Filed July 8, 2008
In re Joseph Shun Mendoza Ravago
Commission No. 06 CH 71
Synopsis of Hearing Board Report and Recommendation
NATURE OF THE CASE: a) committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; b) assisting a client in conduct the lawyer knows to be fraudulent; c) engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; d) engaging in conduct that is prejudicial to the administration of justice; e) engaging in conduct that tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.
RULES DISCUSSED: 1.2(d), 8.4(a)(3), 8.4(a)(4), 8.4(a)(5) and Supreme Court Rule 770.
RECOMMENDATION: One-year suspension and until Respondent completes the Illinois Professional Responsibility Institute course.
DATE OF OPINION: July 8, 2008.
HEARING PANEL: Lawrence S. Beaumont, Chair, Modupe A. Sobo, and Harry M. Hardwick.
RESPONDENT'S COUNSEL: Robert A. Merrick, Jr.
ADMINISTRATOR'S COUNSEL: Meriel R. Coleman.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
JOSEPH SHUN MENDOZA RAVAGO,
Commission No. 06 CH 71
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing in this matter was held on July 27, 2007, at the Chicago offices of the Attorney Registration and Disciplinary Commission before a panel of the Hearing Board consisting of Lawrence S. Beaumont, Chair, Modupe A. Sobo, and Harry M. Hardwick. Meriel R. Coleman appeared on behalf of the Administrator. The Respondent, Joseph Shun Mendoza Ravago, appeared and was represented by Robert A. Merrick, Jr.
The Administrator's one-count Complaint filed September 28, 2006, alleges Respondent assisted Hamed Seleman in engaging in fraudulent conduct. Specifically, during his marital dissolution proceedings, Mr. Seleman was ordered by the court to sell a piece of property from the marital estate. Respondent agreed to execute a lien form that reflected Respondent was owed money for services he provided relating to the property when in fact no such services were rendered. Respondent ultimately received $50,000 from the sale of the property and subsequently tendered $45,000 back to Mr. Seleman.
In addition, the Administrator alleges Respondent committed a criminal act by notarizing the signatures of three additional purported lien holders without witnessing the signatures or attempting to verify the signatures in violation of the Illinois Notary Act.
On December 28, 2006, Respondent filed his Answer, in which he admitted some factual allegations, denied others, and denied all allegations of misconduct.
The Administrator called Respondent as an adverse witness and presented the testimony of Denise Sobilo, f/k/a Iman Seleman. Administrator's Exhibits 1-12 were admitted by stipulation of the parties. (Tr. 9). The Respondent testified on his own behalf and presented the testimony of Fr. Miguel Martinez, Aurora Abella-Austriaco, the Honorable Thomas M. Donnelly, and Lawrence P. Maya. Respondent's Exhibits 1 and 2 were admitted by stipulation of the parties. (Tr. 115). The parties also filed a Joint Stipulation.
Between June 2002 and June 2004, Respondent agreed to provide a variety of services to Hamed Seleman including preparing Mr. Seleman's personal tax returns and incorporating various business ventures. According to Respondent, Mr. Seleman was a contractor who often purchased rental properties, made improvements to the properties, and resold them. He also had an entertainment business and a restaurant. (Tr. 117). While Mr. Seleman was an individual outside Respondent's normal clientele, Respondent hoped to receive work from him in the future. (Tr. 31-32).
On September 23, 2003, Iman Seleman filed a petition seeking dissolution of her marriage to Mr. Seleman, In re Marriage of Iman Seleman and Hamed Seleman, 03 D 1949 ("Seleman dissolution matter"). On May 5, 2004, the court entered an order in the Seleman
dissolution matter directing the parties to sell a piece of property from the marital estate located at 5140 S. King Drive, Chicago ("King Drive property"). (Respondent's Answer).
Respondent introduced Mr. Seleman to an individual who ultimately agreed to purchase the King Drive property. (Respondent's Answer). Respondent did not participate in any negotiations regarding the sale and had no involvement in the transaction. (Tr. 28). In March 2004, after the individual agreed to purchase the King Drive property, Mr. Seleman told Respondent he wanted to thank him by giving him a finder's fee or gift of $50,000. (Tr. 28; 119-20). Respondent did not want to accept the gift and suggested they make the $50,000 a referral fee. (Tr. 120). An Agreement for Referral Fee dated March 15, 2004, was then signed by Mr. Seleman. (Resp. Ex. 1). Respondent testified he did not recall who drafted this document. (Tr. 121).
Respondent initially testified he could not recall if, at that time Mr. Seleman executed the Agreement for Referral Fee, he was aware of the Seleman dissolution matter, but later acknowledged he was hesitant about accepting the gift while the Seleman dissolution matter was pending. (Tr. 28-29; 137). Respondent also testified that between March 2004 and June 2004 he was not aware of any orders entered in the Seleman dissolution matter relating to the King Drive property. (Tr. 122).
In January 2004, Respondent received a letter from Ms. Seleman's attorney in the Seleman dissolution matter requesting certain tax returns prepared by Respondent. The letter stated that Ms. Seleman had previously requested the returns, but Respondent refused to provide them. (Adm. Ex. 12). Respondent did not recall receiving the letter, but did not dispute it was received. (Tr. 26-27).
In June 2004, Mr. Seleman presented Respondent with certain forms entitled "Waiver of Lien---Final Materials or Labor (Illinois)" and "Contractor's Affidavit."("lien forms") (Tr. 29-30; Adm. Ex. 1). A contractor's affidavit is usually furnished by a contractor directly to a homeowner to disclose the amount of the contracts and all of the subcontractors that the contractor will be using for a project. (Tr. 77-78). The waiver of lien form is furnished by the contractor to the homeowner when payment is made and the work is being done. (Tr. 78). If the property is being sold, the funds are deposited in an escrow account with a title company and the contractors are then paid out of the proceeds of the sale. (Tr. 82-83). In order to make such payment, the title company would require copies of the forms. (Tr. 78). If an attorney signs such forms it is typically on behalf of the contractor who performed the work. (Tr. 83-84).
According to Respondent, at the time Mr. Seleman presented the lien forms, they were blank. (Tr. 30). Although Respondent initially had reservations about signing the lien forms, he did so because Mr. Seleman stated his real estate attorney needed them. In addition, although he was not suspicious at the time because he trusted Mr. Seleman and believed him to be an honest individual, he signed them because he was intimidated by Mr. Seleman. (Tr. 31, 33, 117, 154). Respondent admitted that at the time he signed the blank lien forms, he knew what the purpose of the forms was and knew that he had not provided any services to qualify for such a lien. (Tr. 34). Had he been presented with completed lien forms, he would not have signed them. (Tr. 124). Respondent ultimately testified he could not remember why he signed the lien forms except to say he did not think about it. (Tr. 34-35, 123-24).
Respondent testified he believed he would receive his $50,000 referral fee after the closing on the sale of the King Drive property, but denied knowing the signed blank lien forms would be used during the closing on the sale of the King Drive property. (Tr. 34, 167-68).
Respondent stated that Mr. Seleman did not discuss his marital dissolution proceeding and he did not consider the proceeding when he signed the lien forms. (Tr. 125).
On June 25, 2004, at the request of Mr. Seleman, Respondent notarized the following signatures on similar lien forms as those signed by Respondent: Carmelo Roman individually and on behalf of Roman Electric for a $51,000 purported lien; Mohammed Mahmutovic individually and on behalf of Illinois Heating and Cooling for a $159,800 purported lien; and Kamal Ibrahim individually and on behalf of Final Touch Remodeling Services Inc for a $91,000 purported lien. (Adm. Exs. 4, 7, 8; Joint Stipulation). Unlike the blank lien forms signed by Respondent, these forms were completed and identified the King Drive property as the property where the work was performed. (Tr. 46-47; Adm. Exs. 4, 7, 8).
According to Respondent, on the date he notarized the forms Mr. Seleman arrived in his office unannounced with several individuals. Respondent acted quickly because he was annoyed by the interruption and wanted the individuals to leave his office. (Tr. 37-39). Respondent testified that Mr. Seleman indicated who the individuals were and Respondent had no reason to doubt the truthfulness of what he was saying. (Tr. 126-27). Respondent previously testified at his deposition that he did not verify any signatures at the time he notarized them, but testified at the hearing that he was not sure if the lien forms were signed in front of him on that day. (Tr. 37-38). Respondent later testified that some of the lien forms he notarized were signed in his office. (Tr. 126). Respondent did not inquire as to whether the individuals actually performed the services reflected in the documents and has no knowledge as to whether the services were actually performed. (Tr. 127).
On August 13, 2004, the closing occurred on the sale of the King Drive property at Mercury Title. The King Drive property was sold for $2,500,000. (Adm. Ex 11). Shortly
thereafter, Respondent received a check from Mercury Title dated August 16, 2004, in the amount of $50,000 payable to "Josah Shon Rouge." (Tr. 40; Adm. Exs. 2, 11). The address "5140-50 S. Martin Luther King Drive Chicago, IL 60615" is printed in the memo portion of the check. (Adm. Ex. 2). The check was deposited in Respondent's IOLTA account on August 19, 2004. (Adm. Ex. 2).
Respondent explained he had the check deposited in his IOLTA account because he did not recognize the payee's name. If the check were made out to him, he would have deposited it into his operating fund. (Tr. 129). ). Respondent did not recall if he had done work for Mercury Title prior to receiving the check and did not call Mercury to inquire as he had no time to investigate the issue. (Tr. 149-50, 152).
At the hearing, Respondent stated that at the time he received the check he did not realize the funds came from the sale of the King Drive property and it did not occur to him that the funds were a result of the blank lien forms he signed for Mr. Seleman. (Tr. 41-42; 147). At a prior sworn statement, however, Respondent stated when he first saw the check and saw that it came from Mercury Title "it kind of freaked [him] out." (Tr. 41-42). Respondent later testified at the hearing that at the time he received the check he had no knowledge that Mrs. Seleman might be entitled to any portion of the funds. (Tr. 129).
Each of the lien forms notarized by Respondent at Mr. Seleman's request on June 25, 2004, was submitted to Mercury Title in connection with the August 13, 2004 closing on the King Drive property. On August 16, 2004, Mercury Title issued and delivered the following checks from the sale proceeds of the King Drive property as payment for the purported liens: $159,800 to Illinois Heating and Cooling, $91,000 to Final Touch and $51,000 to Roman
Electric. (Adm. Exs. 5, 6, 9-11; Joint Stipulation). Respondent had no knowledge of these disbursements until this disciplinary proceeding was commenced. (Tr. 127-28).
Shortly after receiving the Mercury Title checks, representatives from Final Touch Remodeling and Roman Electric endorsed their checks over to Mr. Seleman. Mr. Seleman then endorsed the checks and deposited them into his bank account. (Adm. Exs. 6, 10; Joint Stipulation). On August 23, 2004, the Mercury Title check issued to Illinois Heating and Cooling check was deposited into Mohammed Mahmutovic and Illinois Heating and Cooling's account number 1011055. On August 24, 2004, $84,800 was transferred from account number 1011055 into bank account number 1022078. Bank account number 1011055 belonged to King Soliman Entertainment, which was a company owned by Hamed Seleman. (Joint Stipulation)
According to Respondent, a couple days after receiving the check from Mercury Title, Mr. Seleman came to Respondent's office asking for a loan in the amount of $45,000. (Tr. 43-44, 129-31). Respondent stated that it was not until this time that Respondent realized the Mercury Title check was related to Mr. Seleman. (Tr. 156). However, Respondent does not recall discussing the Mercury Title check with Mr. Seleman at that time. (Tr. 157). Respondent explained that Mr. Seleman caught him off guard when he asked for the loan. (Tr. 43-44). On August 19, 2004, Respondent tendered a check in the amount of $45,000 to Mr. Seleman from his IOLTA account. (Adm. Ex. 3; Tr. 170).
On August 15, 2004, Mr. Seleman executed a Promissory Note ("Note") promising to pay Respondent $45,000 within one year. (Resp. Ex. 2). Although Respondent admitted he wanted the Note to protect himself, Respondent did not recall if he asked for the Note and did not recall who drafted the Note. Respondent also did not recall if he advised Mr. Seleman to consult with an attorney about this transaction and did not recall if Mr. Seleman executed the
Note in Respondent's presence. (Tr. 44, 132, 158, 162-64). Respondent did not consider himself to be Mr. Seleman's attorney during these transactions. (Tr. 132).
Mr. Seleman did not repay Respondent any portion of the $45,000 loan. Respondent declared the $50,000 as income and paid approximately $5,000 to $8,000 in taxes on the amount. (Tr. 134).
Evidence Offered in Mitigation
Fr. Miguel Martinez, a Roman Catholic priest for the Archdiocese of Chicago, has known Respondent for approximately eleven years. Fr. Martinez met Respondent during liturgical celebrations and other religious gatherings and described him as a person of faith and responsibility. According to Fr. Martinez, Respondent is in charge of a weekly novena and is always willing to help others. Fr. Martinez testified that Respondent is known as a person of integrity and honesty in his community. (Tr. 61-66).
Aurora Abella-Austriaco has been a practicing attorney for sixteen years and has known Respondent for approximately ten years. Ms. Abella-Austriaco and Respondent formed the Filipino-American Bar Association to address the needs of Filipino immigrants who cannot afford an attorney. According to Ms. Abella-Austriaco, Respondent was also the first president of the Filipino-American Bar Association. Ms. Abella-Austriaco testified that Respondent's reputation for honesty is beyond reproach. (Tr. 69-76).
The Honorable Thomas M. Donnelly has known Respondent for approximately twenty years. Currently both are members of the same Knights of Columbus post and share an avid interest in the Catholic faith. According to Judge Donnelly, Respondent has an extremely high reputation for honesty, integrity, generosity and kindness. (Tr. 85-89).
Lawrence P. Maya is currently an attorney and has known Respondent since high school. According to Mr. Maya, Respondent has an outstanding reputation for honesty and integrity. (Tr. 92-95).
Respondent started his own firm in January 2000. (Tr. 99). Since 2001, he has been handling a probate case pro bono devoting approximately sixty hours per year to the matter. (Tr. 99-100). Since 1994, Respondent has prepared 20 to 30 tax returns per year free of charge for low income or elderly individuals. (Tr. 100). In addition, Respondent represents five or six clients per year pro bono on child support matters. (Tr. 101). The Philippine Consulate refers Respondent several matters per year that he handles pro bono. (Tr. 101-02). Respondent estimates he does more pro bono legal work than paid legal work. (Tr. 103).
In addition to founding the Filipino-American Bar Association, Respondent is also active in the Catholic Lawyers Guild. (Tr. 103-06). He is an active member of his parish and the Knights of Columbus. (Tr. 106-11). He estimates he donates $1,000 to $5,000 per year to charitable causes. (Tr. 112).
Respondent stated he was sorry for his actions and the anguish and embarrassment they caused. (Tr. 135-36).
Evidence Offered in Aggravation
Denise Sobilo was previously known as Iman Seleman during her marriage to Mr. Seleman from November 1984 until December 2005. (Tr. 51). Ms. Sobilo had four children during her marriage to Mr. Seleman and relied on him as her sole financial support. (Tr. 52). Ms. Sobilo initially received $5,000 from the sale of the King Drive Property and an additional $2,000 from the proceeds some time later. (Tr. 53). Until February 2005, Ms. Sobilo did not
receive child support because Mr. Seleman claimed he was out of work and had no income. (Tr. 53). After February 2005, support in the amount of $4,000 per month was ordered. (Tr. 53). The amount was temporarily reduced to $700 per month at which time Mr. Seleman paid that amount for three months. When the amount was reinstated at $4,000, Mr. Seleman ceased paying. (Tr. 54). During this time, Ms. Sobilo also had access to $350,000 in funds from a joint account with Mr. Seleman. (Tr. 56).
Ms. Sobilo was living in the marital residence, but was forced to move after Mr. Seleman stopped making the mortgage payments, despite being ordered to do so, and the residence was subject to foreclosure proceedings. (Tr. 54). Ms. Sobilo then worked as a cashier at a BP Amoco. She was evicted for nonpayment of rent from several residences and ultimately moved in with her mother. (Tr. 54-55). According to Ms. Sobilo, Mr. Seleman fled the country in August 2005 after a warrant was issued for his arrest for failure to pay child support. She believes he is currently living in Cairo, Egypt. (Tr. 55, 58).
Ms. Sobilo is suing Respondent and various other defendants in Federal District Court for an amount in excess of $400,000. (Tr. 58, 174).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In attorney disciplinary proceedings, the Administrator must establish charges of lawyer misconduct by clear and convincing evidence. 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 the 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.
Respondent is charged with:
committing a criminal act that reflects adversely on the lawyer's fitness as a lawyer, to wit, notarizing signatures of four lien waiver forms without witnessing the signature or verifying the validity of the signature, in violation of 5 ILCS 312/6-102 and 5 ILCS 312/7-105 in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional Conduct ("Rules");
assisting a client in conduct that the lawyer knows to be fraudulent, in violation of Rule 1.2(d) of the Rules;
engaging in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4) of the Rules;
engaging in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Rules; and
engaging in conduct that tends to bring the courts or the legal profession into disrepute in violation of Supreme Court Rule 770.
Under the provisions of the Illinois Notary Public Act ("Notary Act"), when "witnessing or attesting a signature, the notary must determine, either from personal knowledge or from satisfactory evidence, that the signature is that of the person appearing before the notary and named therein." 5 ILCS 312/6-102(c). The Notary Act continues by stating:
(d) A notary public has satisfactory evidence that a person is the person whose true signature is on a document if that person:
(1) is personally known to the notary
(2) is identified upon the oath or affirmation of a credible witness personally known to the notary; or
(3) is identified on the basis of identification documents.
5 ILCS 312/6-102(d).
It is undisputed that Respondent notarized the signatures of Carmelo Roman, Mohammed Mahmutovic, and Kamal Ibrahim on three separate lien forms. In order to comply with the provisions of the Notary Act, Respondent was required to determine whether the signatures on
the forms where the signatures of Mr. Roman, Mr. Mohammed and Mr. Ibrahim. At his deposition, Respondent stated that he did not verify any signatures or request identification such as a driver's license from any of the individuals. Respondent initially testified during this hearing that he was not sure if the lien forms were signed in front of him. He later testified that some of the lien forms were signed in his office. Respondent also testified that Mr. Seleman indicated who the individuals were. Notwithstanding Respondent's contradictory testimony, it is clear that Respondent did not personally know these individuals and did not request identification from any individual. Moreover, even if we accept, which we do not, Respondent's testimony that Mr. Seleman indicated who the individuals were, there was no evidence that Mr. Seleman did so "upon oath or affirmation." Accordingly, we find Respondent did not comply with the Notary Act when he notarized the signatures of Mr. Roman, Mr. Mohammed and Mr. Ibrahim.
The Notary Act defines official misconduct as the "wrongful exercise of a power or the wrongful performance of a duty." Wrongful is defined as "unauthorized, unlawful, abusive, negligent, reckless, or injurious." 5 ILCS 312/7-104. "A notary public who knowingly and willfully commits any official misconduct is guilty of a Class A misdemeanor…A notary public who recklessly or negligently commits any official misconduct is guilty of a Class B misdemeanor." 5 ILCS 312/7-105.
Given the analysis above, we also find Respondent engaged in official misconduct when he wrongfully performed his duty of notarizing the signatures of Mr. Roman, Mr. Mohammed and Mr. Ibrahim. For purposes of this discussion, we need not determine if Respondent acted knowingly or willfully and is therefore guilty of a Class A misdemeanor or whether Respondent acted recklessly or negligently and is therefore guilty of a Class B misdemeanor. We simply find
the Administrator presented clear and convincing evidence that Respondent committed a criminal act in violation of Rule 8.4(a)(3) when he wrongfully notarized the signatures of Mr. Roman, Mr. Mohammed and Mr. Ibrahim on the lien forms.
It is necessary, however, to determine whether Respondent acted knowingly when we consider whether Respondent violated Rule 1.2(d). The Administrator alleges Respondent assisted Mr. Seleman in conduct Respondent knew to be fraudulent, i.e., fraudulently receiving funds from the sale of the King Drive property. Respondent claims he was an unwitting dupe in Mr. Seleman's scheme and that his actions were a product of misplaced trust, naiveté, and poor judgment.
The terminology section of the Rules of Professional Conduct states, "Knowingly" "known" or "knows" denotes actual knowledge of the fact in question. A person's knowledge may be inferred from the circumstances." In addition, it is well settled that deliberately avoiding knowledge is the same thing as having actual knowledge. United States v. Carrillo, 435 F.3d 767, 780 (7th Cir. 2006); See, also, Cunningham v. Gibson Electric Co., Inc., 43 F. Supp. 965 (1999) (claiming lack of knowledge when the evidence strongly supports an inference of deliberate ignorance justifies conclusion of knowledge). "Deliberate avoidance is not a standard less than knowledge; it is simply another way that knowledge may be proven." United States v. Carani, 492 F.3d 867, 873 (7th Cir. 2007). Such knowledge may be proven by the defendant's conduct and by all the facts and circumstances surrounding the case. United States v. Leahy, 464 F. 3d 773 (7th Cir. 2006) (explaining the propriety of the deliberate avoidance "ostrich" instruction).
It is clear from the evidence that Respondent knew of the Seleman dissolution matter in January 2004 when he received a letter from Ms. Sobilo's attorney. Although he initially stated
he could not recall if he knew of the proceeding when he executed the Agreement for Referral Fee on March 15, 2004, he later acknowledged that he was hesitant about accepting such a "gift" while the dissolution matter was pending.
Next, in June 2004, Respondent signed the blank lien forms. Although Respondent provided a variety of reasons for signing these forms, none was credible. He admitted he knew the purpose of the lien forms and admitted he performed no services to qualify for such a lien. He also made no effort to contact Mr. Seleman's real estate attorney who allegedly required the forms. A few days later, Respondent notarized similar lien forms at Mr. Seleman's behest. These forms actually identified the King Drive property as the property where the work was performed. We find it implausible that Respondent failed to make any connection between these forms and the forms he signed.
Sometime in August 2004, Respondent received a check dated August 15, 2004, for $50,000 from Mercury Title. Again, Respondent would have us believe that he made no connection between this check and the sale of the King Drive property even though the amount of the check was the exact amount of his "referral fee" and the address of the King Drive property is listed on the check. Further, even though Respondent testified he did not recognize the name on the check and did not recall doing any work with Mercury Title, he did not investigate receipt of a check in the amount of $50,000 because he did not have the time. Our rejection of Respondent's version of events is further bolstered when considering his previous testimony that it "freaked him out" when he saw the $50,000 check was from Mercury Title.
Respondent next asserts that a few days after receiving the $50,000 check from Mercury Title, Mr. Seleman came to his office seeking a $45,000 loan. It was not until then, Respondent claims, that he realized the Mercury Title check was related to Mr. Seleman. Nevertheless he
testified he did not discuss that connection with him and tendered the requested funds from his IOLTA account.
Respondent failed to explain, however, the most critical piece of evidence presented in this matter. On August 15, 2004, one day before the Mercury Title check was dated and several days before Mr. Seleman allegedly asked him for the loan, Mr. Seleman executed a Promissory Note promising to pay Respondent $45,000 within one year. Not surprisingly, the amount referenced is the $50,000 referral fee minus the approximate income tax liability Respondent would owe on the funds. Indeed, Respondent admitted he paid approximately $5,000 to $8,000 in taxes on that fee. Respondent's testimony that he did not recall who drafted the Promissory Note is yet another example of his absurd and unbelievable testimony and further casts doubt on his version of events.
Lastly, it is undisputed that the funds disbursed at the closing of the King Drive property pursuant to the lien forms notarized by Respondent were ultimately paid to Mr. Seleman. Respondent denies having knowledge of the disbursements at the closing and the parties agree there is no direct evidence Respondent knew of the kickbacks to Mr. Seleman. Had this been the only action involving Respondent, we might be inclined to believe he was the unwitting dupe he portrayed himself to be. However, when viewed with the totality of the evidence presented, we cannot accept such a conclusion.
Accordingly, we find the Administrator presented clear and convincing evidence that Respondent assisted Mr. Seleman in conduct Respondent knew was fraudulent in violation of Rule 1.2(d). The evidence presented supports a finding of knowledge under the definition contained in the Rules of Professional Conduct and the "deliberate avoidance standard" discussed above.
In support of his assertions that he did not violate Rule 1.2(d), Respondent relies on In re Levin, 00 CH 72, M.R. 19490 (September 24, 2004), In re Vitell, 00 CH 95, M.R. 19303 (May 17, 2004), and In re Kolschowsky, 03 CH 125 (2006). In Levin, the attorney drafted conveyance documents for several pieces of real property while a citation to discover assets was pending against his client. In determining that the attorney did not violate Rule 1.2(d), both the Hearing and Review Boards noted that the attorney recorded the conveyance documents, made no attempt to hide the conveyances from any judgment creditor, and advised his client that he would have to disclose the conveyances at his citation examination. When the client initially failed to make the disclosure, the attorney rebuked his client, advised the court and opposing counsel of his concerns regarding his client's testimony, and then produced his client for his continued examination at which time his client admitted the transfers.
The attorney in Vitell, was alleged to have received and negotiated disability benefit checks issued to his client after his client had died. In finding no violation of Rule 1.2(d), the Hearing Board concluded that the record contained insufficient facts from which inferences could be drawn to prove the attorney knew his conduct was fraudulent. Specifically, the attorney had agreed to represent his client's wife in a death benefit case against the employer and was given a power of attorney to negotiate the checks. The attorney also stated he had been advised by opposing counsel to continue receiving the checks as they would be a set-off against any recovery from the death benefits case. While the Hearing Board determined no such agreement actually existed, it found that the attorney reasonably believed it did. Finally, although the attorney failed to notify the correct City department, he did notify various City departments of his client's death.
In Kolschowsky, the Administrator alleged the attorney, in his role as an officer of a corporation, participated in his corporation's fictitious sale of property thereby defrauding a bank of its right to collect its full interest on the property. The Hearing Board found that the Administrator failed to establish that the sale was a fraudulent transaction. The Hearing Board went on to state that even if it assumed the transaction was a sham, there was insufficient evidence to find the attorney was a knowing participant.
We find each of the above cases to be factually distinguishable from the present matter. In addition, in each of the cases the Hearing Board either explicitly or implicitly found the attorneys to be credible. That is not the case in this matter. Throughout this hearing, Respondent gave contradictory, vague and evasive testimony. On numerous occasions, Respondent was impeached with testimony from a prior sworn statement. On many occasions he explained the inconsistencies of his testimony with a self-serving claim that he currently could not remember the reasons for his past actions. This lack of credibility coupled with our analysis of the chronology of events discussed above does not alter our conclusion that Respondent violated Rule 1.2(d).
In making our determination that Respondent also engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4) we rely on In re Yamaguchi, 118 Ill. 2d 417, 515 N.E.2d 1235 (1987), and In re Montalvo, 98 SH 11, M.R. 16865 (September 22, 2000). In Yamaguchi, the attorney signed blank real estate valuation complaints and real estate valuation complaints completed by other individuals. Although these forms were ultimately filed before the tax board, the attorney "made no effort to ascertain whether the contents of those complaints were accurate and made no inquiry as to the propriety of the theory of relief." Yamaguchi, 118 Ill. 2d at 425. The Court held, "By signing valuation
complaints without first reviewing them or supervising their completion, respondent deceived both the tribunal and property owners into thinking that the complaints had been evaluated by a licensed attorney. Fraud includes anything calculated to deceive, including the suppression of truth and the suggestion of what is false and respondent's conduct is thus clearly fraudulent." Id at 425-26.
Similarly, the attorney in Montalvo, signed an affidavit prepared by another attorney that contained false statements and filed it with the court. The Hearing Board was unable to find that the Respondent read the affidavit or otherwise knew it contained false information before he signed it. However, the Hearing Board reasoned that by signing the affidavit, the attorney led the court to believe that the facts asserted in the affidavit were true. Further, by choosing not to read the affidavit, the attorney "deliberately, consciously, and recklessly allowed the affidavit containing factual assertions about which he chose to remain ignorant to be filed in federal court with the intent that it be relied upon by the judge…This was an act of deceit perpetrated on the court." Montalvo at 21.
By signing the blank lien forms and notarizing the additional lien forms, Respondent deceived Mercury Title and ultimately the tribunal presiding over the Seleman dissolution matter. Based upon our analysis regarding the violation of 1.2(d), we further find the Administrator presented clear and convincing evidence that Respondent's actions in assisting Mr. Seleman with his fraudulent scheme were intentional, reckless, or taken in an effort to deliberately avoid the truth. Consequently, we find Respondent violated Rule 8.4(a)(4).
The cases relied on by Respondent in support of his argument that he did not violate Rule 8.4(a)(4), In re Barry, 00 CH 54, M.R. 18782 (September 19, 2003), In re Brodsky, 01 CH 42,
M.R. 19007 (January 20, 2004), In re Coladarci, 01 CH 20, M.R. 20228 (September 26, 2005), and In re Brennan, 05 CH 95 (2007), are again distinguishable and unpersuasive.
In Barry, contrary to the evidence presented in this matter, there was insufficient evidence that the attorney's actions were intentionally deceitful. Specifically, false statements in affidavits filed with the court were the result of a good faith oversight and were not made for the purpose of deceiving the court. Similarly, in Brodsky, the Hearing Board found the Administrator did not prove that Respondent acted with the necessary intent to deceive anyone when he closed an estate's bank account and cashed a checked for the proceeds by signing the sole signatory's name because he believed that the funds were in danger of being forfeited to the State.
In Brennan, the attorney was charged with preparing and filing certain forms with the State Board of Elections that contained false or misleading information. However, the Hearing Board found that the Administrator failed to present clear and convincing evidence that the attorney knew the statements were false or acted so recklessly as to be considered knowing, and failed to present clear and convincing evidence that the attorney made the statements with the intent to defraud or deceive. In Coladarci, 01 CH 20, M.R. 20228 (September 26, 2005), although there was no finding of a specific intent to be dishonest or fraudulent, the attorney was found to have violated Rule 8.4(a)(4) by engaging in conduct involving misrepresentation. No such distinction is present in this matter.
Lastly, the King Drive property was a part of the Seleman's marital estate and was the subject of various court orders in the Seleman dissolution matter. Respondent's misconduct assisted Mr. Seleman in circumventing these court orders. Accordingly, we find clear and convincing evidence that Respondent engaged in conduct prejudicial to the administration of
justice in violation of Rule 8.4(a)(5). Engaging in official misconduct and assisting your client in engaging in fraudulent conduct certainly brings the legal profession into disrepute in violation of 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). In determining the proper sanction, we consider the proven misconduct along with any aggravating and mitigating factors. In re Witt, 145 Ill. 2d 380, 398, 583 N.E.2d 526 (1991).
Relying on In re Thebeau, 111 Ill.2d 251, 489 N.E.2d 877 (1986), In re Rice, 95 CH 210, M.R. 13391 (March 21, 1997), and In re Cassata, 95 CH 384, M.R. 13334 (March 21, 1997), the Administrator recommends a two-year suspension. In Thebeau the attorney was suspended for two years for a course of conduct including filing a fraudulent petition for the sale of real estate in an estate matter, knowingly permitting forgeries, and improperly notarizing numerous signatures. The attorneys in Rice and Cassata were disbarred for engaging in a scheme with an attorney named Gregory Quinlivan that involved submitting fraudulent invoices to the firm employing Quinlivan and splitting the proceeds.
Respondent, relying on In re Bulger, 02 CH 40, M.R. 19550 (September 27, 2004), In re Passman, 93 CH 573, M.R. 12249 (March 26, 2996), and In re Niew, 98 CH 113, M.R. 17491 (May 25, 2001), submits that even if this Panel finds Respondent engaged in the charged misconduct, which we have, a two-year suspension is excessive. The attorney in Bulger improperly notarized his clients' signatures on a pleading he knew to be false and filed it with
the court. He also testified falsely before the court, made a false statement to the ARDC, and failed to provide competent representation. He was suspended for five months.
In Passman the attorney was suspended for nine months for preparing a false stipulation to dismiss a wage deduction proceeding against his wife, forging the signature of the opposing attorney on the stipulation, and then submitting the stipulation to his wife's employer. The attorney then attempted to cover-up his misconduct by lying to the court, opposing counsel, and the ARDC. The attorney in Niew was also suspended for nine months for notarizing signatures purporting to be her clients' on pleadings in two separate matters. She then made false statements about her conduct in each matter to the ARDC. Additionally, the attorney notarized an affidavit even though she knew it contained false statements and made false statements to a client.
We find Respondent's misconduct in this matter to be more analogous to the misconduct contained in the Bulger, Passman, and Niew matters. In addition, in the factually similar Yamaguchi decision discussed above, the attorney was given a six-month suspension. While the Thebeau decision is somewhat instructive, the Rice and Cassata opinions give us little guidance as the misconduct is significantly more egregious than that committed by Respondent in the present case.
In aggravation, we are particularly troubled by Respondent's lack of candor and his evasive and contradictory testimony during these proceedings. It is also clear that Respondent engaged in this misconduct for pecuniary gain. Although he did not retain the $50,000 "referral fee" he did concede he hoped to receive work from Mr. Seleman in the future.
Respondent also presented significant evidence in mitigation. Several witnesses attested to his good character and his contributions to the community. He provides pro bono services to an underserved part of our community and has no prior discipline.
Accordingly, we believe a one-year suspension is appropriate. We also recommend that Respondent complete the course offered by the Illinois Professional Responsibility Institute. It is clear Respondent needs to be further educated about his professional responsibilities and reminded that the practice of law is a public trust.
Lastly, the Administrator suggests Respondent make restitution to Ms. Sobilo in the amount of $50,000. Before restitution can be required there must be some basis for restitution, usually either an improper benefit to the attorney or a loss to some victim. See In re Alexander, 128 Ill.2d 524, 539 N.E.2d 1260 (1989). Ultimately, there was no financial benefit to Respondent, but it is unlikely that the $7,000 Ms. Sobilo received from the sale of the King Drive property is the appropriate amount to which she is entitled . However, the Administrator presented no evidence to suggest how much Ms. Sobilo is owed. Accordingly, we have no basis upon which to make a recommendation of restitution.
Considering the nature of the Respondent's misconduct and the evidence in aggravation and mitigation, this Panel recommends that the Respondent be suspended from the practice of law for a period of one year and until he completes the course offered by the Illinois Professional Responsibility Institute.
Date Entered: July 8, 2008
|Lawrence S. Beaumont, Chair, with Modupe A. Sobo, and Harry M. Hardwick, concurring.|