his employment as an attorney, and breached a duty of trust and confidence he owed to his law firm and LPT.

(Mike Frisch)

May 13, 2024 in Bar Discipline & Process | Permalink | Comments (0)

But Her Email

A summary of a decision issued today by the New Jersey Appellate Court

This appeal presents a novel issue requiring the court to determine whether the New Jersey Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, or the common law right of public access, mandates disclosure of an attorney's identity when the attorney renders legal advice to a colleague or friend about an ongoing prosecution.  In the present matter, a municipal prosecutor sought counsel from an attorney who, in turn, rendered advice via email to the prosecutor's personal account.  The prosecutor, in turn, disclosed the contents of the email in open court and provided a printed copy of the email to the defense, but redacted the sender's name and email address.  The municipality thereafter denied a government records request for the unredacted email.

 Plaintiff Association for Governmental Responsibility, Ethics, and Transparency (AGREAT) appeals from the March 3, 2023 Law Division order denying its order to show cause to compel production of the email requested from defendants Borough of Mantoloking, its clerk, and its custodian of records.  The motion judge concluded the email did not fall within OPRA's definition of a government record.  The court affirms the order under review and further holds the email is not subject to disclosure under the common law.  The court also concludes, even if the email were a government record, the work product privilege and confidentiality exemptions under N.J.S.A. 47:1A-9(b) weigh against disclosure.

Smith, J.A.D., filed a dissenting opinion, concluding:  the redacted email was a public record under OPRA; the redacted email was privileged pursuant to the work-product privilege, but an attorney waived that privilege in court; a balancing of the public's access to government records with the email sender's reasonable expectation of privacy under Doe v. Poritz, 142 N.J. 1 (1995), justifies disclosure of the name and email address of the sender.

Facts

This appeal has its genesis in a quasi-criminal municipal court action against Donald F. Burke, Sr., counsel for AGREAT in the present matter. To give context to the issues raised on appeal, we summarize the nature of those proceedings from our prior decision reversing the Law Division's interlocutory discovery order and remanding the matter to the municipal court. See State v. Burke, No. A-0503-22 (App. Div. July 19, 2023) (slip op. at 1-19).

In October 2020, Jakob Weingroff filed a citizen's complaint in Mantoloking Municipal Court alleging Burke had committed various traffic infractions during their verbal altercation the prior month. Id. at 2. The complainant and defendant were not strangers; the bad blood between them emanated from "an ongoing property dispute" involving the men and their family members. Ibid.

At the time of the incident, Weingroff had resigned from his employment as a New Jersey State Police (NJSP) trooper. Id. at 3 n.1. Previously charged criminally with fourth-degree falsifying or tampering with records, N.J.S.A. 2C:21-4, and administratively with misconduct regarding the same unspecified incident, Weingroff was admitted into the pretrial intervention (PTI) program in 2018, and voluntarily forfeited his employment with the NJSP. Ibid.

Elizabeth Leahey was appointed as prosecutor due to the conflict.

...the potential for harm regarding further nonconsensual disclosures is substantial. In our view, compelling disclosure of the name and email address of attorneys who render advice to one another has the potential for a chilling effect on the collegiate relationship among attorneys and their private communications concerning their shared legal advice (factor three). Additionally, although defendants did not articulate specific injury that would result to the relationship between Leahey and the sender if his name and address were disclosed – and defendants bear the burden of proof – it is clear from Leahey's certification that the sender was a colleague and friend, whose name and address she redacted before providing the November 17 email to Burke (factor five). Finally, because Leahey redacted the sender's name and address, there exists no other means to provide the requested record without disclosing personal information (factor six).

Majority

We are cognizant that the circumstances presented in this appeal are unique – an OPRA request limited to the name and email address of an attorney by the attorney for the requestor, who also is the defendant in the underlying quasi-criminal action and who perceives the contents of the disclosed communication as a threat to quell his interrogation of a witness in that matter. We take no position on AGREAT's contention that the November 17 was threatening in nature or – as our dissent colleague suggests – that the municipal prosecutor was improperly influenced by her colleague's advice. We simply conclude the disclosure under OPRA or the common law right of access should not be used as a sword to access shielded information.

SMITH, J.A.D., dissenting.

I submit that the public has a right to know if, and when, the prosecution of one of our citizens has been improperly influenced. Based on this principle, I respectfully disagree with the majority. I would find that the disputed email sent to the municipal prosecutor is a government record under OPRA and would not reach the common law right of access analysis. I would also hold, on these unique facts, that while the email's sender has a reasonable expectation of privacy, a Doe analysis warrants disclosure of the full, unredacted email, including the name and email address of the sender.

(Mike Frisch)

May 13, 2024 in Privilege | Permalink | Comments (0)

Saturday, May 11, 2024

Pirates Of Cape Cod

The Delaware Court of Chancery issued an 122 page  opinion in litigation over the booty recovered from a pirate ship that sank over 300 years ago

The plaintiff is a sophisticated business consultant, the former director of a publicly traded corporation, and stockholder of Maritime Explorations, Inc. (“MEI”). MEI holds significant rights in the only identified pirate shipwreck ever discovered—the Whydah Galley—and has worked to excavate the wreckage with varying levels of success.

The plaintiff brings this action to challenge (1) specific incidents of alleged fiduciary misconduct by MEI’s two directors (the defendants) over the past three decades and (2) an allegedly unfair 2018 merger (the “Merger”) that the defendants caused MEI to enter and for which the plaintiff seeks rescission.

Despite being on inquiry notice of his potential non-Merger claims many years prior, the plaintiff did not act. And for 23 years, while roosting atop his claims, the plaintiff continued his slumber. In that time, the defendants have become severely prejudiced in their ability to mount a defense. Indeed, among other things, two individuals who would have been key witnesses died. This includes one of the two defendants in this action. Likewise, a flood destroyed many of MEI’s documents and records several years before the plaintiff initiated this action.

It would undermine the equitable principles embodied in the doctrine of laches to find for the plaintiff on the claims challenging acts that took place decades ago. Among other things, those principles are concerned with the natural decay of evidence over time and a defendant’s ability to mount a defense with available evidence. That is, with the passage of time comes the increasing risk that evidence that may have once been available to prove a defendant’s case has succumbed to the destructive forces of nature. Indeed, under circumstances like these, such delayed claims pose a substantial risk of unjust outcomes. There is a serious risk that a defendant will be held liable either because he bears the burden of proof and can no longer obtain exonerating evidence or, more perniciously, because only the evidence damning him was, by chance alone, not the subject of decay. Delaware law thus compels me to reject the plaintiff’s delayed claims.

The plaintiff awoke to raise these claims only after learning that the defendants caused MEI to merge with an entity the defendants owned. The defendants undertook the Merger in anticipation of a significant payout and their belief they were close to uncovering the “mother [l]ode.” Lacking any semblance of fair process and no reasonable metric for evaluating the fairness of the price, the defendants used the Merger to grant themselves additional equity and to extract rights to a substantially greater share of the Whydah assets, all to the detriment of the minority stockholders. Under the facts presented here, the plaintiff prevails on this timely Merger claim, and rescission is the appropriate remedy.

The prize

[Defendant] Clifford is an explorer. His exploration—specifically of the Whydah Galley pirate ship—has led to this litigation. The Whydah sank off the coast of Cape Cod in 1717 while under the command of the pirate Sam Bellamy. Aboard, so it is rumored, were chests of money and treasure from at least 53 other vessels the Whydah’s crew had robbed. The Whydah lay on the ocean floor for over 250 years until 1982, when Clifford discovered debris off the coast of Massachusetts while operating his company Maritime Underwater Surveys, Inc. (“MUS”). Believing the debris to be from the Whydah’s wreckage, Clifford, through MUS, initiated and succeeded in a federal admiralty action in which he sought sole title to the Whydah. In May 1983, while the admiralty litigation was ongoing, Clifford formed MEI to facilitate his excavation of the Whydah wreckage.

After forming MEI, Clifford and MUS assigned their rights in the Whydah to MEI.  Then, Clifford sought equity financing through MEI to fund the Whydah’s costly excavation. As a result of these efforts, MEI raised over $1 million in financing through two private placements between 1983 and 1986.  In addition to the stock issued through the private placements, MEI also issued stock to compensate those involved in its excavation and business operations. MEI continued this practice for many years. These individuals—the participants in the private placements and those MEI compensated with stock for their services—are MEI’s minority stockholders.

Since its inception, MEI has recovered roughly 15,000 coins. Although Defendants “haven’t found the mother lode yet,” the coins they have recovered remain the “world’s only pirate treasure.”  Along with the coins, Defendants have recovered many other artifacts, including cannons, guns, and the Whydah’s bell.

A falling out among the present litigants

Clifford testified under oath to events that took place in a meeting at the Harvard Club. Clifford asserts that, in addition to making “anti-Semitic comments” at the meeting, Buddenhagen “exposed himself at the table, stood up and said, ‘Meet OneEyed Willy.’” These events were followed promptly by WPLP’s letter to Defendants asking that they remove Buddenhagen from the Management Committee. Defendants acquiesced.

Buddenhagen vociferously denies Clifford’s allegations and asserts they are entirely false.

The Chancellor

To be clear, I am unable to determine with any remote degree of confidence what happened at the Harvard Club three decades ago. At this point, I have only the testimony of two individuals who are, to put it mildly, quite adverse to each other and interested in the outcome of this litigation.

The litigation

On January 9, 2019, Buddenhagen made a books and record demand pursuant to Delaware General Corporation Law (“DGCL”) Section 220. On April 4, 2019, Buddenhagen commenced this action.  On April 18, 2020, Lazier passed away, after which the Court granted Plaintiff’s motion to substitute the Estate of Robert T. Lazier as a party.

Trial took place after another Vice Chancellor rejected a settlement agreement.

The present action centers around two issues. The first deals with whether Defendants breached their fiduciary duties by engaging in the Buyout, the events involving HS and AEI, and Defendants’ other non-Merger acts. The second asks whether the Merger was both validly approved and entirely fair.

To the former, Plaintiff argues that over the past 30 years Defendants have breached their duty of loyalty to MEI by, among other things, usurping MEI’s corporate opportunities, diverting and converting corporate funds and assets, and engaging in rampant self-dealing. In response, Defendants advance a laches defense, which, they argue, bars Plaintiff “from challenging the hornets’ nest of decades[-]old occurrences in connection with this litigation.”

No one can deny that Defendants faced tremendous prejudice from Plaintiff’s delay in bringing this action. Textbook examples of laches prejudice—including the destruction of records through floods and the death of multiple key witnesses—make it very clear that, if evidence existed that could prove Defendants’ conduct over the prior decades was proper, Defendants have been severely prejudiced in their ability to produce it. It is also clear that Plaintiff was on inquiry notice of the alleged breaches many years before initiating this action. Accordingly, principles of equity, which manifest themselves through the doctrine of laches, compel me to conclude that Plaintiff is time-barred from asserting its non-Merger claims.

As to the second issue, Plaintiff argues a majority of MEI’s common stock did not approve the Merger because Defendants did not hold the requisite percentage of MEI stock. Next, Plaintiff attacks the Merger’s fairness. Defendants raise three responses to fairness. First, Dr. Margolin’s assessment suggests the transaction was fair; second, they relied on Bergman’s belief the Merger consideration was fair; and third, they subjectively believed the Merger consideration was fair. As I explain below, none of Defendants’ arguments as to fairness prevail.

Wikipedia on Sam Bellamy

Captain Samuel Bellamy (c. 23 February 1689 – 26 April 1717), later known as "Black Sam" Bellamy, was an English sailor turned pirate during the early 18th century. He is best known as the wealthiest pirate in recorded history, and one of the faces of the Golden Age of Piracy. Though his known career as a pirate captain lasted little more than a year, he and his crew captured at least 53 ships.

Called "Black Sam" in Cape Cod folklore because he eschewed the fashionable powdered wig in favor of tying back his long black hair with a simple band, Bellamy became known for his mercy and generosity toward those he captured on his raids. This reputation earned him another nickname, the "Prince of Pirates". He likened himself to Robin Hood, with his crew calling themselves "Robin Hood's Men"

(Mike Frisch)

May 11, 2024 in Current Affairs | Permalink | Comments (0)

Friday, May 10, 2024

Suspension Proposed For False Statements

False statements in job and judicial applications have led to a proposed one-year suspension from the Illinois Review Board

As charged in Count I of the disciplinary complaint, in 2016, Respondent applied for the position of Associate Judge, and he intentionally made a false statement about his trial experience on the judicial application. He was asked to list two jury cases that he had tried. One of the cases he listed was People v. Castillo. In fact, Respondent had not tried that case. (Tr. 81.)

As charged in Count II of the disciplinary complaint, in 2019, Respondent applied for a position with the McHenry Office to be the first chair trial attorney, prosecuting criminal cases, in a felony courtroom. He intentionally made false statements about his trial experience during an interview for the position, and in several subsequent conversations. He falsely represented that he had tried numerous cases before juries, including narcotics cases, and a DUI case involving five deaths. None of that was true. (Tr. 33, 54-62, 284.)

He was employed by the  the prosecutor's office and seeking a promotion but not secure the judicial appointment; he was terminated when the false statements came to light.

On May 9, 2019, Respondent went to [State's Attorney] Kenneally’s office and offered to resign. (Tr. 248.) According to Kenneally, he was still hoping to salvage Respondent’s employment and keep him as a member of the office, so Kenneally did not accept Respondent’s resignation. (Tr. 248- 50.) During that meeting, for the first time, Respondent said that he had consumed alcohol and prescription medicine the night before the interview, and he did not really remember what happened during the interview. (Tr. 248-50, 254.)

Later that day, Kenneally learned that Respondent had continued to make false statements and minimize his actions during his interview with Randi Freese, which led to Respondent’s termination on May 9, 2019. (Tr. 246, 255.)

Sanction

The Hearing Board found that there was substantial mitigation. (Hearing Bd. Report at 17-18.) Respondent was engaged in charitable work and was active in bar associations. He was involved with the Chicago Angels for five years, which is a charitable organization that helps foster families. He also served on the Board of the McHenry County Bar Association, and he was involved with the Appellate Lawyers Association and the Illinois State Bar Association. Respondent cooperated in the disciplinary proceedings; he has no prior discipline; and two character witnesses, Justice Hutchinson and Jeffrey Kaplan, the Clerk of the Second District Appellate Court, testified on his behalf.

Respondent testified that, after losing his job in 2019, he entered a detoxification program; he went to counseling and therapy; he attended Alcoholics Anonymous and Narcotics Anonymous meetings; and, following a relapse in August 2022, he had been sober for eight months at the time of the disciplinary hearing. (Tr. 360-61.) Respondent also testified he has custody of his stepdaughter, and he values his law license. (Tr. 362-63.) He further testified that his infant son died in May 2020; Respondent’s relationship with his wife deteriorated; and they were in the process of getting divorced. (Tr. 318, 360, 362-63.)

In aggravation, the Hearing Board found that Respondent did not accept responsibility or express sincere remorse; he sought to blame others for mischaracterizing his statements rather than owning up to his fabrications; he engaged in a pattern of misrepresenting his trial experience; he was seeking positions of trust; he disregarded his obligation to be honest in his position as an ASA; and he provided false and misleading testimony. (Hearing Bd. Report at 19-22.)

Bottom line

Respondent’s false statements were a flagrant violation of his obligation to act honestly as an attorney and an ASA. We conclude that a one-year suspension will serve the goals of attorney discipline, including protecting the public, preserving public confidence in the legal profession, and deterring Respondent and other attorneys. For the foregoing reasons, we recommend that Respondent be suspended for one year.

(Mike Frisch)

May 10, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Pump and Dump

An attorney convicted of conspiracy to commit securities fraud and manipulative training has moved for disbarment on consent in Illinois

Beginning no later than September 2014 and continuing until in or around January 2017, Movant conspired to commit the crimes of securities fraud and manipulative securities trading in connection with VMS Rehab Systems, Inc. (“VMS”), and its stock, in violation of Title 18, U.S.C. § 371. Together with his co-conspirators Michael Wexler, Ongkaruck Sripetch, and Brehnan Knight, Movant conspired to conduct an illegal pump-and-dump scheme, a fraudulent scheme that involved the artificial inflation of the stock price of VMS (the “pump”) so that individuals who controlled a substantial portion of the stock could sell shares of that stock at artificially high prices (the “dump”). Movant and his co-conspirators also conspired to conduct a manipulative trading scheme, a fraudulent scheme that involved creating the false and misleading appearance of trading activity for VMS stock and the market for such stock.

During the events described in this statement, Wexler was the chief executive officer of VMS, Sripetch ran a stock promotion website called Stockpalooza and controlled Optimus Prime Financial, Inc., Knight maintained a personal bank account, and Movant maintained a domestic brokerage account.

Movant, Wexler, Sripetch, and Knight agreed that they would carry out the scheme by Movant acquiring millions of shares of VMS stock, purportedly in exchange for providing legal services, and then making misrepresentations to his brokerage firm in order to deposit and trade the shares of VMS through his brokerage account. Sripetch and Knight would then engage in manipulative trading in VMS stock in order to create a false or misleading appearance of active trading in the stock and of the market for the stock. To generate interest in the company and its stock, and to provide material for use in third-party promotions of the stock, Wexler would issue press releases about VMS. Sripetch would promote the stock in order to artificially inflate and maintain the inflated price. Movant would sell the VMS stock from his brokerage account into the open market at the inflated price, and then transfer a portion of the proceeds to a bank account controlled by Knight, who, in turn, would transfer a portion to an account controlled by Sripetch.

Movant, Wexler, Sripetch, and Knight carried out various aspects of their agreement to perpetrate a pump-and-dump scheme between March 2016 and January 2017. Wexler and Sripetch issued promotional materials containing false, misleading, or exaggerated information regarding VMS in order to artificially inflate its share price. Knight and Sripetch engaged in manipulative trading of the stock to affect its price and generate the appearance of demand for the shares. On or about December 21, 2016, Movant sold, or caused to be sold, 5,321,434 shares of VMS stock through his brokerage account for proceeds of $183,057.33. On or about December 23, 2016, Movant transferred $56,500 from his bank account to a bank account controlled by Knight, who then transferred a portion of the proceeds to a bank account controlled by Sripetch.

(Mike Frisch)

May 10, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Time, Thought And Planning

The Newfoundland and Labrador Adjudication Tribunal disbarred an attorney

Martin accepted retainers from A.T. directly in 2015 and as Guardian ad litem of her daughter in 2017. Martin failed to move A.T’s matters forward from the dates of retention to June 2022 when Martin terminated the solicitor/client relationship.  Martin repeatedly lied to A.T. about the progress being made on the matters and deliberately misled her into believing that settlements of the damages claims had been reached for $190,000. The false information provided to A.T. caused her to adjust her affairs and make plans.  When the truth was ultimately revealed A.T. was justifiably upset at Martin’s deception and the realization that plans made based on Martin’s lies could not be carried to fruition.

Martin did not provide his legal services diligently, honestly or in a timely manner. As regards his client, Martin provided inaccurate, misleading and dishonest information with the intent to convey a state of affairs that was never present. He failed to maintain the standards of practice

Martin with intent to further deceive created a “fake email and memo” under the electronic address of Solicitor T.S. and gave these documents to A.T. The documents clearly suggested that A.T.’s legal affairs were to now be handled by Solicitor T.S. Solicitor T.S. to that point had never spoken to A.T.

The sole purpose of the “fake email and memo” was to deceive A.T.  Martin provided the fake documents to A.T. to shield his failures. The creation of the fake documents also brought an unsuspecting member of The Law Society into the unfortunate circumstance that Martin created with A.T.

Sanction

 While the conduct of Martin was repeatedly dishonest over an extended period of time, his direct actions of fraud, forgery and fabrication as regards the “email and memo” are even more troublesome. Martin acted with an intention to deceive and did so without regard to his client or the interests of others who were unwillingly dragged into the matter. His creation of the “fake email and memo” took time, thought and planning.  This overt act to further cover his actions is considered to be a significantly aggravating factor when it comes to determining sanction.

The decision to disbar was unanimous. (Mike Frisch)

May 10, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Side Switch Draws Censure

The New Jersey Supreme Court has censured an attorney for a violation of Rule 1.9(a) as found in the report and recommendation of the Disciplinary Review Board

On June 30, 2006, Russian Media Group, LLC (RMG) filed, in the United States District Court for the Northern District of Illinois (the NDI), a lawsuit against Shai Harmelech and his companies, Cable America, Inc., and USA Satellite & Cable, Inc. (the RMG action).  RMG operated a satellite television service providing Russian language programming to subscribers. In its lawsuit, RMG alleged that Harmelech distributed pirated Russian language television programming, via major satellite television providers, to the residents of twenty apartment buildings throughout the Chicago, Illinois area, in violation of Illinois law. RMG further alleged that it suffered financial harm due to the unfair competitive advantage Harmelech had received by distributing the pirated television programming at a discounted price. Consequently, RMG sought money damages and injunctive relief prohibiting Harmelech from distributing the pirated television programming.

Respondent's role

Here, between May and July 2009, respondent defended Harmelech in the RMG action concerning his client’s illegal distribution of pirated Russian language programming throughout Chicago. During that timeframe, respondent filed numerous submissions, on behalf of Harmelech, in connection with his client’s purported violation of the NDI's preliminary injunction, which directed that his client cease distributing the Russian language programming.

In July 2009, respondent suspended his representation of his client, following Harmelech’s failure to pay his legal fees, and, in January 2011, the NDI formally relieved respondent as counsel. Three months later, in April 2011, Harmelech and RMG executed a settlement agreement in which Harmelech agreed to pay RMG a total of $261,374.76, via the release of escrow funds, a lump sum payment of certified funds, and monthly installment payments. Harmelech also consented to the issuance of a $286,374.76 stipulated judgment against him, which judgment RMG would not seek to enforce provided that Harmelech satisfied his $261,374.76 payment obligation. Following the execution of the settlement agreement and the issuance of the stipulated judgment, Harmelech appeared to have satisfied only $131,374.76 of his total payment obligation.

Thereafter, in July 2012, respondent filed the Superior Court action against RMG and Harmelech, alleging that he had a lien on the escrow funds RMG had received from Harmelech. Two years later, in August 2014, respondent and Casco Bay, an entity owned solely by respondent and his wife, executed a settlement agreement with RMG in the Superior Court action. Specifically, RMG agreed to assign Casco Bay its rights against Harmelech under the April 2011 settlement agreement and the May 2011 stipulated judgment underlying the RMG action. Respondent agreed to share with RMG a portion of the funds he intended to recover from his former client and to keep RMG reasonably informed regarding his collection efforts.

Following RMG’s assignment of its rights to Casco Bay, between December 2014 and January 2017, respondent, either through himself, pro se, or through Casco Bay, filed three lawsuits in the NDI, primarily against Harmelech, individually, seeking to enforce the RMG judgment against his former client by alleging, among other legal theories, that Harmelech fraudulently had concealed his assets from his creditors, such as respondent. In December 2017, after Harmelech had paid all of respondent’s outstanding legal fees from the 2009 representation, respondent filed a motion with the NDI seeking to reopen the RMG action because of Harmelech’s purported failure todisclose all his financial  information. Respondent alleged that he had standing to reopen the RMG action “based solely on his status as the assignee of the RMG judgment.” In July 2019, the Seventh Circuit affirmed the NDI’s dismissal of respondent’s three lawsuits against Harmelech, along with his motion to reopen the RMG matter.

Respondent conceded that his 2014 through 2017 enforcement actions were materially adverse to the interests of Harmelech, his former client, who did not provide respondent informed written consent to enforce the RMG judgment. Respondent, however, challenged the presenter’s theory that his 2009 representation of Harmelech against RMG was the “same” matter as his subsequent actions to enforce the RMG judgment against his former client.

Violation

In this case, respondent, through Casco Bay, acquired RMG’s rights underlying its settlement and judgment against his former client. Thereafter, respondent utilized those rights, first through his representation of Casco Bay, and later through himself, as a pro se litigant, to step into the shoes of RMG, his former client’s adversary. Stated differently, respondent “switched sides” and occupied the same legal position as RMG, in order to collect the funds his former client owed to RMG in connection with the earlier litigation – the same litigation in which respondent had defended his former client. Using RMG’s rights against his former client, respondent filed three separate NDI collection lawsuits and even attempted to reopen the same RMG action in which he had defended his former client, in order to obtain additional information regarding Harmelech’s finances. Moreover, respondent’s actions were not merely for his own selfbenefit. Specifically, pursuant to his August 1, 2014 settlement agreement with RMG, respondent was obligated to provide RMG a portion of the funds he had intended to recover from his former client and to keep RMG reasonably apprised of his collection efforts. Consequently, respondent not only inserted himself into the original dispute between RMG and his former client, but he also aligned himself with RMG by agreeing to share his recovery with the adversary of his former client.

(Mike Frisch)

May 10, 2024 in Bar Discipline & Process | Permalink | Comments (0)

Fatherhood

The Connecticut Appellate Court affirmed the grant of summary judgment on claims arising from findings that the defendant had falsely claimed that plaintiff had fathered her two children.

The plaintiff is a Kuwaiti citizen who has served as Kuwait’s Ambassador to Austria and as its Permanent Representative to the United Nations International Organizations in Vienna since September, 2013. The defendant is a citizen of Morocco who maintained residences in Morocco, Austria, and Greenwich, Connecticut.

The parties met in 2001 and subsequently began a romantic relationship. Despite that ongoing relationship, the defendant married Ahmad Al Saad in 2007. The defendant at that time represented to the plaintiff that Al Saad was homosexual, that her relationship with Al Saad was not sexual in nature, and that they married only for family and social reasons for Al Saad’s benefit.

DNA confirmed that the plaintiff had not fathered defendant's two children.

The parties married in Kuwait in 2013. Between 2007 and 2015, the plaintiff transferred more than $187 million to the defendant while under the misapprehension that S was, in fact, his child.

Unbeknownst to the plaintiff, the defendant began a romantic relationship with Mohsine Karim-Bennani in 2014. The defendant became pregnant and again represented to the plaintiff that he was the biological father, though she knew that was false. As the defendant admitted in her June 6, 2019 response to the plaintiff’s interrogatories, she ‘‘knew the paternity of each of her biological children from the time she was first aware that she was pregnant with each of her biological children.’’ (Emphasis added.)

The award below was, as they say, not chicken feed

The court thereafter entered an order awarding the plaintiff $192,111,387.20 on the fraudulent misrepresentation count, trebled damages pursuant to General Statutes § 52-564 on the statutory theft count that totaled $576,335,551.60, and $6,250,000 on the unjust enrichment count with respect to the defendant.

The court concluded that the claims were not barred by the statute that precludes a cause of action predicated on adultery

Section 52-572f provides: ‘‘No action may be brought upon any cause arising from criminal conversation.’’ Historically, criminal conversation was a common-law action synonymous with adultery...

The operative complaint in the present case does not include a criminal conversation count, nor does it include the word adultery. The three counts at issue in this appeal—fraudulent misrepresentation, statutory theft, and unjust enrichment—all are rooted in the defendant’s knowingly false representations to the plaintiff that he was the biological father of S and N. The defendant nevertheless insists that those causes of action contravene the proscription of § 52-572f and argues that the trial court, in not enforcing that proscription, committed an error that was obvious and not debatable.

We cannot agree with that proposition. The defendant has provided no authority in which a Connecticut court has held that actions for fraudulent misrepresentation, statutory theft, or unjust enrichment contravene § 52- 572f.

(Mike Frisch)

May 10, 2024 | Permalink | Comments (0)

No Defense At All

The United States Court of Appeals for the District of Columbia Circuit affirmed a contempt conviction

In September 2021, the House Select Committee to Investigate the January 6th Attack on the United States Capitol issued a subpoena to appellant Stephen Bannon to testify and provide documents. Bannon did not comply—he knew what the subpoena required but did not appear or provide a single document. Bannon was later convicted of violating the contempt of Congress statute, 2 U.S.C. § 192, which criminalizes “willfully” failing to respond to a congressional subpoena. Bannon insists that “willfully” should be interpreted to require bad faith and argues that his noncompliance does not qualify because his lawyer advised him not to respond to the subpoena. This court, however, has squarely held that “willfully” in Section 192 means only that the defendant deliberately and intentionally refused to comply with a congressional subpoena, and that this exact “advice of counsel” defense is no defense at all. See Licavoli v. United States, 294 F.2d 207, 207 (D.C. Cir. 1961). As both this court and the Supreme Court have repeatedly explained, a contrary rule would contravene the text of the contempt statute and hamstring Congress’s investigatory authority. Because we have no basis to depart from that binding precedent, and because none of Bannon’s other challenges to his convictions have merit, we affirm.

(Mike Frisch)

May 10, 2024 in Current Affairs | Permalink | Comments (0)