In re Anonymous No. 85 D.B. 88

18 Pa. D. & C.4th 26, 1992 Pa. LEXIS 598
Supreme Court of Pennsylvania·Decided April 16, 1992·No. Disciplinary Docket No. 85 D.B. 88·Published

Opinion

POWELL, Member,

Pursuant to Rule 208(d) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania submits its findings and recommendations regarding the above-captioned petition for discipline.

HISTORY OF PROCEEDINGS

Respondent was suspended from the practice of law in the Commonwealth of Pennsylvania by Supreme Court order dated August 15, 1988. The order was issued pursuant to Rule 214(d), Pa.R.D.E. and referred to the Disciplinary Board in accord with Rule 214(f), Pa.R.D.E.

Respondent’s suspension stemmed from his January 14, 1988, conviction in the U.S. District Court for the [27] Territory of Guam of the offense of misprision of a felony, in violation of 18 U.S.C. §4.*

On August 18,1989, respondent was sentenced to pay a fine of $10,000 and perform 200 hours of community service over a period of one year through the [ ] Bar Association.

On September 20, 1989, the Office of Disciplinary Counsel filed a petition for discipline of respondent based on his conviction.

On October 23, 1989, respondent filed an answer to the petition for discipline.

On February 15, 1990, the parties entered into a stipulation of the facts which led to respondent’s misprision of felony conviction.

Hearings on the matter were held on February 15,1990, and March 19, 1990, before Hearing Committee [ ]. The Hearing Committee filed its report on July 25, 1990, and recommended that respondent receive a public censure for his misconduct.

On August 14, 1990, petitioner filed a brief on exceptions to the Hearing Committee report, and requested that respondent be suspended from the practice of law for a period of at least two years.

The matter was adjudicated at the September 1990 meeting of the Disciplinary Board.

[28] FINDINGS OF FACT

We adopt the following findings of fact which were stipulated by the parties:

(1) Petitioner, whose principal office is located at 300 North Second Street, Harrisburg, Pa., is invested, pursuant to Rule 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and the duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid rules.

(2) Respondent, [ ], was bom in 1944, and admitted to practice law in the Commonwealth of Pennsylvania in 1974. He resides at [ ] with his wife and two minor children. At all times relevant herein, respondent was a partner in the firm of [A] and his practice was concentrated in municipal bond financing. Except for this proceeding, he has never been subject to discipline.

(3) On January 14, 1988, respondent pled guilty in the U.S. District Court for the Territory of Guam to the offense of misprision of a felony (18 U.S.C. §4). By order dated August 15,1988, the Supreme Court of Pennsylvania suspended respondent from the practice of law because of his conviction, and directed that the matter be referred to the Disciplinary Board pursuant to Rule 214(f), Pa.R.D.E., for a hearing in which the sole issue to be determined is the extent of final discipline to be imposed. The factual basis for respondent’s plea of guilty has been fully set forth in a stipulation and allocution (the “Guam allocution”) filed jointly by the United States and respondent at the time of the plea.

[29] FACTUAL BACKGROUND

(4) Beginning in 1985, [B], executive vice-president of [C], an investment banking firm in New York City, asked respondent to have his law firm act as underwriter’s counsel to [C], bond counsel, and/or tax counsel with regard to certain municipal bond issues.

(a) Respondent’s law firm was retained, inter alia, to render opinions regarding the tax-exempt status of a number of bond issues for certain governmental entities within the United States, its territories and trust territories, for which [C] was contemplating acting as underwriter.

(b) One of these issues for which respondent’s firm acted as underwriter’s counsel/bond counsel was the [D] bond issue of October 31, 1985, in the principal amount of $300 million, issued by the [E].

The [F] Fund

(5) A $4.5 million portion of the proceeds of the [D] bonds was placed in an [F] Fund at [G] Bank. [G] acted as trustee of the [F] and also acted as trustee for the [D] bonds.

(a) The [F] was under the control of [C] and was to be used to advance the development of the projects which were to be financed with the proceeds of the [D] bonds.

(b) To the extent the funds were not expended on the projects, they were to be made available to Guam for public infrastructure costs related to such projects.

(6) During 1985 and 1986, [B] submitted and caused to be submitted to [G] various invoices and requisitions requesting payment, from monies in the [F], for services rendered in connection with the projects to be funded by the [D] bonds. At least two of the invoices and requisitions submitted by [B] to [G] were false and fraudulent, as follows:

[30] (a) An [¶] invoice dated January 1,1986, in the amount of $27,500; and,

(b) An [I] invoice dated March 31, 1986, in the amount of $30,000.

(7) Pursuant to the above false and fraudulent invoices, on or about February 28, 1986, (as to [H]) and May 9, 1986, (as to [I]), [G] paid the amount of the invoices from the [F] as requested by [B]. At the time the invoices were submitted to and paid by [G], however, neither respondent nor his law firm had been asked or were otherwise obligated to review the invoices and/or approve their payment.

(8) [B] caused mailings to be delivered in Guam for the purpose of executing this scheme. At the time, however, [B] had not revealed to respondent, and respondent had no reason to believe and was not otherwise aware of, [B’s] fraudulent activities.

(9) On or about November 15, 1986, respondent first discovered or had reason to believe that the [¶] and [I] invoices were false and fraudulent.

(a) Respondent immediately notified both [J], the chairman and chief executive officer of [C], and [K], Esq., outside counsel to [C], of his concerns about the invoices, and sent copies of the relevant documents to [K] by telecopier on November 19, 1986.

(b) Respondent failed, however, to report [B’s] actions to the appropriate authorities under the law of the United States.

(10) In addition, in two letters to [E] dated November 15 and 30,1986, discussing other aspects of the [B] Bonds, respondent did not advise [E] of his discovery of or suspicion about [B’s] activities.

[31] [L] & [M] Credit Union

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In re Anonymous No. 85 D.B. 88, 18 Pa. D. & C.4th 26, 1992 Pa. LEXIS 598 (Pa. 1992).

18 Pa. D. & C.4th 26 (In re Anonymous No. 85 D.B. 88) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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