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.
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.
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.
The Supreme Court of Florida recently decided The Florida Bar v. Derek Vashon James, NO. SC20-128 (November 18, 2021). During a remote deposition, the attorney for one of the parties in a worker’s compensation proceeding coached the witness by sending text messages to the witness with suggested answers to questions. Opposing counsel noticed that the witness was reading text messages and later received some of the messages when they were inadvertently sent to her. She filed a motion for a protective order. “The judge found that the text messages were sent during the deposition, not during a break in the questioning, and that they were not protected by attorney-client privilege, contrary to Jame’s claims.”
The disciplinary referee “found that James’s texts to [the witness] while she was being questioned, telling her what to say, how to answer, to avoid providing certain information, to remember a deposition but not discuss certain checks, and to not give an absolute answer were dishonest.” p. 5. “The referee found the following aggravating factors were present: (1) dishonest or selfish motive; (2) refusal to acknowledge the wrongful nature of the conduct; and (3) substantial experience in the practice of law. In mitigation, the referee found (1) the absence of a prior disciplinary record; (2) full and free disclosure to the Bar or cooperative attitude toward the proceedings; and (3) good character or reputation.”
The referee found that the attorney had violated Rule 3.4(a) (“a lawyer must not … unlawfully obstruct another party’s access to evidence or otherwise unlawfully alter, destroy, or conceal a document….”). The Supreme Court of Florida affirmed that finding. The Supreme Court reversed the referee’s finding that the attorney had not violated Rule 8.4(d) (“a lawyer shall not engage in conduct in connection with the practice of law that is prejudicial to the administration of justice….”). The Supreme Court of Florida found that the behavior of the attorney warranted a ninety-one-day suspension.
West Virginia, like many other states, requires a lawyer to disclose whether or not he has legal malpractice insurance. This disclosure is important because insurance is usually the only way for a lawyer to defend or pay a negligence claim. The case Lawyer Disciplinary Board v. Curnutte, No. 19-0636 discusses this issue in some detail and affirms a recommendation for a three-month suspension.
This lawyer disciplinary proceeding originated with a “Statement of Charges” by the Lawyer Disciplinary Board (“LDB”) against Scott A. Curnutte (“Mr. Curnutte”) alleging that he violated the West Virginia Rules of Professional Conduct by providing false information about his professional liability insurance coverage to the West Virginia State Bar (“State Bar”). For three consecutive fiscal years, Mr. Curnutte submitted his annual Financial Responsibility Disclosure (“FRD”) falsely certifying that he was covered under a policy of professional liability insurance, when, in fact, he had no such coverage. He also lied about having such coverage to a lawyer he employed, causing that lawyer to similarly provide false information to the State Bar.
The Hearing Panel Subcommittee (“HPS”) of the LDB has concluded, and Mr. Curnutte and the Office of Lawyer Disciplinary Counsel (“ODC”) have stipulated, that Mr. Curnutte’s dishonesty violated the Rules of Professional Conduct. The HPS recommends that this Court suspend Mr. Curnutte’s license to practice law for one-hundred days. In addition, the HPS recommends that Mr. Curnutte be required to complete an additional six hours of Continuing Legal Education in ethics; to comply with the duties of suspended lawyers set out in Rule 3.28 of the West Virginia Rules of Lawyer Disciplinary Procedure (“RLDP”); to reimburse the costs of these proceedings; and to fully and accurately disclose to the LDB what efforts, if any, he has made to procure professional liability insurance. After a careful review of the record developed in this disciplinary proceeding, and upon a thorough consideration of the parties’ briefs, their oral arguments, and the relevant law, we conclude that Mr. Curnutte has twice violated a Rule of Professional Conduct as alleged. However, we determine that a ninety-day suspension with automatic reinstatement pursuant to RLDP 3.31, along with the other recommended sanctions modified to comport with automatic reinstatement, provides an adequate sanction for Mr. Curnutte’s misconduct.
Comment: Please get malpractice insurance. Failing to get it can really cause an injured party to lose their recovery. Claiming that you have it when you don’t will result in discipline.
Ed Clinton, Jr.
The Truman Show was a successful movie starring Jim Carrey in which he played the role of Truman Burbank who lives an ordinary life. What Truman does not know is that the entire world around him is composed of actors. Truman is the star of a television show in which he is the only “real” person. There are many lessons to be learned from this sad case.
Yesterday the Illinois Supreme Court entered an order disbarring Vincent Porter, an attorney who the Court believes engaged misconduct serious enough for disbarment. Porter is an attorney and also acts as a sports agent. He did not realize it, but he came to star in his own version of The Truman Show, which ultimately led to his disbarment.
Vincent Porter came to star in his own version of The Truman Show. The transaction he was involved with was a sting operation set up by the FBI. The main witness against him was Marc Pennebaker, an FBI agent who set up the entire scam and recorded hours of conversations with Porter and others discussing a litany of fraudulent actions he was planning to perform, but never did. There were no investors. There was no deal. There were no victims. There was no financing. All that resulted from the FBI operation was the disbarment of Vincent Porter, whose greatest sin was, in my opinion, that he was duped by the FBI and failed to take measures to protect himself. His disbarment is a direct result of his failure to document precisely who he was representing and what his duties were as a lawyer. He was also fooled by a confidential informant who knew what to say, how to say it, when to say it and to record it.
This is how the Hearing Board described the charges:
The Administrator brought a two-count complaint against Respondent charging him with misconduct arising out of his participation in a purported deal to purchase Burger King franchises and related property. The deal, in reality, was part of an FBI sting, which culminated in Respondent’s arrest and eventual entry into a deferred prosecution agreement. Because of his role in the purported deal, Respondent was charged with assisting a client in conduct the lawyer knows is fraudulent, in violation of Rule 1.2(d); making statements of material fact or law to a third person which the lawyer knows are false, in violation of Rule 4.1(a); failing to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client, in violation of Rule 4.1(b); committing a criminal act that reflects adversely on his honesty, trustworthiness, or fitness as a lawyer, in violation of Rule 8.4(b); and engaging in dishonesty, in violation of Rule 8.4(c). Hearing Board Opinion January 18, 2019 at 2.
According to the ARDC and the Hearing Board, “Respondent was a participant in, and counsel to, a group of individuals that planned to defraud investors in a real estate transaction.” Further, Porter was accused of making false statements and withholding information about the transaction.
Porter became involved with Joseph Vaccaro who was being investigated by the FBI. Billy Crafton, a confidential information, contacted Vaccaro Vaccaro then introduced Porter to Crafton, who held meeting and made recordings. Crafton, Vaccaro and Porter discussed a scheme under which they would create an entity to purchase 13 Burger King Restaurants and sell those restaurants to a group of professional athletes at an inflated price. Porter met with Crafton and Vaccaro and later met with Pennebaker.
There is an old saying that if you meet with a group of investors and you have not clarified who you represent, it will later turn out that you represented all of them. It apparently never occurred to Porter to prepare an engagement letter which would have identified his client or clients. Had he taken this small step, it is possible that this entire fiasco could have been avoided. Because he did not protect himself or think about the attorney-client relationship, the ARDC alleged and the Hearing Board found that Porter represented a group of investors including himself, a confidential informant (Crafton) and another target of the investigation (Vaccaro).
Back to the Facts:
Respondent testified he also discussed the Burger King deal with Crafton at a restaurant in Chicago. An audio recording of a meeting between Respondent and Crafton on July 22, 2014 reflects the following statements:
Respondent indicated he was conducting due diligence and would be handling the legal side and structuring the LLCs;
Respondent and Crafton agreed that the real purchase price for the restaurants was $16 million, but Crafton would tell investors that the entire $20 million was going toward the deal;
Respondent confirmed that Crafton should not disclose to potential investors that Respondent, Crafton and Vaccaro would be taking $4 million off the top; Crafton should state that the other 50% stake in the Burger Kings would be owned by a group of New York investors whose identity he did not know; Crafton should not reveal that, in actuality, Vaccaro and Respondent would own the remaining 50% of the Burger Kings; and Crafton should deny any ownership interest or receipt of kickbacks;
Respondent indicated he would create multiple LLCs to make it appear that another group of investors would own 50% of the Burger Kings; When Crafton asked for confirmation that he should not disclose the actual structure of the deal, Respondent replied “Yeah, we’d all be committing suicide . . . you know, career suicide;”
Respondent and Crafton referred to a “home run deal” that the investors would not know about, and a “single” deal. The two deals were also characterized as an “A” deal and a “B” deal; and Respondent indicated he has the experience to do more deals in the future.
Hearing Board Opinion at pages 6-7.
Porter then prepared an Operating Agreement an LLC which was to be owned by the investors brought to the deal by Crofton. Hearing Board at 8. (Here again, the engagement letter would have greatly assisted Porter. Had he created an engagement letter he would have had to figure out who his client was. He might have chosen to represent Crofton or he might have chosen to represent the “investors.” Either choice would have been better than no choice at all because he could have then sorted out what his professional duties were.).
The October 1, 2014 Meeting
Porter agreed to meet with Pennebaker (posing as a financial advisor), Vaccaro and Crafton at Crafton’s office in San Diego. Another FBI agent played the role of “potential investor.” The meeting was, of course, recorded and Porter was arrested after the meeting was over. The Hearing Board explained:
On October 1, 2014 Pennebaker, again posing as a financial advisor, met with Respondent, Vaccaro and Crafton at Crafton’s office in San Diego. Pennebaker brought along another undercover FBI agent who posed as a potential investor. Both video and audio recordings were made of the meeting. (Tr. 78-79, 116, 125-26, 139, 150).
Pennebaker testified the purpose of the meeting was to gather more information and evidence relating to the Burger King investment. During the meeting Respondent stated the final details of the transaction had not been negotiated, but funds would be received from a New York investment group which would have a 50% ownership stake. When Pennebaker asked about the $37 million purchase price, Respondent again indicated the price had started higher and had been negotiated down. Respondent indicated he would be handling the legal end of arranging the deal, although the closing would be handled by Virginia attorneys, and he explained he was not taking any stake in the deal because as a lawyer doing the legal work, he did not want to create a conflict of interest for himself. (Tr. 84, 139, 141, 150; Adm. Ex. 11, Oct. 1, 2014, Track 5, 6, 7).
Respondent testified the information he presented at the meeting was given to him by Vaccaro and Crafton. He acknowledged that the pitch they made was based on a valuation of $40 million for the Burger King restaurants, with Crafton’s group of ten investors contributing a total of $20 million for 50% ownership of the Burger Kings and Vicar’s group owning the other 50%. Respondent recalled the purchase price was represented to be non-final at all times, and he advised Pennebaker that all the details would be disclosed once the deal was made. (Tr. 79-82, 207-08).
Respondent testified that no documents were signed at the October meeting and no papers changed hands. He denied knowingly making any misrepresentations to anyone or misrepresenting anything to the point of putting it on paper. (Tr. 81, 209, 214).
The Hearing Board
Porter attempted to defend himself on the ground that he did not represent any of the parties involved. The ARDC alleged that Porter represented a group of investors including himself and Vaccaro. The Hearing Board disagreed and concluded in Delphic fashion “We find that an attorney-client relationship was established.” Hearing Board at 12. (Note the problem – since Porter did not prepare and make everyone sign an engagement letter he lost the opportunity to decide who he would represent.)
We find that an attorney-client relationship was established. Although we did not hear testimony from Vaccaro or Crafton, we reviewed numerous statements made by Respondent during meetings and telephone conversations, which statements demonstrate he was acting as the attorney for the business group proposing the investment. In July 2014, he indicated to Crafton that his role was to handle the legal side of the transaction, conduct due diligence, and structure LLCs. He also drafted a preliminary version of an LLC operating agreement and provided that document to Crafton. When speaking to Pennebaker in September, Respondent stated his role was to handle the legal work for the deal; he was involved in due diligence and negotiations with Burger King; and funds from the investors would be deposited into his attorney IOLTA account. At the October in-person meeting, Respondent again stated that his role was to handle the legal end of the transaction.
While Respondent consistently disavowed that he would handle the actual closing, as that work had to be done by Virginia attorneys, the closing was only a portion of the legal work necessary for completion of the deal. By Respondent’s own representations, he held himself out as being responsible for the legal side of the transaction and took actions in accordance with his role as attorney. We find, therefore, that the predicate relationship for Rules 1.2 and 4.1 has been established.
Rule 1.2(d) – assisting client in conduct the lawyer knows to be fraudulent
The Administrator charged Respondent with violating Rule 1.2(d) by conduct including:
participating in discussions with Vaccaro and the informant about offering an investment deal to their professional athlete clients which concealed the true terms of the purchase of the Burger King franchises (including the ownership and purchase price of the franchises) from their clients;
agreeing to do the legal work to effectuate the scheme;
telling the informant to misrepresent the purchase price and ownership of the franchises to investors;
telling Pennebaker that the purchase price of the franchises was $37 million, and Respondent did not have an interest in the deal; and telling Pennebaker and the other FBI agent that another investor group would own the remaining 50% of the franchises.
We find Respondent engaged in each of the foregoing acts and by doing so, assisted clients Vaccaro and Crafton in furthering a fraudulent scheme. Fraud encompasses a broad range of human behavior, including “anything calculated to deceive . . . whether it be by direct falsehood or by innuendo, by speech or by silence, by word of mouth or by look or gesture.” In re Armentrout, 99 Ill. 2d 242, 251, 457 N.E.2d 1262 (1983).
Pennebaker’s testimony, as well as the recordings that were presented to us, showed that the three individuals plotted, as a group, to present a financial transaction in a way that would conceal the benefit they would personally realize from the transaction. That benefit was twofold. First, they intended to collect $20 million for the purchase of a group of properties that cost only $16 million, and then divide the remaining $4 million between themselves. Second, they planned to take a 50% ownership stake in the properties without making any financial investment whatsoever. Their financial benefit and interest in the transaction would not be disclosed to the investors. As we saw from Respondent’s September 19th telephone call with Pennebaker, Respondent represented that the purchase price was $37 million, which was more than twice the price he had discussed with Vaccaro and Crafton. Further, he falsely stated that a New York group was investing funds for the other one-half ownership, and he would have no ownership interest in the properties. In reality, the second group would be Respondent, Vaccaro and Porter, but their identities would be concealed by layers of LLCs. Respondent’s representations to Pennebaker were contrary to the facts set forth in Respondent’s discussions with Vaccaro and Crafton.
We recognize the investors were not misinformed as to their rate of return, and because the deal was never consummated, no one suffered a financial loss. The absence of an actual loss, however, does not erase the misconduct that occurred. By participating in crafting a deal with secret terms, presenting the deal to a potential investor without disclosing those terms, advising Crafton to misrepresent information, and making affirmative false statements regarding the investment, Respondent assisted in perpetrating a fraud.
We reject Respondent’s claim that he did not knowingly commit any misconduct. Pennebaker’s testimony, as well as the recordings, show that Respondent knew the actual terms of the proposed transaction and yet misrepresented those terms and advised Crafton to do the same. Further, Respondent’s claim that he was merely repeating information given to him by Vaccaro carries little weight in light of his role as the attorney structuring the deal. If the valuations for the properties were constantly changing, as he maintained, he had an obligation to ferret out the truth before passing information to potential investors. Further, we view Respondent’s lack of recall of key conversations, his vague testimony, and his portrayal of himself as a victim as nothing more than attempts to disguise his own involvement in the scheme. All in all, we did not find him to be a credible witness. By contrast, we regarded Mark Pennebaker as a reliable and objective witness who testified with precision and clarity.
Respondent had many opportunities to disagree with proposals made by Vaccaro and Crafton, to advise them to take a different course, or at least withdraw from representation and from the deal, but he did not do so. Instead, he became an active participant and took actions in furtherance of the scheme. Therefore we find that he engaged in misconduct in violation of Rule 1.2(d). Hearing Board Pages 13-15.
The Hearing Board also found that Porter violated Rule 4.1(a) knowingly making false statements of fact material fact to a third person and 8.4(c) dishonesty, fraud, deceit or misrepresentation and 8.4(b) a criminal act.
Rule 4.1(a) Violation
The Administrator charged Respondent with violating Rule 4.1(a) by:
falsely telling Pennebaker on September 19, 2014 that the purchase price of the franchises was $37 million; Respondent had no interest in the deal; and another investors group would own the remaining 50% of the franchises (in return for a $17 investment); and
by falsely telling Pennebaker and another undercover agent on October 1, 2014 that other investors would be investing money and those investors would receive the other 50% ownership interest in the franchises.
We have addressed the foregoing misrepresentations in the prior section and determined that Respondent made those statements and he knew they were false. We further find that the $37 million purchase price and the identity of other owners in an investment, including whether or not Respondent had an ownership interest in the deal, would be material to the investors’ decision in proceeding with the transaction. Therefore, we find a violation of Rule 4.1(a).
Rule 4.1(b) – knowingly failing to disclose material facts when disclosure is necessary to avoid assisting a criminal or fraudulent act by client
While the previous charge involved the providing of false information, Rule 4.1(b) involves the failure to disclose material information. The Administrator charged Respondent with violating Rule 4.1(b) by not disclosing to the undercover agent and Pennebaker that:
the true purchase price of the franchises was $16 million; and
Respondent, Vaccaro and Crafton would have an interest in ownership and would receive $4 million dollars out of the investors’ money.
We find this charge was proved. Respondent did not disclose the true nature of the Burger King transaction during his September 19, 2014 telephone call with Pennebaker, or during the October 1, 2014 meeting with Pennebaker and the second undercover FBI agent. As stated previously, the true purchase price and ownership interest was material information that should have been provided to prospective investors, as was the fact that $4 million of the purchase money would be going directly to Respondent, Vaccaro and Crafton. Respondent’s failure to disclose assisted his clients’ criminal or fraudulent conduct in violation of Rule 4.1(b).
Rule 8.4(c) Violation
The Hearing Board found:
Rule 8.4(c) – dishonesty, fraud, deceit or misrepresentation
In In re Edmonds, 2014 IL 117696, par. 62 the Court stated “there is essentially no way to define every act or form of conduct that would be considered a violation” of Rule 8.4(c) as “[e]ach case is unique and the circumstances surrounding the respondent’s conduct must be taken into consideration.” Rule 8.4(c) “is broadly construed to include anything calculated to deceive, including the suppression of truth and the suggestion of falsity.” Id. at 53. Motive and intent are rarely proved by direct evidence and must be inferred from conduct and circumstances. See In re Stern, 124 Ill. 2d 310, 529 N.E.2d 562, 565 (1988)
The Administrator charged Respondent with violating Rule 8.4(c) by engaging in the exact same conduct that was set forth in the Rule 1.2(d) charge. We found with respect to that charge that Respondent assisted in conduct that was fraudulent by making statements that were false, performing legal work to further the scheme, directing Crafton to misrepresent facts, and failing to disclose information that was material to the transaction. Further, his actions were taken with knowledge of the fraudulent nature of the transaction.
Our prior discussions amply support a finding that Respondent violated Rule 8.4(c). His motive and intent to deceive investors was further demonstrated by his agreement that Crafton should not disclose the actual deal to investors; and by his indication that disclosure would be “career suicide.” In addition, the video of the October 1, 2014 meeting demonstrated to us that Respondent had no trouble providing misleading and inaccurate information to the undercover agents. Indeed, we found his cavalier attitude in misrepresenting facts to be deeply disturbing. For the reasons stated, we find Respondent engaged in dishonesty, fraud deceit and misrepresentation.
The Panel also found a violation of Rule 8.4(c) criminal conduct. The Review Board essentially affirmed all the factual findings of the Hearing Board but recommended a suspension of three years. The criminal case against Porter was resolved by a deferred prosecution agreement. The Illinois Supreme Court disbarred Porter on September 21, 2020.
This case is a teaching tool for every lawyer who is in the transactional practice. Porter was unlucky because his mistakes were on tape and on video. He was promised, but never received, a hidden interest in the deal. (That should have been disclaimed in the engagement letter. Porter could have been charged with entering into a contract with a client without advising the client to get his own lawyer, but the ARDC did not bother with that.)
The case worries me. In my career clients have, at times, said all sorts of things to me about what they intended to do. I have tried my best to correct them and stop them from engaging in illegal conduct. Porter did not speak up when the FBI agent and the confidential informant read their lines with Shakespearian skill. He sat mute or agreed or went along with the scheme. He was a dupe or chump. The joke was on him. If you wish to keep your license, you cannot be duped in this fashion. You must speak up when the client proposes something unlawful or inappropriate or just plain deceptive.
Porter did not write an engagement letter or even bother to write emails to the participants so that he could summarize the meetings they held. He had nothing to defend himself with. Because he never did the hard work of figuring out who he represented he never understood his duties to that “client.” Had he done so there is a chance that this fiasco could have been avoided. He should have asked other questions such as “Who represents the investors?” “Has anyone recommended that they engage counsel?” I would have been uneasy at the prospect of doing a deal of that size with no counsel on the other side to protect the imaginary athletes who were investing. That Porter never asked these questions saddens me. He never showed any sign, in my opinion, of trying to protect anyone, client or non-client.
He could also have asked the promoters to get a valuation of the deal by a reputable real estate appraiser. He could have requested audited financials of the “franchises.” Better yet, he should have requested tax returns. That too would have protected him and the investors. The promotors would have made excuses, but Porter could have used that to get out of the deal. (They could never have gotten an appraisal because the Burger King franchises did not exist and no one would sign an appraisal valuing nonexistent franchises. There were no tax returns either because the franchises did not exist.) Corporate lawyers ask questions, lots of questions. It does not appear that Porter asked any questions.
Long ago an experienced lawyer told me “if it looks to good to be true, it probably is.” This is a disbarment that did not need to happen. An engagement letter and a few minutes of careful thought could have avoided all of this.
The most troubling aspect of this case is that Porter never made a dime on the deal and no one lost any money. The deal papers were nowhere near completion and Porter, it appears, was waiting for further information from the “clients.” That is probably why the federal government entered into a deferred prosecution agreement with him. Why is this troubling? There is a chance that Porter is just as much a victim as the supposed investors were. Many lawyers in Illinois have done far worse conduct and not received a disbarment. But for the FBI, this “deal” would never have happened.
In the end of The Truman Show, Truman figures out that he is in a show that his life is onstage that his wife and friends are not real and he leaves the set. “In case I don’t see you, Good Morning, Good Afternoon and Goodnight.” To be a corporate lawyer in our world, you have to be at least as smart as Truman Burbank and know when to walk away.
If you are in the practice of law and you are concerned about something, call an ethics lawyer now. Don’t wait until the “deal” goes bad. Speak up. Ask questions. Ask the questions you would want to know the answers to if you were investing in the venture. Ask for the name of the lawyer or the accountant. If those people don’t exist, you can assume it is a scam of some sort. Warn your clients and protect your license.
Ed Clinton, Jr.
In the Matter of the Bar Admission of David Hammer, 2019AP1974 (Supreme Court of Wisconsin, June 25, 2020), The Wisconsin Supreme Court refused admission to David Hammer who was previously denied admission in Florida. Given the prior misconduct of Hammer in Florida, culminating in disbarment, the Supreme Court of Wisconsin refused to admit Hammer.
¶3 We focus on the Board’s primary reason for declining to certify Mr. Hammer. On August 23, 2010, four years after his admission to practice law, the Supreme Court of Florida issued an emergency suspension against Mr. Hammer’s law license, alleging that he had misappropriated client trust funds. A formal disciplinary complaint followed. Eventually, Mr. Hammer stipulated that in November 2009, Bilzerian had directed that certain outstanding invoices and cost reimbursements not be paid to Mr. Hammer. Mr. Hammer believed these amounts were valid and owed to him. At the time, Mr. Hammer had access to funds in a trust account belonging to another Bilzerian-related entity. In January 2010, Mr. Hammer began taking money from that trust account for his own personal use. In May 2010, the client requested the money held in trust. By then, the trust fund was approximately $27,000 short of funds. To replace the missing client funds, Mr. Hammer accessed funds from another account to which he was a signatory, paying himself director fees and other amounts.
¶4 On August 30, 2011, the Florida Supreme Court issued an order disbarring Mr. Hammer, nunc pro tunc to September 22, 2010, for misappropriating client funds. Eventually, Mr. Hammer distanced himself from the Bilzerian client group, started a business, regained financial stability, and became chief information officer of Elevant, an entity that licenses a case management software program.
¶5 On January 1, 2018, Mr. Hammer applied for admission to the Wisconsin bar. In February 2018, he took and subsequently passed the Wisconsin bar exam. On January 15, 2019, the Board advised Mr. Hammer that his bar application was at risk of being denied on character and fitness grounds. Mr. Hammer, by counsel, requested a hearing and in May 2019, Mr. Hammer also voluntarily commenced an ethics tutorial with Wisconsin Attorney Dean R. Dietrich.
¶6 On August 2, 2019, the Board conducted a hearing at which Mr. Hammer appeared by counsel and testified. The Board also heard testimony from Mr. Hammer’s prospective employers, who advised the Board that they will employ Mr. Hammer as an attorney if he is admitted to the Wisconsin bar. Attorney Dietrich testified in support of Mr. Hammer’s character and fitness to practice law in Wisconsin.
¶7 On September 19, 2019, the Board issued an adverse decision concluding that Mr. Hammer had failed to demonstrate to the Board’s satisfaction that he has the necessary character and fitness to practice law in Wisconsin. The Board cited Mr. Hammer’s Florida disbarment; abuse of process; extensive traffic record; and its conclusion that Mr. Hammer failed to demonstrate significant rehabilitation. The Board added that Mr. Hammer has not reapplied to the Florida bar.
¶23 While we have, on occasion, overruled the Board and admitted certain applicants despite troubling past conduct, we conclude that Mr. Hammer cannot be admitted to their ranks. We acknowledge that a decade has passed since the misconduct culminating in Mr. Hammer’s Florida disbarment and that Mr. Hammer cannot undo his past misconduct. This conundrum does not mean, however, that we are somehow compelled to offer him a law license. While the passage of time may aid a bar applicant’s case, nothing in our prior bar admission cases should be construed to imply that an applicant enjoys a presumption of admission after some period of time has elapsed. Lathrop v. Donohue, 10 Wis. 2d 230, 237, 102 N.W.2d 404, 408 (1960) (observing that the practice of law is not a right but a privilege).
¶24 With the serious nature of his misconduct, coupled with the number of incidents revealing deficiencies (BA 6.03(d), (i)), Mr. Hammer has created a very heavy burden for himself. In such cases the passage of time may not be sufficient to persuade us that an applicant should be admitted to the practice of law.
¶25 Based on our own review of the non-erroneous facts of record before the Board at the time of its decision, we agree that Mr. Hammer has failed to meet his burden under SCR 40.07 to establish the requisite moral character and fitness to practice law “to assure to a reasonable degree of certainty the integrity and the competence of services performed for clients and the maintenance of high standards in the administration of justice.” Accordingly, we affirm the Board’s decision declining to certify Mr. Hammer for admission to the Wisconsin bar.
¶26 IT IS ORDERED that the decision of the Board of Bar Examiners declining to certify that David E. Hammer has satisfied the requirements for admission to the practice of law in Wisconsin is affirmed.
The opinion also discussed several contempt findings against Mr. Hammer.
The ARDC has filed a complaint against a lawyer arising out of his representation of a convicted murderer. The lawyer filed a motion for reduction of the sentence, but failed to take action to obtain a decision on the motion. Unfortunately, the lawyer is also accused of created false correspondence and submitting that correspondence to the ARDC. Count II sets forth the allegations:
“8. On July 12, 2019, the Administrator docketed an investigation of Respondent after receiving a request for investigation from McBride. McBride’s request for investigation stated that Respondent had not communicated with him after an initial contact immediately after Respondent’s appointment to represent McBride. McBride stated that he had made telephone calls and written letters to Respondent but had not gotten responses.
9. On July 23, 2019, Counsel for the Administrator sent a copy of the report to Respondent and requested that he respond to the report within 14 days. Respondent did not respond.
10. On August 14, 2019, Counsel for the Administrator sent Respondent a second letter stating that his response had not been received, he had a duty to comply, and that he should provide his response within seven days.
11. On August 25, 2019, Respondent provided a written response to the ARDC in which he stated he had had two telephone calls with McBride and that he had responded to correspondence from McBride.
12. Respondent’s statements in his August 25, 2019 response were false, because he had not had two telephone calls with McBride and he had not responded to McBride’s correspondence.
13. Respondent knew at the time he provided the August 25, 2019 response in paragraph 12 that the response was false.
14. On February 14, 2019, Respondent appeared for a sworn statement in the ARDC’s Springfield office. Prior to the commencement of the sworn statement, Respondent provided Counsel for the Administrator with 15 letters and represented that the letters were the correspondence he had mailed to McBride.
15. Respondent’s representation that he had mailed the 15 letters to McBride was false, because he did not mail the letters to McBride and created them at a later date.
16. Respondent knew at the time he provided the 15 letters to Counsel for the Administrator that they were false.
17. Respondent generated the letters described in order to mislead the Administrator.
18. During his February 14, 2019 sworn statement, Respondent stated that he provided 15 letters to Counsel for the Administrator which represented his correspondence he had sent to McBride.
19. Respondent’s representation during his sworn statement that he had corresponded with McBride in 15 letters was false, because he had not sent the letters to McBride.
20. Respondent knew at the time he made the statement in paragraph 18 that it was false.
21. During his sworn statement, Respondent also stated “I can’t speak to why he [McBride] wasn’t getting the letters. I mailed them to him.”
22. Respondent’s statement in paragraph 21 that he had mailed the letters to McBride was false, because he generated the letters at a later date to mislead the Administrator.
23. Respondent knew at the time he made the statement in paragraph 21 that it was false.
24. By reason of the conduct described above, Respondent has engaged in the following misconduct:
1, engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010), by conduct including knowingly making the false statements described in paragraphs 11, 14, 18, and 21 and by creating and presenting 15 letters to Counsel for the Administrator which Respondent falsely represented that he had sent to McBride.”
Comment: I have not included the lawyer’s name because these charges have not been proven or admitted. The obvious point here is that if you make a mistake you should tell the truth and own up to it and accept the consequences. Creating false paperwork is only going to make the result worse than it otherwise would have been. Should you have a question concerning an ARDC inquiry, do not hesitate to contact me. I am always available to take calls from lawyers who have questions about the ARDC process.
Ed Clinton, Jr.
Note: this is a complaint filed by the ARDC. The allegations are not proven. There has been no trial and no opportunity to defend the case. The ARDC obtained the factual basis for its allegations from, presumably, a subpoena to Godaddy, an internet provider. The ARDC also placed the lawyer under oath so that the lawyer was required to answer the questions. (Because this is a complaint, I have not included the respondent’s name in this post.)
The Complaint’s main allegations are quoted below:
1. On or about September 11, 2018, Respondent purchased the domain name “firetheliarjudge.com” from GoDaddy, and used GoDaddy to create a website for “firetheliarjudge.com”.
2. Respondent created the firetheliarjudge.com website as part of an anti-retention campaign against Judge Andrew Gleeson, the Chief Judge of the 20th Judicial Circuit, who was running for retention in the November 6, 2018 general election.
3. Respondent linked the firetheliarjudge.com website to a Facebook page entitled “Madeline M. Dinmont”. Madeline M. Dinmont was a fictitious name created and used by Respondent.
4. In or around October 2018, Lori Friess (“Friess”) organized an anti-retention campaign against another judge in the 20th Judicial Circuit, Judge Zina Cruse. Friess called the campaign “Justice For Kane”, in recognition of her two year-old grandson, Kane Friess-Wiley, who had been killed in April 2017. Friess’ daughter’s former boyfriend, Gyasi Campbell (“Campbell”), had been charged with Kane’s murder. On April 2, 2018, Judge Cruse reduced Campbell’s bond from $1 million to $150,000 which allowed Campbell to post bond and be released from custody pending trial.
5. On or around October 4, 2018, Respondent posted the following entry on the firetheliarjudge.com website:
A FAILURE TO VOTE IS A YES VOTE ON RETENTION!
Kane’s founder has a vendetta against a judge who followed the law.
Why Judge Gleeson Must Go!
Judge Zina Cruse is a female African American Judge from East St. Louis. The Justice For Kane anti-retention campaign is the brain child of Gleeson & others to run a female minority judge off the bench in order to preserve their white male privilege.
6. Respondent’s statements described above, that the Justice For Kane anti-retention campaign was the “brain child” of Judge Gleeson and others and Judge Gleeson wanted to run a female minority judge off the bench to preserve his white male privilege was false because Judge Gleeson had no involvement in the Justice For Kane group or any group or effort seeking to remove Judge Cruse from the bench.
7. Respondent knew her statements described in paragraph 5, above, were false at the time she made them and posted them to the firetheliarjudge.com website or she made them with reckless disregard as to their truth or falsity.
8. On or about October 4, 2018, Respondent posted the following entry on the firetheliarjudge.com website:
JFK [Justice For Kane] is a WHITE SUPREMACIST GROUP!
JKF is a front for a WHITE SUPREMACIST GROUP called the National Association for Majority Equality which Judge Gleeson supports. That is why they are targeting judges of color and that is why their members ares [sic] exclusively white.
9. Respondent’s statement that Judge Gleeson supports a white supremacist group called the National Association for Majority Equality (“NAME”) was false because Judge Gleeson did not support or have any involvement with NAME or any white supremacist group or with the Justice For Kane campaign.
10. Respondent knew her statement described in paragraph 8, above, was false at the time she made it or she made it with reckless disregard as to its truth or falsity.
11. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:
- making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraphs 5 and 8, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).
(False and or reckless statements about the qualifications or integrity of a judge
on Facebook page entitled “Madeline M. Dinmont”)
The Administrator realleges and incorporates paragraphs 1 through 10, of Count I above.
12. On or before September 14, 2015, Respondent created a Facebook page entitled “Madeline M. Dinmont” (“Dinmont page”). Respondent used the fictious name Madeline Dinmont in her interactions with GoDaddy concerning the firetheliarjudge.com website.
13. On or about October 5, 2018, Respondent posted the following entry on the Dinmont page:
Gleeson is part of the St. Clair County Secret Order of the
Hibernians. That’s why he uses the Irish clover. Wanna [sic]
guess how many of its members are persons of color? None.
Wanna [sic] see Gleeson in his “chief” regalia?
Respondent then posted a photograph of a Klu Klux Klansman dressed in a white robe and hood with the name tag “Gleeson” pinned to his chest over an Irish clover. The picture also depicted a noose and a confederate flag and was captioned “Vote No Retention!” (see Exhibit 1 attached)
14. Respondent’s posts described in paragraph 13, above, were false because Judge Gleeson was not a member or part of a “secret order of the Hibernians”, he was not a member of the Klu Klux Klan, and the person depicted by Respondent on the Dinmont page was not Judge Gleeson.
15. Respondent knew her postings described in paragraph 13, above, were false at the time she made them or she made them with reckless disregard as to their truth or falsity.
16. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:
- making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraph 13, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).
(False statements to the Administrator)
The Administrator realleges and incorporates paragraphs 1 through 15, of Counts I and II above.
17. On July 2, 2019, Respondent appeared at the Springfield ARDC office to provide sworn testimony related to matters described in this complaint.
18. During the sworn statement, Respondent was asked the following questions and gave the following answers:
Q: Okay. What do you know about the website firetheliarjudge.com?
A: It was a website set up for the anti-retention campaign
Q: And who set it up?
A: I don’t know.
Q: What role did you have in creating either the website or the domain name?
A: I was asked how you go about setting up a domain name and I suggested that they go through GoDaddy.
Q: When you say you were asked, who asked you?
A: Judge Duebbert.
Q: Okay. So did Judge Duebbert set up this website firetheliarjudge.com?
A: I don’t know if he did it or if he had somebody else do it.
Q: You had no involvement in setting up the site?
A: No, and I didn’t manage it either.
Q: Have you ever posted anything to the site firetheliarjudge.com?
19. Respondent’s statement above that she did not know who set up the firetheliarjudge.com website was false because Respondent set up and paid for the website through GoDaddy.
20. Respondent’s statement above that she did not manage the website was false because she managed the website, she linked it to the Dinmont page and she linked it to another website she created entitled “firejudgegleeson.com”.
21. Respondent’s statement above that she never posted anything on the firetheliarjudge.com website was false because she made posts on the website, including the conduct described in Counts I and II in this complaint.
22. Respondent knew that her statements described in paragraphs 19 through 21, above, were false at the time she made them.
23. During the sworn statement on July 2, 2019, Respondent was asked the following questions and gave the following answers:
Q: Okay. So my question is with regard to these entries on firetheliarjudge.com, did you have anything to do with creating, making, or responding to these entries?
A: No. I tried to help them set it up and then it was taken over by somebody who was a non-lawyer.
Q: Okay. And when you said you tried to help them set it up, who are you talking about?
A: Well, the people that were involved in the anti-retention campaign by telling them you can go to GoDaddy and they have templates, that kind of thing.
Q: Okay. And who was that? Who specifically are you talking about?
A: It was Judge Duebbert and his web person.
Q: Who was that?
A: I don’t know. I don’t even know when this was set up.
Q: Were you the domain – did you own the domain name firetheliarjudge.com?
Q: Did you set it up?
A: No, but I tried to help them set it up.
Q: Well, specifically what does that mean?
A: To get into GoDaddy and set up an account.
Q: But you didn’t set up the account at GoDaddy?
A: No, nor did I have control over it.
Q: Do you know what e-mail address they used when they set up the firetheliarjudge.com?
A: I don’t.
Q: Do you know if they used Madeline Dinmont’s e-mail address?
A: I don’t know.
24. Respondent’s statement above that she had no role in creating, making or responding to entries on the website firetheliarjudge.com was false because she did create the website and she did make various postings to the website as described in Counts I and II above.
25. Respondent’s statements above that she did not know when the website firetheliarjudge.com was set up and that she did not own the domain name “firetheliarjudge.com” were false because she set up and paid for the domain name and website firetheliarjudge.com through GoDaddy on or about September 11, 2018.
26. Respondent’s statements above that she did not set up or “have control” over the firetheliarjudge.com website were false because Respondent set up and controlled the domain name and website using her GoDaddy account.
27. Respondent knew that her statements described in paragraphs 24 through 26, above, were false at the time she made them.
28. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:
- knowingly making a false statement of material fact in connection with a disciplinary matter by making the false statements described in paragraphs 19 through 21 and 24 through 26, above, in violation of Rule 8.1(a) of the Illinois Rules of Professional Conduct (2010); and
- conduct involving dishonesty, fraud, deceit, or misrepresentation by making the false statements described in paragraphs 19 through 21 and 24 through 26, above, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010).
(False or reckless statements about the qualifications or integrity of a judge – GoDaddy)
The Administrator realleges and incorporates paragraphs 1 through 27, of Counts I, II and III above.
29. On September 17, 2018, Respondent contacted GoDaddy customer service concerning the website firetheliarjudge.com. Respondent identified herself to the operator as Madeline Dinmont. Respondent also identified herself as the administrator of the website firetheliarjudge.com.
30. During the telephone conversation, Respondent told the operator that she wanted to pay for the firetheliarjudge.com website through PayPal on a “month to month” basis because she would not need the site to be operational after the November 5, 2018 general election.
31. During the telephone conversation, the following exchange occurred:
Operator: That’s why you want to go month to month?
Operator: Makes sense,
Respondent: Because the election will be over the 5th.
Operator: Yeah. And you hope these people read it and do the right thing, right?
Respondent: If only you knew.
Operator: I was glancing through the website, so I hear you.
Respondent: No. I mean, it’s not a very nice person [Judge Gleeson]. And he’s done a lot of things to hurt a lot of people. So that’s part of the reason that we’re getting all the crank calls.
Operator: That’s too bad.
Respondent: You know, this part of the United States, politics is a blood sport.
Respondent: I mean, I will tell you how evil it is. They’ve attempted to set up another judge of a different political party for murder if that tells you anything.
Respondent: And this is the guy who orchestrated it.
Operator: That’s crazy.
Respondent: So we had the Department of Justice in here. No, I’m not kidding you.
Operator: You wonder how people like that stay elected.
Respondent: Well, that’s what we’re working on. And frankly, I’ve never practiced law in a jurisdiction where it was like this.
32. Respondent’s statements in paragraph 31, above, that Judge Gleeson “orchestrated” an attempt to set up another judge for murder were false because Judge Gleeson never engaged in the conduct which Respondent described to the operator.
33. Respondent knew her statements in paragraph 31, above, were false or she made them in reckless disregard of their truth or falsity.
34. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:
making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraph 31, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).
The New Jersey Supreme Court has suspended an attorney for one year for submitting an altered transcript to a law firm when he was seeking employment. The case was decided on March 13, 2020. There were 26 misrepresentations on the transcript. The lawyer had no prior discipline. The court found violations of Rule 8.1(b) and 8.4(d).
In re Seth Asher Nadler, March 13, 2020.