In re Lodes

118 A.D.3d 54, 985 N.Y.S.2d 108

This text of 118 A.D.3d 54 (In re Lodes) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Lodes, 118 A.D.3d 54, 985 N.Y.S.2d 108 (N.Y. Ct. App. 2014).

Opinion

OPINION OF THE COURT

Per Curiam.

The Grievance Committee for the Ninth Judicial District served the respondent with a verified petition dated October 25, 2012, containing six charges of professional misconduct. Following a hearing, the Special Referee sustained all six charges. The Grievance Committee now moves to confirm the report of the Special Referee, and to impose such discipline upon the respondent as the Court deems just and proper. The respondent submits a reply in which he does not dispute the Special Referee’s findings sustaining the charges. However, he “strongly disagrees with the Referee’s characterization of [his] conduct and character.” In an accompanying memorandum of law, the respondent addresses the issue of sanctions, requesting the imposition of a public censure. The Grievance Committee asserts, in response, that a public censure is insufficient for conduct involving the payment of kickbacks.

Charge one alleges that the respondent engaged in illegal conduct, which adversely reflects upon his honesty, trustworthiness, or fitness as a lawyer, in violation of former Code of Profes[56]*56sional Responsibility DR 1-102 (a) (3) (22 NYCRR 1200.3 [a] [3]). Prior to in or about 1991, the respondent met and became friendly with an attorney named Vincent Leibell. Thereafter, the two men became friends, both personally and professionally. In or about 1991, with the ostensible support of Leibell (then Putnam County Executive), the respondent became the Putnam County Attorney—an appointed position that he thereafter held continuously until sometime in or about 2008. The respondent hired one or more additional lawyers for the Putnam County Attorney’s office with the support of Leibell who, by then, had become a New York State Senator.

In or about February 2000, then State Senator Leibell directed the respondent to advise one of the attorneys whom the respondent had hired that, if the attorney wished to keep his contracts for legal services with Putnam County, he would have to hire Leibell as a consultant and pay Leibell a substantial sum of money. The respondent did as Leibell directed, and came to believe that the attorney made substantial cash payments to Leibell.

In or about 2001, the Putnam County Foundation (hereinafter the Foundation), a not-for-profit corporation, was formed at the impetus of Leibell, by one or more individuals, for the purpose of developing senior housing within Putnam County. The Foundation was initially funded by “member items,” also known as “discretionary funds,” that were made available to it by Leibell. From in or about December 2001 through in or about April 2005, the respondent served as the part-time Executive Director and legal counsel for the Foundation. Under the terms of the contract, which the respondent executed with the Foundation in December 2001, he was to receive no monetary compensation for his services. Instead, a barter arrangement was negotiated under which, in exchange for the respondent’s above-described services, the Foundation would permit the respondent to maintain his law offices within the confines of the Foundation’s offices; pay all costs and expenses associated with that space through on or about August 31, 2002, after which the respondent would pay only $350 per month of the larger, total office rental cost; pay for the cost of utilities within the office (including, inter alia, telephone and cleaning services); and pay for the respondent’s Lexis/Nexis on-line legal research expenses. In or about the summer of 2002, Leibell advised the respondent that additional funds were being obtained for the Foundation, which would enable it to thereafter pay for “staff” and “legal counsel.”

[57]*57During the period beginning in or about December 2003, and on one or more occasions thereafter, through in or about April 2005, the respondent submitted invoices to, and received payments from, the Foundation, for the legal services he rendered to it. Each time the respondent received such payments, Leibell demanded that the respondent take half of the respondent’s post-tax earnings from the Foundation, and pay it to Leibell in the form of a cash payment. Between in or about December 2003, and in or about January 2005, the respondent made multiple such cash payments to Leibell, as demanded.

On or about December 6, 2010, in the United States District Court for the Southern District of New York, Leibell pleaded guilty to one count each of obstruction of justice and subscribing to false and fraudulent federal individual income tax returns, in violation of 18 USC § 1503 and 26 USC § 7206 (1), respectively, based on the facts and events arising from his conduct in connection with the above-described kickback scheme, and his subsequent efforts to conceal the same. Leibell was disbarred by this Court on June 2, 2011 (see Matter of Leibell, 86 AD3d 235 [2011]).

Charge two alleges that the respondent engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation, in violation of former Code of Professional Responsibility DR 1-102 (a) (4) (22 NYCRR 1200.3 [a] [4]), based upon the allegations specified in charge one, and the following: From in or about February 2000, until sometime in or about 2010, the respondent failed to disclose, or otherwise report, Leibell’s demands for kickbacks or payments to the Putnam County Foundation’s Board of Directors, law enforcement, attorney grievance authorities, or any other authority empowered to investigate or act upon the disclosure. In or about 2010, the respondent was finally contacted and questioned by the United States Department of Justice, which was already investigating Leibell’s above-described conduct, at which time he disclosed Leibell’s demands, and the payments that had been made to Leibell, for the first time.

Charge three alleges that the respondent failed to comply with his obligation as an attorney to report his knowledge of another attorney’s conduct that raises a substantial question as to that attorney’s honesty, trustworthiness, or fitness to practice law in violation of former Code of Professional Responsibility DR 1-103 (a) (22 NYCRR 1200.4 [a]) and Rules of Professional Conduct (22 NYCRR 1200.0) rule 8.3 (a), based upon the allegations specified in charges one and two.

[58]*58Charge four alleges that the respondent engaged in impermissible fee-splitting with another lawyer who was not associated in the same law firm, in violation of former Code of Professional Responsibility DR 2-107 (a) (22 NYCRR 1200.12 [a]), based upon the allegations specified in charges one and two.

Charge five alleges that the respondent collected an illegal or excessive fee, in violation of former Code of Professional Responsibility DR 2-106 (a) (22 NYCRR 1200.11 [a]), based upon the allegations specified in charges one and two, and the following: In addition to his work on behalf of the Putnam County Foundation, the respondent maintained an outside private law practice which he operated out of his offices at the Foundation. Although the respondent’s services as in-house counsel and Executive Director of the Foundation had concluded by in or before May 2005, the respondent continued to maintain his personal law office within the Foundation’s office space, and continued to accept and enjoy the compensation benefits of the above-described barter arrangement, until sometime in October 2005.

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Cite This Page — Counsel Stack

Bluebook (online)
118 A.D.3d 54, 985 N.Y.S.2d 108, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-lodes-nyappdiv-2014.