Minnesota Disbars Attorney For Bankruptcy Fraud

A lawyer allegedly spent years assisting a client in hiding assets from a bankruptcy trustee and creditors. The Minnesota Supreme Court entered an order disbarring the attorney on December 30, 2022. No. A-19-0864. There was also a federal prosecution.

https://www.wctrib.com/news/local/former-willmar-attorney-gregory-anderson-to-serve-18-months-for-bankruptcy-fraud-for-hiding-clients-assets

California Has Proposed An Amendment To Rule 8.3

The California Bar has taken some public criticism for the Girardi and Avenatti scandals. California does not have an In re Himmel, 125 IL 2d 531, 533 (1988) type reporting obligation that requires an attorney to report certain types of criminal or fraudulent conduct by another attorney. This proposed Rule 8.3 would go a long way to correcting this problem. In my opinion, California should adopt this reform. The obligation of reporting wrongful conduct is a serious one but the obligation is limited to circumstances where the lawyer is aware that another lawyer is engaged in serious wrongdoing.

Proposed Rule 8.3: Reporting Professional Misconduct

(a) A lawyer shall inform the State Bar when the lawyer has personal knowledge that another lawyer has committed a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects as prohibited by rule 8.4(b).


(b) For purposes of this rule, “personal knowledge” is distinct from the definition of “[k]nowingly”, “known,” or “knows” under rule 1.0.1(f) and is limited to information based on
firsthand observation gained through the lawyer’s own senses.

(c) This rule does not require or authorize disclosure of information gained by a lawyer while participating in a substance use or mental health program, or require disclosure of information
protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.8.2; the lawyer-client privilege; or by other rules or laws, including information that is
confidential under Business and Professions Code section 6234.15

Comment

[1] This rule does not abrogate a lawyer’s obligations to report the lawyer’s own conduct as required by these rules or the State Bar Act. (See, e.g., rule 8.4.1(d) and (e); Bus. & Prof. Code, §
6068, subd. (o).)

[2] The duty to report under paragraph (a) is not intended to discourage lawyers from seeking counsel. This rule does not apply to a lawyer who is consulted about or retained to represent a
lawyer whose conduct is in question, or to a lawyer consulted in a professional capacity by another lawyer on whether the inquiring lawyer has a duty to report a third-party lawyer’s
professional misconduct.

[3] If a lawyer reasonably believes* that it would be contrary to the interests of a client of the lawyer or a client of the lawyer’s firm promptly to report under paragraph (a), the lawyer
should report as soon as the lawyer reasonably believes* the reporting will no longer cause material prejudice or damage to the client. The lawyer should also consider the applicability of other rules such as rules 1.4 (the duty to communicate) and 1.7(b) (material limitation conflict).

[4] Information about a lawyer’s misconduct or fitness may be received by a lawyer while participating in a substance use or mental health program, including but not limited to the
Attorney Diversion and Assistance Program. (See Bus. & Prof. Code, § 6234.) In these circumstances, providing for an exception to the reporting requirement of paragraph (a) of this
rule encourages lawyers to seek treatment through such programs. Conversely, without such an exception, lawyers may hesitate to seek assistance from these programs, which may then result in additional harm to their professional careers and additional injury to the welfare of clients and the public.

[5] In addition to reporting professional misconduct as required by paragraph (a), a report may also be made to another appropriate agency. A lawyer must not threaten to present criminal,
administrative or disciplinary charges to obtain an advantage in a civil dispute in violation of rule 3.10.


[6] A failure to report may also implicate rule 8.4(a) with respect to the prohibitions against assisting, soliciting, or inducing another lawyer’s ethical violation; see also rule 5.6(b) and
Business and Professions Code section 6090.5 with respect to the prohibition on agreements that preclude the reporting of a violation of the rules.

[7] Communications to the State Bar relating to lawyer misconduct are “privileged and no lawsuit predicated thereon may be instituted against any person.” See Business and Professions
Code section 6094; but see Business and Professions Code section 6043.5 with respect to criminal penalties for false and malicious reports or complaints.

If you have a question about this post, do not hesitate to contact us.

Ed Clinton, Jr.

http://www.clintonlaw.net

Avenatti Sentenced to 14 Years In Prison

https://www.huffpost.com/entry/michael-avenatti-sentenced_n_638e5a9fe4b07530543d17cb

Avenatti will spend significantly more time in prison that Elizabeth Holmes. The court may have imposed this sentence because he was an attorney and because he, like Tom Girardi, engaged in a pattern of funding his lifestyle with client settlement funds.

This is another instance where the State Bar of California did not do enough to prevent harm. There were numerous complaints about Avenatti failing to hand over client funds, but the California State Bar did not act quickly enough. It took federal indictments to effectively end Avenatti’s legal career.

Automatic Disbarment

New York has disbarred a lawyer who was convicted of conspiracy to commit arson and possession of an unregistered destructive device in violation of 18 USC §§ 371 and 844(i) and 26 USC §§ 5861(d) and 5861(f). The device was used to damage an unoccupied New York police car during the George Floyd protests. Matter of Mattis 2022 NY Slip Op 06438.

California Bar Issues Girardi Letter

The California Bar has issued a report on its own handling of Tom Girardi, who was disbarred last year. The report includes a chart of all 205 complaints that were filed against Girardi during his career, three of which resulted in his disbarment. The names of the claimants are not disclosed. The type of complaint and the disposition is recorded.

There were numerous matters described as “failure to account, deposit” going back many years. These appear to be complaints from clients who were concerned that Girardi had not accounted for funds in his possession. There were insufficient funds notices for his trust account going all the way back to 2006. Girardi appears to have had so much clout that no one would investigate him. Had the California Bar forced him to disclose his trust account transactions in 1985 or 2006, it is possible that many clients would have been protected.

This entry in the report from 1985 is alarming:

85‐O‐12626 5/31/1985 2/6/1987 Failure to account, deposit; failure to perform, delay,
abandonment of client.


Closed ‐‐ Investigation ‐‐ Insufficient Evidence

So, it took the Bar almost 19 months to determine whether or not Girardi had failed to account for a client’s funds.

The most serious problem here is that there were several complaints against Girardi, going back to 1985, in which his failure to promptly to pay clients was an issue. This case is reminiscent of the Madoff Ponzi scheme in which a trusted financial advisor was able to fool securities regulators for many years before he eventually ran out of money.

Ed Clinton, Jr.

Former Judge Receives Reprimand in Alabama

On September 16, 2022, the Alabama Supreme Court announced a public reprimand for a former judge.

“Enterprise attorney, Christopher Mark Kaminski was issued a public reprimand with general publication on September 16, 2022, as ordered by the Disciplinary Board of the Alabama State Bar, for violating Rules 8.4(a), (d) and (g) [Misconduct], Alabama Rules of Professional Conduct. In May 2015, Kaminski was appointed as the district court judge for Coffee County and subsequently elected to a full term on November 8, 2015. In September 2018, the Judicial Inquiry Commission began an investigation after receiving a complaint that Kaminski was involved in an extra-marital relationship with attorney Amy Marshall. On July 16, 2019, the Office of General Counsel received a complaint filed by the Judicial Inquiry Commission alleging a number of violations of the Canons of Judicial Ethics. While engaged in the romantic relationship with Marshall, Kaminski routinely appointed Marshall to cases over which Kaminski presided and took judicial action in cases where Marshall was of counsel of record before and after the relationship became public. Kaminski subsequently admitted to violating Canons 1, 2, 2A, 2B, 2C and 3C(1) of the Canons of Judicial Ethics. As a result, Kaminski resigned his position as district court judge and agreed to never seek judicial office again.”

Use of Client Names In Attorney Marketing Materials

In July 2022, the Orange County Bar Association issued an advisory opinion that holds that client consent is required before using the name of a client in marketing materials for the lawyer’s business.

The Digest of the Opinion states: Absent informed client consent, the duty of confidentiality precludes an attorney from including on her bio or resume or in other marketing materials the names or other information about her representation of a client or former client if the listing would be embarrassing or detrimental to that client or the client requested it to be kept confidential. An attorney also may not suggest that she regularly represents a client absent that client’s informed consent. In addition, even if listing a representation would not be embarrassing or detrimental to the client, and thereby not a breach of duty of confidentiality, an attorney still would be precluded from listing the client representation if the listing is in any way misleading.

I agree with this advisory opinion. Even client’s whose cases went to trial and resulted in a verdict may not want their identity disclosed or their matter discussed. There is one caveat: if the representation results in a published opinion the lawyer can certainly discuss the opinion or list the opinion on his website or resume. What you should not do is to disclose any confidential facts about the client.