Filed August 15, 2007
In re Sheldon Bart Nagelberg
Commission No. 04 CH 86
Synopsis of Hearing Board Report and Recommendation
NATURE OF THE CASE: 1) failing to provide competent representation; 2) charging an unreasonable fee; 3) dividing a legal fee with another lawyer who is not in the same firm without the client's consent in writing; 4) engaging in conduct that is prejudicial to the administration of justice; and 5) engaging in conduct which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute.
RULES DISCUSSED: 1.1(a), 1.5, 1.5(f) and 8.4(a)(5) of the Illinois Rules of Professional Conduct and Supreme Court Rule 770.
RECOMMENDATION: Six month suspension, stayed entirely, pending payment of restitution within two years.
DATE OF OPINION: August 15, 2007.
HEARING PANEL: John Steed III, Chair, Leonard J. Schrager and Frederich J. Bingham.
RESPONDENT'S COUNSEL: George B. Collins and Theresa M. Gronkiewicz.
ADMINISTRATOR'S COUNSEL: Wendy J. Muchman.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
SHELDON BART NAGELBERG,
Commission No. 04 CH 86
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing in this matter was held on June 20, 2006 and June 21, 2006, at the Chicago offices of the Attorney Registration and Disciplinary Commission, before a Hearing Board Panel consisting of John Steed III, Chair, Leonard J. Schrager, lawyer member, and Frederich J. Bingham, public member. The Administrator was represented by Wendy Muchman. Respondent appeared in person and was represented by George Collins and Theresa M. Gronkiewicz.
On August 26, 2004, the Administrator filed a one-count complaint against Respondent pursuant to Supreme Court Rule 753(b). The Complaint charged Respondent with incompetence, charging an unreasonable fee and dividing a legal fee with another lawyer without the client's consent in writing. On October 21, 2004, Respondent filed an Answer to the Complaint in which he admitted some of the factual allegations, denied some of the factual allegations, and denied all allegations of misconduct.
The Administrator presented the testimony of Hilary Marek Winniczek, John Beal, Michael Petro, Mark Kadish, Theodore Chung, Paul O'Malley, Danuta Winniczek, and Patrick Collins. The Administrator submitted fifty-nine documentary exhibits. Respondent testified on his own behalf and presented character testimony of Patricia Brown Holmes, Daniel Locallo, Martin Agran and Steven Shobat. Respondent submitted nine documentary exhibits.
On April 5, 2000, the United States of America filed a criminal complaint against Marek Winniczek ("Winniczek") in the United States District Court for the Northern District of Illinois. The matter was entitled, United States of America v. Winniczek, et al ("the Winniczek matter"). The matter charged Winniczek with extortion, mail fraud, and wire fraud as a result of his role in assisting unqualified drivers in obtaining commercial drivers licenses, ("CDL"), in the State of Florida. Winniczek, who was born in Poland, has lived in the United States for approximately thirty years as a resident alien. Winniczek has not achieved citizenship in the United States. (Adm. Ex. 7; Tr. 50).
Beginning in 1996, Winniczek became an interpreter, helping truck drivers pass the written part of the truck driver license exam in Florida. When people took the road exams, Winniczek told them answers so they could pass the exam. In 1996, Winniczek formed a business relationship with Tony Puleo ("Puleo"). From 1996 to 2000, Winniczek and Puleo received money in exchange for giving people papers that stated that they passed both the road and written tests for a CDL. Winniczek stated that they received between $850 and $1,250 per test. (Tr. 50-55).
On April 6, 2000, Winniczek was arrested in Tampa, Florida. As of that date, the government's evidence against Winniczek included statements from numerous persons who had obtained Florida CDLs with Winniczek's fraudulent assistance, and several incriminating audio recordings of conversations between persona acting in an undercover capacity and Winniczek. On April 6, 2000, Winniczek provided FBI agents with substantially truthful information regarding his involvement with the matter, and expressed his desire to cooperate in the investigation. Among other things, Winniczek explained the operation of the scheme, the respective roles of himself and Puleo, and the financial benefits that both derived from their conduct. On the day of his arrest, Winniczek secretly recorded conversations with Puleo in an effort to further expose Puleo's culpability. Winniczek's work with respect to Puleo, resulted in providing the government with information on Puleo which resulted in Puleo's being charged as a codefendant in the matter. (Adm. Ex. 1-6; Tr. 55-59).
On April 13, 2000, Winneczek paid attorney Michael Petro ("Petro") $7,015 as his legal fee, and Petro filed his appearance on behalf of Winniczek. At that time, Petro determined that Winniczek had previously issued incriminating statements to the FBI. As a result of Winniczek's status as a resident alien, the applicable immigration laws, and the fact that the criminal charges against Winniczek involved an aggravated felony most probably mandated Winniczek's deportation, Petro believed it was crucial to resolve Winniczek's matter in the pre-indictment stage to afford the United States Attorney's office discretion in preparation of the charging documents, thereby, possibly avoiding the necessity of Winniczek's deportation. Winniczek's wife was suffering from cancer and he wanted to remain in the United States to assist her in treatment. (Adm. Ex. 8-10, 56; Tr. 60-64).
On April 13, 2000, and again on the following day, Petro and Winniczek met with FBI agents and Assistant United States attorneys ("AUSA") pursuant to a previously negotiated proffer agreement. During these meetings, Winniczek provided additional substantially truthful information relating to the instant scheme and his involvement therein. On May 16, 2000, Winniczek returned to Chicago and testified before the federal grand jury that later returned the indictment in this case. Winniczek stated that his grand jury testimony was truthful. Petro represented Winniczek from April 12, 2000 until May 20, 2000. During that time, Winniczek spoke to Petro on a daily basis. (Adm. Ex. 10, 54; Tr. 62-66).
Between April 7, 2000, and May 25, 2000, Petro had a preliminary agreement with Assistant United States Attorneys, Ted Chung ("Chung") and Patrick Collins ("Collins"), whereby as a result of Winniczek's substantial cooperation with the government and the information previously unknown to the government that he provided against Puleo, the government would agree to a substantial assistance departure resulting in a reduction in his sentence in exchange for his cooperation. As a result of the preliminary posture of the criminal case, no final plea arrangement had been reduced to writing, however, as of May 16, 2000, Winniczek had done everything that he had been asked to do by the government and had substantially assisted in their investigation. (Tr. 66-67).
At all times relevant, the sentencing guidelines that relate to the substantial assistance departure are Sec.5K1.1 of the Guidelines manual. Pursuant to the policies of the U.S. Attorney's Office, since Winniczek had cooperated and also provided information otherwise unknown to the government, which information resulted in the charging of another defendant in the case, a substantial assistance departure would have entitled Winniczek to a departure from
sentencing guidelines in an amount of as much as a fifty percent reduction in his penitentiary term. (Adm. Ex. 40).
In May 2000, Winniczek became nervous about the quality of his representation and started calling other attorneys in Florida. Winniczek was referred to Respondent by Respondent's then brother-in-law, a Florida attorney named Leo Spivak. On May 10, 2000, Winniczek contacted Respondent via telephone to discuss his criminal matter. Winniczek told Respondent about his case, his cooperation and grand jury testimony. Winniczek also told Respondent that Petro was representing him. Winniczek stated that Respondent told him that Petro was "a very inexperienced juvenile attorney." At that time, Respondent and Wiiniczek discussed his case and the events that occurred shortly after Winniczek's arrest. After their discussion, Respondent believed that Winniczek had given the government a false confession. Winniczek told Respondent that he was innocent. Respondent told Winniczek that he had a "big chance to come out of it." Winniczek hired Respondent. Respondent's retainer was $25,000. Respondent told Winniczek that the total fee would be between $50,000 and $70,000 if they went to trial. Winniczek paid Respondent $12,500 right away and gave him another $12,500 when he came to Chicago for his indictment. (Adm. Ex. 52; R. Ex. 1; Tr. 67, 70-74, 453-454).
On May 26, 2000, Respondent filed a substitution of counsel on behalf of Winniczek and on June 1, 2000, Respondent filed his appearance. Respondent paid Spivak one-third of the first $25,000 he received as a referral fee. Respondent did not reduce the referral fee agreement to writing and Respondent did not advise Winniczek that Spivak was receiving a portion of the fee. (Adm. Ex. 11, 49; Tr. 69).
On June 1, 2000, AUSA Chung and Respondent discussed Winniczek's continued cooperation. Respondent stated that he needed to learn more about the case before he could give
a position on behalf of his client. Respondent stated that his reasoning was based on his conversations he had with Winniczek regarding his innocence. Respondent stated that he did explain to Winniczek the benefits and consequences of his continued cooperation. Respondent stated that Winniczek was angry at the government and felt that he had been lied to regarding the issue of deportation. Respondent told Winniczek that if they went to trial, the statements he made to the government would be used against him and negatively affect his case. (Tr. 490-493).
Respondent asked Winniczek to make a write-up of what he thought were the facts of the case. Winniczek also made a tape recording where he described the events that occurred from the date of his arrest, what he said and what they said to him, and about the promises that were made to him by the government, including Patrick Collins saying no deportation. In his writing, Winniczek told Respondent that he really did teach people how to drive and denied that he was a crook. Winniczek told Respondent that with the exception of assisting 10-20 people, he operated an honest business. Respondent stated that he felt Winniczek had a legitimate basis to believe in his innocence. (R. Ex. 3; Tr. 494-497, 499).
On June 20, 2000, the government filed a motion to dismiss the complaint against Winniczek and a motion to file an eight count indictment returned by a federal grand jury against Winniczek in the United States District Court for the Northern District of Illinois, Eastern Division. On June 23, 2000, Respondent met with the Assistant United States Attorneys handling Winniczek's prosecution, Chung and Collins, to discuss whether Winniczek would continue his cooperation with the government. At that meeting, Respondent advised the AUSAs that he would review the information they had provided to him and discuss with Winniczek his options in the case and get back to them. On June 27, 2000, the arraignment was held in the
Winniczek matter. Winniczek entered a plea of not guilty. The matter was assigned to Judge Zagel's call. Also on that date, AUSA Collins wrote to Respondent requesting that Respondent advise whether or not Winniczek would continue to cooperate with the government. Collins advised Respondent in the letter that without Winniczek's commitment to continue to cooperate, they would not be able to recommend to their supervisors that Winniczek's case merited a substantial departure pursuant to Guideline 5K1.1. Winniczek stated that Respondent did not tell him that the government wanted to meet with him regarding his cooperation. (Adm. Ex. 12-16; Tr. 76-77).
After the indictment on June 27, 2000, Respondent told Winniczek that he did not realize that the case was so complicated and he was going to spend a lot of time on the case. Respondent said his fee would be $150,000 plus $20,000 for expenses. Respondent said he was going to hire translators, voice analysis experts, private investigators and more attorneys. Winniczek and Respondent worked out an arrangement to pay the fee. Winniczek paid Respondent $10,000 per month. Winniczek stated that he borrowed money from family and refinanced his house to pay Respondent. Winniczek paid Respondent $170,000. Winniczek stated that he never received an accounting from Respondent. (Adm. Ex. 18; Tr. 78-81).
Winniczek stated that Respondent did not explain to Winniczek that by ceasing to cooperate, he was jeopardizing the substantial assistance departure his previous cooperation would have entitled him to receive, nor did Respondent explain to Winniczek that his case was not triable based upon all of his previous statements. Respondent testified that he did explain these issues to Winniczek. On September 5, 2000, Respondent filed an agreed motion for an extension of time to file pretrial motions on behalf of Winniczek. The basis for Respondent's motion was Respondent's involvement in another federal criminal matter. On October 25, 2000,
Respondent filed another agreed motion for extension of time to file pretrial motions on behalf of Winniczek. The basis for the motion was Respondent's father's illness. (Tr. 76-77, 491-493).
On December 13, 2000, Respondent filed the following pleadings on behalf of Winniczek: a motion to preserve agent's notes on evidence; a motion for disclosure of exculpatory evidence; a motion to require notice of intention to use other crimes, wrongs or acts; a motion for subpoenas to issue pursuant to Rule 17, FRCRP; a motion for FRCRP Rule 16 expert witness discovery; a motion to dismiss counts two and three of indictment on grounds of multiplicity; a motion to dismiss counts four, five, six, seven and eight of indictment on grounds of failure to state a claim; and a motion to dismiss counts one, two and three of the indictment on grounds of failure to state a claim of wire fraud scheme. Respondent stated that three of the motions were unique to Winniczek's case. Respondent also stated that he thought the Motion to Dismiss Counts II and III of the indictment had merit. Respondent stated that it was necessary to perform research on the motion to dismiss. Respondent stated that he does not know where the research cases and notes are located or why they are not in his file. Respondent stated that he performed significant research for his Motion to Dismiss for Failure to State a Claim. Respondent stated that he studied the Florida bribery statutes at the John Marshall CBA library. Respondent does not know what happened to the cases, statutes and notes he recorded and studied for the Motion to Dismiss for Failure to State a Claim. Respondent stated that he performed significant research in preparation for his Motion to Dismiss on Failure to State a Cause of Action. Respondent stated that these motions were specific to the facts of Winniczek's case. Respondent testified that he explained the motions to Winniczek. Judge Zagel did not rule on any of these motions. Respondent stated that he called several times to find out if the judge
had ruled on his motions. Respondent stated that he did not want to anger the judge by filing a motion requesting that the judge rule on his motions. (Adm. Ex. 37; Tr. 82-84, 506-513).
On February 1, 2001, Respondent filed a motion to amend condition of bond on behalf of Winniczek. On April 5, 2001, Respondent wrote a letter to Judge Zagel requesting that the trial date set for June 4, 2001 be rescheduled to a date in late summer or early fall 2001 as a result of Respondent's own divorce and child custody concerns that had arisen, necessitating Respondent's focusing on the issues in his own pending divorce. Subsequently, orders were entered resetting a change of plea hearing for October 17, 2001, then October 31, 2001, and then November 19, 2001. Respondent testified that he explained his personal situation to Winniczek and Winniczek agreed to continue the trial date. By August 2001, Respondent stated he was ready to focus on the Winniczek matter and proceed with a trial. Respondent stated he started working on jury instructions because they helped him define the issues of the case. Respondent stated that he knew Judge Zagel had still not ruled on his motions. Respondent stated the he decided to begin work on the investigation following Labor Day 2001. Respondent contacted Bob Swanson, who was an investigator, requesting his professional services. Respondent stated he met with Bob Swanson for the first time on September 10, 2001. Respondent met with Bob Swanson on subsequent occasions. Respondent gave him relevant documents. Respondent stated that they discussed travel arrangements and contacting a list people Winniczek had given Respondent. (Tr. 84-88; 516-520).
Respondent stated that Winniczek called Respondent during the last week of September 2001. Respondent stated that Winniczek was very upset and anxious. Respondent stated that Winniczek told him that he didn't think the case was going to work out. Winniczek told Respondent that he saw the arrest of truck drivers who were believed to be engaged in terrorist
activities. Winniczek also told Respondent that his wife had cancer and she was in Poland. Winniczek told Respondent that he wanted to be with his wife and he did not think that Respondent was going to be able to win this case. Respondent stated that this was the first time he learned that Winniczek's wife had cancer. Respondent told Winniczek that because of the September 11, 2001 terrorist attacks, it was not a good time to go to trial. Respondent told Winniczek that he would try to get an extension of trial. Respondent stated that Winniczek could not go to Poland because he surrendered his passport when he was arrested. Winniczek asked Respondent if the prosecutors would be willing to drop the charges in exchange for Winniczek's voluntary departure from the United States. Respondent told Winniczek that he did not advise a voluntary departure but he would talk to the prosecutors. (Tr. 520-522).
On October 5, 2001, subsequent to his conversation with Winniczek, Respondent attempted to secure a plea agreement with federal authorities. Collins advised Respondent that due to Winniczek's decision in July 2000 not to continue his cooperation with the government; Winniczek could no longer be guaranteed a substantial assistance downward departure. (Tr. 95).
On October 6, 2001, Collins wrote to Respondent in follow-up to their conversation regarding resolution of the Winniczek matter. Collins advised Respondent that if Winniczek would give his full cooperation and submit to an extensive debriefing prior to a guilty plea, the AUSAs would again advocate for a substantial assistance departure, although they could not commit to either the amount of the departure or the ability to obtain the agreement of their supervisors to the departure recommendation given the history of the case and his previous decisions to cease cooperation. Respondent stated that there were two proffer sessions related to non-offense conduct which both Respondent and Winniczek attended. (Adm. Ex. 20; Tr. 97-98, 524).
On November 19, 2001, a plea agreement was filed by the parties whereby Winniczek agreed to plead guilty to Count IV of the indictment. Sentencing was scheduled for February 21, 2002. On February 21, 2002, Winniczek appeared before the court and requested that a new attorney be appointed for him for the purpose of sentencing. He requested that Respondent withdraw from his matter. On February 21, 2002, the court entered an order allowing Winniczek's oral motion and withdrew Respondent's appearance. On the same date, John M. Beal ("Beal") filed his appearance as counsel for Winniczek. (Adm. Ex. 27, 28, 33; Tr. 98-101).
On June 3, 2002, Beal filed Defendant's sentencing memorandum, requesting a downward departure of Winniczek's sentence. The motion alleged that the case presented exceptional and disturbing facts relating to Winniczek's legal representation and set forth the history of Winniczek's cooperation while represented by Petro, and basic withdrawal of cooperation pursuant to Respondent's advice. Beal alleged that Respondent's representation qualified as ineffective assistance of counsel and that as a result the Court had a proper basis for a downward departure. The government responded to Beal's motion, agreeing to the facts set forth regarding Respondent's representation of Winniczek. The government further responded that upon Respondent's failure to communicate to the government his position as to continuing cooperation of Winniczek, (or lack thereof), they had turned to the codefendant, Puleo, who had cooperated fully and received a 5K1.1 departure for his cooperation which, in Puleo's case, entitled him to a 1/3 reduction in his terms of imprisonment. (Adm. Ex. 34).
On June 6, 2002, Winniczek was sentenced by Judge Zagel. Judge Zagel indicated he was "leaving aside the question of whether Respondent's representation fell below constitutional minimums" because he felt Winniczek was entitled to a downward departure. Judge Zagel indicated Winniczek could file a 2255 motion if the basis of the motion was ineffectiveness of
counsel. The judge granted Winniczek the same departure that Puleo had received, a 1/3 reduction in the term of imprisonment. Winniczek was sentenced to twenty-two months incarceration followed by three years supervised release with conditions. (Adm. Ex. 35; Tr. 104).
Subsequent to February 21, 2002, Winniczek requested that Respondent refund the unearned portion of the fee and costs paid. On November 16, 2001, Respondent refunded $15,000.00 as the unused portion of the costs advanced by Winniczek. Respondent advised Winniczek that he was entitled to the $150,000 legal fee in full and $5,000 of the costs advanced to him. (Tr. 105).
Mike Petro is an attorney licensed to practice law in the Northern District of Illinois. Petro has been a sole practitioner since 1995. His practice concentrates on criminal defense. Petro has been on the Federal Defender Panel since 1998. In 2000, about forty percent of his practice was federal criminal defense work. On April 12, 2000, Winniczek contracted Petro to represent him regarding his criminal matter in Florida. According to the agreement, Winniczek paid Petro $7,015.36 for his representation. Also, Winniczek agreed to pay $750 per day if there was a jury trial. (Adm. Ex. 56; Tr. 246-251).
On April 12, 2000, Winniczek met Petro at his office. They discussed his case and fees. Winniczek told Petro that he had been arrested, agreed to make phone calls and he had made a statement regarding his involvement. After they met, Petro talked to the Assistant U.S. Attorney in charge of Winniczek's case, Patrick Collins. Collins told Petro that he wanted Winniczek to continue cooperating with the government and he wanted Winniczek to proffer with the U.S. Attorney's office. Petro brought Winniczek in for a proffer. (Adm. Ex. 7, 8; Tr. 251-255).
Petro stated that it was in Winniczek's best interest to make a proffer because Winniczek had already cooperated with the government with respect to telling his version of the events in the case. Winniczek had made a number of phone calls to other potential suspects in the case at the government's request. Petro thought it was best for Winniczek to continue his cooperation. Petro opined that "the U.S. Attorneys had very powerful evidence against Winniczek." (Tr. 255-256).
Winniczek told Petro that his biggest concerns were going to jail and being deported. Petro spoke to Collins regarding the sentencing guidelines and Winniczek's continued cooperation. They also talked about a substantial assistance departure between 20 and 50 percent. Petro stated that Collins prefaced the fact that he could not make any promises. (Tr. 256-258).
After the proffer, Winniczek testified before a grand jury. Petro was present when the Assistant U.S. Attorneys prepared Winniczek for his grand jury testimony. Petro was also present outside the grand jury room during the time of Winniczek's testimony. During the time Petro represented Winniczek, Winniczek told him that he was innocent of the charges against him. Petro stated that Winniczek jumped back and forth between wanting to cooperate and pleading not guilty. (Adm. Ex. 9, 10; Tr. 260-261).
Winniczek told Petro that he was cheating in the CDL written tests and the driving portion of the test. Petro explained to Winniczek the benefits of continued cooperation with the government. Petro never had anything in writing from the U.S. Attorneys though he trusted Collins. (Tr. 261-263).
Petro was discharged by Winniczek in May 2000. Petro gave his files to Respondent. Petro received $4,015 of his fee. Petro did not return any of the fee to Winniczek nor did
Winniczek request a refund. Petro was surprised that he was terminated. Winniczek told him that he thought Petro was inexperienced. (Tr. 263, 270, 273).
John Beal ("Beal") was licensed to practice law in Illinois in 1973. From 1976 through 1984, Beal worked for the U.S. Justice Department. In 1989, Beal started his own practice. Beal litigated almost exclusively in the federal court. The majority of his cases involved criminal defense. Beal is a federal defender and sits on the Federal Defenders Panel. Since 1991, Beal has tried 12-15 federal jury trials. Beal also has experience with federal death penalty cases. (Tr. 275-280).
In the last six years, Beal has handled 200 pleas and about 30 federal criminal appeals. Beal has also completed approximately 12 habeas post conviction proceedings. Beal stated, in his experience, that the most common issue raised in habeas petitions is ineffective assistance of counsel. (Tr. 280-282).
In February 2002, Beal was asked to represent Winniczek in Judge Zagel's court at the sentencing stage of his case. Winniczek had pleaded guilty and was awaiting sentencing. Beal reviewed the plea agreement. The plea agreement provided for a sentence at the low end of the guideline range and Winniczek was not permitted to seek any departures. (Tr. 282-283).
After Beal was appointed, he met with Ted Chung and Patrick Collins to discuss the case. Beal obtained some documents from Winniczek, some from the court file and Respondent's files. Beal reviewed Respondent's files. In the file, there were discovery materials, pleadings, correspondence and case research materials. There were no jury instructions, witness drafts or witness examination drafts. When he got Respondent's files, Respondent told him that the case
had been a triable case until September 11, 2001. Beal also spoke with Mike Petro. (Adm. Ex. 31-33, 37; Tr. 283-286)
In March 2002, Beal met with Collins and Chung to discuss reinstatement of the departure that Winniczek had lost by virtue of stopping his cooperation. Beal's reasons for reinstatement were the possibility of deportation, Winniczek's wife's cancer and the ineffective representation provided by Respondent. The A.U.S.A.s agreed to allow an amendment to the plea agreement that Winniczek would be permitted to request a departure based on the above stated reasons. (Adm. Ex. 34; Tr. 288-292).
Beal filed a sentencing memorandum. The sentencing proceedings were held on June 6, 2002. At the sentencing, Judge Zagel effectuated the amendment to the plea agreement and he granted a one-third reduction based on the combination of circumstances and sentenced Winniczek in accordance with that reduction. (Adm. Ex. 30, 38; Tr. 292, 295).
On the issue of ineffective counsel, Judge Zagel did not render an opinion. Beal opined that Respondent was ineffective because Respondent recommended to Winniczek that his case was triable. Beal did not think Winniczek's case was triable. (Tr. 298).
Theodore Chung was licensed to practice law in Illinois in 1993. In 1998, Chung began working at the U.S. Attorney's Office in Chicago. Chung worked in the criminal division for five and a half years. Chung was one of twenty prosecutors assigned to the Winniczek case. Chung first met Winniczek in April 2000. (Tr. 323-325).
On April 6, 2000, the day Winniczek was arrested, Chung was present during Winniczek's post-arrest interview. The government had detailed information about Winniczek involvement in helping people pass the CDL exams. Chung was present for Winniczek's
interview when he affirmed the government's information. Following Winniczek's arrest, both Chung and Collins had discussions with Petro. They discussed subsequent cooperation resulting in a plea agreement. Shortly thereafter, Respondent filed his substitution motion. Chung recalls discussing with Respondent Winniczek's continued cooperation. Later, when it became clear the Winniczek was not going to continue to cooperate, Chung and Respondent discussed the case. Chung stated that his contact with Respondent diminished over time. (Tr. 326-333).
In fall 2001, Respondent notified Chung that he would like to reopen plea discussions. At that time, the government was no longer offering a downward departure. There was a plea agreement negotiated in fall 2001. Chung was present in court in February 2002 when Winniczek requested a federal defender. John Beal was appointed. Beal filed an amendment to the plea agreement. Following discussions with Beal, the U.S. Attorney's Office permitted the defendant to move for a downward departure. Winniczek was sentenced to 22 months in prison instead of the 33 months negotiated by Respondent. (Tr. 333-337).
Patrick Collins became a member of the Illinois Bar in 1991. Collins became an Assistant United States Attorney in 1995. Currently, Collins is the Deputy Chief of the Public Corruption Section. Collins was involved in the Winniczek case. In April 2000, Collins went to Florida to arrest Winniczek for his involvement in the CDL investigation. (Evidence Dep. 5-6, 8-10).
Collins stated that the day Winniczek was arrested, Winniczek agreed to cooperate. Winniczek acknowledged his involvement in the scheme to obtain CDLs for Illinois residents and provided information regarding Tony Puleo. Winniczek recorded a telephone conversation
with Puleo and had a meeting with him where the A.U.S.A.s obtained enough evidence to indict Puleo. (Evidence Dep. 10-12).
The fact that Winniczek brought the information about Puleo to the A.U.S.A.s that resulted in the indictment of a co-defendant, had an impact on Winniczek's sentencing. Based on his cooperation, Winniczek could have been entitled to as much as 50 percent off of his sentence. (Evidence Dep. 12-13).
From April 2000 to May 2000, Collins was in contact with Winniczek's attorney, Mike Petro. During that time, Winniczek also appeared before the grand jury. On April 13, 2000, Collins sent a proffer letter to Petro. Collins recalled conversations with Petro regarding Winniczek's cooperation and testifying before the grand jury, with the "ultimate aim that there would be a plea resolution." Collins also recalled Petro raising a concern about Winniczek's immigration status. Collin's told Petro that there was a mechanism for the AUSA's to petition INS on behalf of a cooperative defendant for at least a temporary stay in the US while they were cooperating. Collins told Petro that they could not make a promise about immigration because it was the decision of the INS. (Adm. Ex. 8, 10; Evidence Dep. 14, 15, 19-21).
Collins stated that Winniczek earned a sentencing departure premised on his continued cooperation. Collins stated that they used the 5(k)(1.1) guideline to determine an appropriate sentence recommendation. Respondent filed his appearance on May 26, 2000. On June 27, 2000, Collins sent a letter to Respondent. Respondent did not respond. Collins stated that he sent a letter to Respondent because he feared that there was a potential for Winniczek to cease his cooperation. Collins wrote another letter to Respondent on July 14, 2000 similar to the June letter. Between July 14, 2000 and October 6, 2001, Respondent did not respond to any of Collins's letters regarding cooperation. Collins stated that during that time, he had little
communication with Respondent. During that time, Collins filed a series of motions. Collins did not have any discussions with Respondent regarding these motions. The only conversations Collins had with Respondent involved time extensions. (Adm. Ex. 12, 16, 37, 40; Evidence Dep. 24, 28-33).
Later, John Beal substituted in for Respondent and the U.S. Attorney's Office agreed to give Beal the right to ask for a downward departure. Collins never asked INS for a temporary stay of deportation for Winniczek. Collins recalled a conversation with Respondent regarding the effect of the September 11, 2001 attacks on the trial. (Evidence Dep. 37, 40-42).
Paul O'Malley ("O'Malley") was licensed to practice law in Illinois in 1973. O'Malley has been self-employed for 27 years. About 80 percent of his practice is professional negligence. Winniczek contacted O'Malley in December of 2001 regarding Respondent's representation of Winniczek. After the sentencing in June 2002, O'Malley agreed to represent Winniczek. (Tr. 363-366).
Winniczek retained O'Malley to investigate the potential of bringing a claim against Respondent to recover fees unjustly charged by Respondent for representation in the criminal matter. O'Malley interviewed Winniczek, his wife and John Beal. O'Malley also reviewed Respondent's file that he had given to John Beal. After O'Malley completed his investigation, he sent a letter to Respondent demanding the return of a substantial portion of the money he charged the Winniczeks. Respondent did not respond to the letter. O'Malley sent another letter and did not receive a response. (Adm. Ex. 12-16, 20; Tr. 367-375).
O'Malley did learn that Respondent filed for bankruptcy. O'Malley filed an adversary complaint in bankruptcy against Respondent. The adversary complaint is still pending. In
October 2003, O'Malley filed a civil action on behalf of Winniczek. The civil case was resolved and a settlement agreement was entered. Winniczek received $23,000. O'Malley recovered $4,500 from Robert Swanson, an investigator hired by Respondent. O'Malley also recovered $8,334 from Leo Spivak for the referral fee he received from Respondent. O'Malley stated that he does not have an agreement with Winniczek to receive funds recovered from the ARDC proceedings. (Adm. Ex. 57; Tr. 374-378, 381- 385, 387).
Mark Kadish ("Kadish") was licensed in Illinois in 1970. From 1979 until 1999, Kadish was a law professor at Kent Law School. In 1999, Kadish joined the law firm of Mayer, Brown, Rowe and Maw. While in private practice, Kadish's primary area of law was criminal defense. Currently, Kadish is the Director of Pro Bono Activities and Litigation Training for the law firm worldwide. Kadish handles cases but does not charge for his services. Between 1970 and 1999, in his criminal defense practice, Kadish obtained experience in both charging and receiving fees from his clients. Kadish has tried 10-20 jury trials in federal court. Kadish is also a member of the Federal Defender Panel. (Adm. Ex. 39; Tr. 189-199).
The Administrator sent Kadish information regarding the complaint against Respondent. Kadish reviewed the information. Kadish also spoke to other lawyers with respect to the issue of fees to get an idea of how criminal defense attorneys view the question of fees. Based on the above information, Kadish opined that the fee Respondent charged Mr. Winniczek ($150,000 plus $20,000 for expenses) was unreasonable. (Adm. Ex. 50; Tr. 200-203).
Kadish stated that the posture of the Winniczek case at the time Respondent was retained also affected his opinion. Kadish opined that a reasonable fee for this case would be $25,000 to $50,000. Kadish reviewed the work that Respondent performed on the case as well as the
information Respondent gave in his depositions regarding his services. Based on Respondent's work, Kadish did not think that Respondent justified the fee he charged Mr. Winniczek. (Adm. Ex. 46; Tr. 203-204, 212-222).
Evidence Offered in Mitigation and Aggravation
Patricia Brown Holmes
Patricia Brown Holmes is a practicing attorney at the law firm of Schiff Hardin. Ms. Holmes was an associate judge in the Circuit Court of Cook County in the juvenile court division for eight years. Ms. Holmes was also an assistant U.S. Attorney for five years. Ms. Holmes knows Respondent. As a judge and as a prosecutor, Ms. Holmes has had the occasion to know Respondent's reputation for honesty and integrity. Ms. Holmes stated that "Respondent has an excellent reputation for being honest and forthright. Respondent had a reputation for being someone who you could trust." Ms. Holmes is aware of the allegations against Respondent. The allegations do not change her opinion of Respondent's reputation. (Tr. 458-463).
Daniel Locallo has been a circuit court judge in Cook County for twenty years. Respondent has appeared in Judge Locallo's courtroom. Judge Locallo has known Respondent for twenty-seven years. Judge Locallo stated he has talked to people about Respondent and they have a very high opinion regarding Respondent's integrity and his ability to represent clients. (Tr. 472-475).
Martin Agran is a judge in the Circuit Court of Cook County, Chancery division. Judge Agran has been a judge for twelve years. Judge Agran stated that Respondent's reputation for
honesty, integrity, truth and veracity in the community is excellent. Judge Agran reviewed the complaint against Respondent and the complaint did not change his opinion of Respondent. (Tr. 477-480).
Steven Shobat is a member of the Illinois bar since 1985. Mr. Shobat's practice concentrates in criminal defense. Mr. Shobat also teaches at the John Marshall Law School. Mr. Shobat met Respondent in the early 1990s. Regarding Respondent's reputation, Mr. Shobat stated that "Respondent is completely honest, and candid and forthright in his dealings with both the court and with his clients." Mr. Shobat has reviewed the complaint and his opinion has not changed. (Tr. 483-486).
Respondent stated that he has practiced law in Illinois since 1975. Respondent performs pro bono services for combat veterans. Respondent has also worked at the Uptown Peoples Law Center. Respondent's practice concentrates in criminal law, juvenile law and special education. (Tr. 430-437).
Respondent admitted that he did not earn $150,000 for the legal services he performed on Winniczek's behalf. Respondent estimated that he owes Winniczek about $42,000. Respondent also admitted that he did not advise Winniczek that he was giving Spivak a referral fee. Respondent has not been previously disciplined. (Tr. 539-542, 550-551).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In attorney disciplinary proceedings, the Administrator must prove the alleged misconduct by clear and convincing evidence. Supreme Court Rule 753(c)(6); In re Ingersoll, 186 Ill. 2d 163, 168, 710 N.E.2d 390 (1999). It is the responsibility of the Hearing Panel to
determine the credibility and believability of the witnesses, weigh conflicting testimony, draw reasonable inferences, and make factual findings based upon all the evidence. In re Timpone, 157 Ill. 2d 178, 196, 623 N.E.2d 300, 308 (1993). With the above principles in mind and after careful consideration of the testimony and exhibits, we make the following findings:
In the Complaint, Respondent is charged with:
Failing to provide competent representation, in violation of Rule 1.1(a) of the Illinois Rules of Professional Conduct;
Charging an unreasonable fee in violation of Rule 1.5 of the Illinois Rules of Professional Conduct;
Dividing a legal fee with another lawyer who is not in the same firm without the client's consent in writing in violation of Rule 1.5(f) of the Illinois Rules of Professional Conduct;
Engaging in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct; and
Engaging in conduct which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute in violation of Supreme Court Rule 770.
We find that the Administrator did not meet her burden of proof by clear and convincing evidence regarding the issue of incompetent representation. Based on the evidence, we find that Respondent is an experienced and capable attorney. We note that litigation requires strategic planning and the failure of that plan does not necessarily amount to incompetent representation. Respondent testified that he worked diligently on three, unique and complicated, motions on Winniczek's behalf. Respondent testified that he explained, to Winniczek, the consequences of ceasing cooperation with the government. Respondent also explained that he believed Winniczek's innocence which attributed to his initial decision to go to trial instead of agreeing to a plea settlement. Respondent testified that he explained his strategies and decision making process with Winniczek, earning Winniczek's approval.
In hindsight, the evidence shows, Respondent made several questionable decisions regarding his representation of Mr. Winniczek. Particularly, the decision to cease cooperation and proceed to trial is at issue. However, the testimony of Winniczek, Michael Petro and Respondent all show that Winniczek's greatest concern during Respondent's representation, was whether Winniczek was going to be deported. The evidence shows that even if Winniczek continued his cooperation and received a significant downward departure in his sentencing, the possibility of being deported still existed. Respondent reasoned that going to trial and being found not guilty was the only way to guarantee Winneczek would not be deported from the United States. Throughout Respondent's representation, Winniczek proclaimed his innocence. Respondent made legal decisions based on his legal experience and his client's expressed wished. Therefore, based on the foregoing, we find that the Administrator failed to meet her burden of proof by clear and convincing evidence that Respondent failed to provide competent representation. Therefore, we recommend that Rule 1.1(a) allegation of the Complaint be dismissed.
We find that the Administrator proved by clear and convincing evidence that Respondent charged Mr. Winniczek an unreasonable fee. Respondent admitted that the fee was excessive. Mr. Kadish, the Administrator's expert, opined that $150,000 plus $20,000 for expenses was an unreasonable fee for a criminal defense attorney to charge a client charged with extortion and fraud. Respondent accepted the fee believing the case would go to trial. Mr. Winniczek's case did not go to trial; he accepted a plea bargain based on Respondent's recommendation. However, Respondent returned only $15,000 of the unused portion of the costs. Respondent kept the $150,000 legal fee and $5,000 of the advanced cost fees. Therefore, we find that Respondent violated Rule 1.5 of the Illinois Rules of Professional Conduct.
We find that the Administrator proved by clear and convincing evidence that Respondent divided a legal fee with another lawyer who is not in the same firm without the client's consent in writing. Respondent admitted that he gave his brother-in-law, Leo Spivak, one-third of the $25,000 retainer fee. Respondent also admitted that he did not reduce a referral fee agreement to writing nor did he inform Mr. Winniczek that Spivak was receiving a referral fee. Mr. Winniczek testified that he did not know that Respondent was paying Spivak a referral fee. Respondent did not tell him that Spivak was receiving a referral fee and Mr. Winniczek did not sign a referral fee agreement. Therefore, based on the evidence, we find that Respondent violated Rule 1.5(f) of the Illinois Rules of Professional Conduct.
By charging an unreasonable fee and failing to obtain client consent for distributing a referral fee, Respondent's actions defeats the administration of justice and brings the legal profession into disrepute. Therefore, we find that Respondent violated Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct and Supreme Court Rule 770.
The purpose of the disciplinary system is to protect the public, maintain the integrity of the legal system and safeguard the administration of justice. In re Howard, 188 Ill. 2d 423, 434, 721 N.E.2d 1126 (1999). We should not recommend a sanction which will benefit neither the public nor the legal profession. In re Leonard, 64 Ill. 2d 398, 406, 356 N.E.2d 62 (1976). In determining the proper sanction, we consider the proven misconduct along with any aggravating and mitigating factors. In re Witt, 145 Ill. 2d 380, 298, 583 N.E.2d 526 (1991).
The Administrator recommends Respondent be suspended for one year and until restitution is made in the amount of $75,000. In support of her recommendation, the Administrator offered the following cases: In re Gerard, In re Wheaton, In re Lawrijan and In re
Toughy. Respondent recommends censure and time to repay an amount up to $42,000. In re Kutner, 78 Ill. 2d 157, 399 N.E.2d 963 (1979) indicates that charging an excessive fee without additional misconduct warrants censure. However, we conclude that because of the additional misconduct in this case, censure is not appropriate. While every case is unique, we find the following case instructive in determining the proper recommendation for a sanction:
The respondent in, In re Miglore, 01 CH 68. M.R. 20107 (May 20, 2005) was found guilty of overreaching, breach of fiduciary duty and charging an excessive fee. The respondent's misconduct occurred during his involvement in the probate of an estate. The Hearing Board found that the respondent took fees in excess of $38,000 over the reasonable amount earned. The respondent offered significant mitigating evidence. The Supreme Court ordered the respondent suspended from the practice of law for six months, with all but the first two months stayed. The respondent was also ordered to pay restitution.
Along with the above stated case law, we also consider factors of mitigation and aggravation. In this case, there is significant mitigation. Respondent has practiced law for almost 32 years with no prior discipline. A long record of untainted practice is a well recognized mitigating factor. In re Stone, 109 Ill. 2d 253, 486 N.E.2d 915 (1985). Four witnesses testified to Respondent's reputation for honesty. Respondent has provided pro bono representation and has donated time to community organizations. Respondent has been cooperative in these proceedings and has admitted wrongdoing concerning his representation of Mr. Winniczek. In aggravation, we consider Respondent's failure to acknowledge that his fee was excessive until the hearing was an aggravating factor.
Based on the foregoing, we recommend that Respondent be suspended from the practice of law for six months, stayed in its entirety, and Respondent placed on probation for two years, pursuant to Supreme Court Rule 772, with probation to terminate without further order of the Court provided Respondent complies with the following conditions:
At least thirty (30) days prior to the termination of the period of probation, Respondent shall submit proof to the Administrator that he has made full and complete restitution to Marek Winniczek in the amount of $50,000;
Respondent shall notify the Administrator within fourteen (14) days of any change of address;
Respondent shall comply with the Illinois Rules of Professional Conduct and shall timely cooperate with the Administrator in providing information regarding any investigations relating to his conduct;
Respondent shall reimburse the Commission for the costs of this proceeding, as defined in Supreme Court Rule 773, and shall reimburse the Commission for any further costs incurred during the period of probation; and
At least thirty (30) days prior to the termination of the period of probation, Respondent shall reimburse the Disciplinary Fund for any client protection payments arising from his conduct.
Probation shall be revoked if Respondent is found to have violated any of its terms. The six month period of suspension shall commence from the date of the determination that any term of probation has been violated.
Date Entered: August 15, 2007
|John Steed III, Chair, with Leonard J. Schrager and Frederich J. Bingham.|