Filed January 9, 2008
In re Patrick Clark McClurkin
Commission No. 06 RT 3006
Synopsis of Hearing Board Report and Recommendation
NATURE OF THE CASE: Request for reinstatement after being disbarred for engaging in criminal activity.
RULES DISCUSSED: Supreme Court Rule 767.
RECOMMENDATION: Reinstatement with conditions
DATE OF OPINION: January 9, 2008
HEARING PANEL: John B. Whiton, Eric A. Reeves, and Roberta Parks
PETITIONER'S COUNSEL: Samuel J. Manella
ADMINISTRATOR'S COUNSEL: James A. Doppke and Allison L. Wood
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
PATRICK CLARK MCCLURKIN,
|Supreme Court No. 21325
Commission No. 06 RT 3006
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing on the Petition for Reinstatement of Patrick Clark McClurkin was held on September 21, 2007 at the offices of the Attorney Registration and Disciplinary Commission ("ARDC") before a hearing panel consisting of John B. Whiton, Chair, Eric A. Reeves and Roberta Parks. Petitioner appeared and was represented by Samuel J. Manella. The Administrator was represented by James A. Doppke, Jr. and Allison L. Wood.
On October 18, 1988 Petitioner filed a motion to voluntarily strike his name from the roll or attorneys admitted to practice law in Illinois. The Supreme Court granted the motion on December 12, 1988 and Petitioner was disbarred. Petitioner's motion to strike his name was filed after he pled guilty to two counts of mail fraud and one count of conspiracy to commit mail fraud. United States of America v. McClurkin, 87 CR 276 (N.D. Ill. 1987).
In March 2002 Petitioner filed his first Petition for Reinstatement. After a hearing on that Petition, the Hearing Board recommended reinstatement with conditions but, on review, the Review Board recommended that the Petition be denied. Petitioner then moved to withdraw his Petition, and that motion was allowed by the Supreme Court on March 29, 2005.
On November 28, 2006 Petitioner filed the current Petition for Reinstatement ("Petition") pursuant to Supreme Court Rule 767 and Commission Rule 402. The Petition sets forth information required by Rule 402, including a summary of Petitioner's residences and employment during the discipline period, a list of civil actions in which he was a party, and his financial assets and obligations.
On May 7, 2007, the Administrator filed objections to the Petition and requested that it be denied. The objections focus on the serious nature of Petitioner's misconduct, his mature age and experience at the time of his misconduct, his failure to recognize the nature and seriousness of his misconduct, his failure to make restitution, and the nature of his conduct since he was disciplined.
The parties presented a joint stipulation regarding the Administrator's exhibits and Petitioner's compliance with the Pennsylvania Rules of Disciplinary Enforcement. Petitioner testified on his own behalf, called eight additional witnesses, and introduced four exhibits. The Administrator presented thirty-nine exhibits.
Petitioner testified he is 60 years old, divorced, and the father of an adult daughter and step-daughter. He was raised in Chicago, earned a bachelor of science degree at Tennessee State University in 1970, and then attended law school at Howard University. Following law school, he received a master's degree in city planning from Harvard University in 1974. (Tr. 31-33, 36, 38).
Petitioner stated he briefly considered practicing law in Pennsylvania, and in 1973 he became licensed to practice in that state. He changed his mind, however, and returned to Chicago where he accepted a position as staff attorney for the Veteran's Administration. He continued in that position until about 1980 when he moved to Philadelphia, Pennsylvania to work for the city's director of housing. After approximately one and one-half years, he returned to Chicago and resumed his position with the Veteran's Administration. (Tr. 39-43, 49, 127).
Petitioner testified that when he left Pennsylvania, he had no intention of returning to that state to practice law. He had "no personal clients, no office, no accounts, [and] no business ties" in Pennsylvania. Following his departure, Petitioner did not pay his annual registration fees in Pennsylvania. As a consequence, in March 1983 he was transferred to inactive status by the Supreme Court of Pennsylvania and his name was dropped from that state's roll of attorneys licensed to practice law. The Pennsylvania Disciplinary Board notified Petitioner of his transfer to inactive status by certified letter, with enclosures of the forms and rules with which Petitioner was required to comply. The Pennsylvania rules required him to notify any clients of his transfer and to file a statement of compliance with the Pennsylvania disciplinary board. Petitioner received the letter and signed a receipt for it, but did not file a statement of compliance. He acknowledged that he knew at that time that attorneys were bound by ethical codes, but he was not familiar with the Pennsylvania rules regarding transfer to inactive status, and took no action pursuant to those rules. (Jt. Stip; Tr. 45-47, 127-30; Adm. Ex. 1-3, 8, 10)
Petitioner testified that, upon his return to Chicago in the early 1980s, he became reacquainted with Perry Hutchinson, an employee of Allstate Insurance who Petitioner had first met during college. When Petitioner informed Hutchinson that he was considering opening his own practice, Hutchinson offered to provide assistance by referring clients to Petitioner.
Petitioner agreed to give Hutchinson 20 or 25 percent of his legal fees for the referrals. (Tr. 49-51, 131).
Petitioner left the Veteran's Administration and set up a private practice with one associate. Petitioner received referrals from Hutchinson which, initially, were legitimate personal injury cases. By the end of 1981, however, Petitioner was aware that the referrals involved "staged" accidents that were set up by Hutchinson or Hutchinson's associate, Forest Bailey. The fraudulent accidents involved a designated driver and purported victims who falsely claimed they had been struck by the driver. The sham victims were sent to Dr. Aaron Long, who was a part of the conspiracy, and documentation for fictitious medical treatment was then submitted to Petitioner, who communicated with the insurance companies and negotiated a settlement based on the false medical bills and false wage loss documents. The settlement proceeds were divided among the participants, with one-third going to the victim, one-third to Petitioner, and one-third to Hutchinson and Bailey. Petitioner represented fourteen or fifteen phony victims over a period of three or four years and received approximately $40,000 from those cases. (Tr. 51-58, 134-38, 224; Adm. Ex. 4).
At the time Petitioner was involved in the fraudulent activity, he was in his thirties and had been working for approximately seven years. He stated he participated in the fraudulent scheme "because of greed," and he blames no one else for his actions. He is aware that he brought dishonor to both his family and the legal profession, which he holds in high esteem. He believes if he had been mentored, he would not have become involved in the scheme. (Tr. 56, 69-73).
Petitioner testified the fraudulent scheme ended in 1985 when the participants learned the government was investigating their activities. He acknowledged that, in an effort to protect
himself, he advised his clients not to cooperate with the investigation. When Petitioner learned that Dr. Long and Bailey were considering "eliminating" the individual who had acted as the driver, Petitioner informed them he would not be a party to any life-threatening measures and would report such actions to the authorities. A decision was made to send the individual out of the country and Petitioner contributed $1500 to accomplish that act. (Tr. 58-60; 139-44; Adm. Ex. 5).
When Petitioner was questioned by the FBI, he initially denied knowing that one driver was responsible for several of his clients' accidents. When confronted with prior cases involving the same driver, he began cooperating with the investigation, and disclosed his involvement in the conspiracy as well as the activities of the other participants. Petitioner denied being a part of the original design, or knowing that the scheme had been in operation before his involvement. He stated he would not have become involved had he known that fact. (Tr. 55, 61-62).
Petitioner was charged with violating various federal statutes and on October 23, 1987, he pled guilty to one count of conspiracy and two counts of mail fraud. On August 28, 1988 he was sentenced to eight years in prison, followed by a five-year period of probation conditioned on completion of 1500 hours of community service and payment of a $1,000 fine. The sentence did not include any order of restitution. In October 1988 Petitioner began serving his prison term. (Tr. 63-64; Adm. Ex. 4, 6, 7).
On October 18, 1988 Petitioner filed a motion to strike his name from the roll of attorneys licensed to practice law in Illinois. He complied with the requirements of the Illinois Rules of Professional Conduct at that time, but gave no thought to Pennsylvania's rules because he had left that state years earlier and committed no crime there. He did not notify the Pennsylvania disciplinary authorities of his conviction, as required by that state's disciplinary
rules.1 Petitioner stated he was not familiar with Pennsylvania's registration and disciplinary rules during the relevant time period. (Jt. Stip.; Tr. 46-48, 73, 145; Adm. Ex. 8, 9, 11).
During Petitioner's term of incarceration, he filed a petition for issuance of a writ of habeas corpus, contesting the jurisdiction of the federal court. He acknowledged that the jurisdictional argument was frivolous, and pointed out that he never claimed a lack of guilt for the underlying activities. He described his filing as "legal gymnastics" to keep his sanity and take his mind off the fact he was in prison. As to a representation that he appealed his conviction on grounds of ineffective counsel and abuse of judicial discretion, he admitted he did not file an appeal on those grounds and could not recall why he made that statement. On October 12, 1989 the petition for a writ of habeas corpus was denied. Petitioner appealed the denial and on December 19, 1990, the Seventh Circuit Court of Appeals affirmed the lower court's decision. (Tr. 65-66, 146-49; Adm. Ex. 14-16, 19).
Petitioner testified that, because he was a model prisoner, his sentence was reduced to sixteen months. Following his release from prison, he was required to live in a halfway house for four months and to secure employment. He completed 1500 hours of community service by working with children at the YMCA. (Tr. 64, 67).
In January 1990, and in February and March 1992, Petitioner executed several affidavits at the request of Forest Bailey regarding Bailey's involvement in the insurance fraud scheme. The affidavits were executed in connection with Bailey's post-conviction proceedings. Petitioner testified that his statements in the affidavits were truthful. (Tr. 82, 149-50; Adm. Ex. 17-18).
In 1994 Petitioner completed an application for employment at Galaxie Lumber. He explained that he did not include any reference to his law degree because he did not believe that
fact was relevant to obtaining a sales position. He did list his degree from Harvard University. Petitioner pointed out that when he was interviewed for the sales position by Tony Wrenn, he informed Wrenn of his law degree as well as his disbarment for criminal conduct. At some point Wrenn also became aware that Petitioner had been incarcerated. (Tr. 90-92, 206, 235-36; Adm. Ex. 20).
In completing the Galaxie application Petitioner represented that he worked as a mortgage broker between August 1988 and July 1990. He acknowledged those dates were incorrect and that he was serving his prison sentence during that time period. He stated that his association with the mortgage company was at a later date and he never received any money from that association. (Tr. 207, 235).
Petitioner has worked for Galaxie Lumber continuously since 1994. He sells home improvement services, trains new salesmen, and handles cash on a routine basis. In his early years he set sales records and was paid "reasonably well" but, because of the current economy and the difficulties in obtaining financing for home improvement, he now has to work twice as hard to maintain his income. (Tr. 93-95, 237).
In November 1997 Petitioner was involved in an altercation with his wife. The dispute escalated and when his wife attempted to throw some of his belongings out of a window, Petitioner shoved her. The police were called and Petitioner was charged with domestic battery. Petitioner testified that, although he believed he was innocent of any charges, he did not feel he could prevail with a female prosecutor and a female judge. Therefore, on the advice of his counsel, he pled guilty to a misdemeanor charge of reckless conduct. He was placed on supervision for one year, and an order of protection was entered against him. He also underwent a drug and alcohol evaluation, which showed that he had no symptoms of alcohol or drug abuse.
Petitioner denied having any biases toward women and stated he has no history of physical or mental abuse. (Tr. 76-81; 222-23; Adm. Ex. 29).
Petitioner testified regarding information included on his income tax returns. He stated that his accountant, Kerry Van Isom, has prepared his tax returns for the past ten or twelve years. Petitioner's practice has been to take his account information, checks, and receipts to Van Isom, and then sign and mail the returns after they are completed. Petitioner acknowledged that some of his returns misstate his home address and business address, one return lists an incorrect social security number for his daughter, and a form from the IRS was sent to his parent's address. He attributed the errors to his own lack of attention and to typographical mistakes on the part of his accountant. Several returns identify his daughter, Portia McClurkin, as living with him even though she was away at college in Virginia. He testified that he considered her to be a dependent while she was in college because he supported her financially. (Tr. 33, 87-89, 210-13, 217, 232; Adm. Ex. 21-28).
Petitioner filed his first Petition for Reinstatement in 2002. The Hearing Board which considered the petition recommended reinstatement with the condition that Petitioner make restitution and perform 100 hours of community service to a group which provides services to battered women. Petitioner complied with the service requirement by working with Southwest Women Working Together, an organization which assists victims of domestic violence. In his volunteer capacity, he participated in discussions with children and explained to them that they could avoid abusive situations by going to school and learning skills. Petitioner stated that he enjoys contributing to his community and does so through his interactions and meetings with young people. He believes he provides a good role model as someone who "had it all, lost it all, and regained it." He noted that while he was in private practice, he conducted seminars at high
schools to encourage students to continue with their education. (Tr. 69, 78, 101, 103, 223; Adm. Ex. 31).
With respect to restitution, Petitioner testified that after the previous hearing panel recommended that he pay $40,000 to various insurance companies, he set up an escrow account in August 2005 for that purpose. A Northern Trust bank statement for an account under the names Patrick C. McClurkin and Clark McClurkin entitled "Insurance Restitution Escrow" indicates that the balance in the account as of August 27, 2007 was $40,915. Petitioner identified Clark McClurkin as his father and explained that he received $40,000 from his father as an advance on his inheritance. His father's name is on the account so the funds would revert back to him in the event that anything happened to Petitioner. (Tr. 83-85, 224-25, 240, 247; Pet. Ex. 4).
Petitioner testified he has not paid the insurance companies because he has no records indicating the amounts owed, the dates of the accidents, or the companies involved. He explained that when he separated from his wife, she discarded many of his files. Further, although he sought the information from the attorney who represented him in his criminal proceedings, that attorney did not have the information because restitution was not part of Petitioner's plea agreement. Petitioner stated that if the proper recipients can not be ascertained, he will be happy to donate the money to any organization designated by the panel. (Tr. 83-85, 227-29, 242).
Petitioner identified monthly statements from his Morgan Stanley investment account and three Northern Trust checking accounts. He acknowledged that the Northern Trust statements reflect debits from those accounts to the investment account. The transfers, which were made for
retirement purposes, have occurred on a regular basis, and totaled $24,800 between 2003 and 2006. (Tr. 218-19; Adm. Ex. 33-39).
Petitioner's real estate holdings consist of his residence, two rental buildings, and another property to which he recently received a quit claim deed. He stated that the residence and rental properties are mortgaged, and he is uncertain whether he holds any real interest in the property he received by quit claim. (Tr. 95, 220, 233-34).
When questioned about his current knowledge of the law, Petitioner stated he has taken several continuing legal education courses, as well as the ARDC course on professional responsibility. He presented six certificates from the Illinois Institute for Continuing Legal Education, dated between November 2002 and August 2006, which evidenced his completion of thirty-three hours of legal education on a variety of topics. Petitioner also subscribes to and reads the Daily Law Bulletin, talks to attorneys and judges, and watches Court TV. (Tr. 96, 222, 243; Pet. Ex. 1, 2).
Petitioner stated that if his law license is reinstated, he will continue working at Galaxie Lumber while easing into the practice of law with attorney James Hardemon. He does not intend to resume a solo practice, and would never engage in or be associated with anyone who engaged in illegal activity. As a lawyer, Petitioner feels he could contribute to the legal profession by being an effective advocate for those less fortunate than himself, and he could contribute to the community by being a role model for others who have made mistakes. Petitioner also expressed the importance of redeeming himself in the eyes of his parents and his colleagues. (Tr. 97-99, 245-46).
David Anthony Wrenn
David Anthony Wrenn, the former general sales manager of Galaxie Lumber and Construction Company, testified that he hired and trained Petitioner as a salesman for that company. Wrenn recalled reviewing Petitioner's employment application, which did not disclose that Petitioner had attended law school and earned a law degree, but Wrenn did not feel deceived by that omission. As for Petitioner's listing of dates of employment for a period of time when Petitioner was actually in prison., Wrenn stated the times and dates of Petitioner's prior employment were not a concern to him at the time. When Wrenn interviewed Petitioner, Petitioner disclosed he had made a mistake that caused him to lose his law license. Wrenn did not ask for any further explanation because he believed the owner of the company had already discussed the issue with Petitioner. Wrenn was aware that other ex-convicts had been hired to work at Galaxie. (Tr. 182-90; Adm. Ex. 20).
Wrenn testified that Petitioner was loyal, hardworking, handled cash for the company without any problems, and was the best salesman he ever had at Galaxie. Wrenn believes Petitioner is fit for any profession. (Tr. 186-87, 191).
Kerry Van Isom
Kerry Van Isom, an accountant, testified he has prepared Petitioner's tax returns for twelve years. Petitioner provides his canceled checks and bank statements to Van Isom, Van Isom completes the tax returns, and then Petitioner signs and mails the returns. Petitioner never represented to Van Isom that he has any accounting skills. (Tr. 106-08, 111-12).
Van Isom stated that Portia McClurkin was listed as a dependent on Petitioner's 1998 tax return because Petitioner paid the expenses of the home where she resided. Her status as a dependent did not change when she was in college because Petitioner continued to pay the
household expenses. Van Isom noted that under those circumstances, the tax code allows Petitioner to claim the status of head of household even though Portia did not live with him. (Tr. 109, 119; Adm. Ex. 21, 28).
Van Isom stated that Form 8829, regarding expenses for business use of a home, was included as part of Petitioner's tax returns in 1997 and 1998 even though no deduction was taken for use of a home office in those years. The form, which had been used in a prior year and was therefore entered into Van Isom's computer system, should not have been included. (Tr. 112-14, Adm. Ex. 24, 25).
In 2005, Petitioner moved into a new home and used part of the space for a home office. Van Isom used Form 8829 to take a deduction for Petitioner's business use of his home, but mistakenly listed Petitioner's former address on the return. Regarding the specific area of the home used for business purposes, Van Isom listed numbers on the tax returns to reflect Petitioner's use of one-seventh of the total space, but those numbers were not a description of total square footage. (Tr. 110, 114-15; Adm. Ex. 24, 27).
Van Isom testified he signed Petitioner's returns as the "preparer" and felt comfortable with the way he handled the calculations and entries. He acknowledged responsibility for the use of any incorrect addresses. With respect to the fact that a 1099-MISC form was sent to Petitioner at his parents' address at 1941 South Calumet, Van Isom stated that the IRS would not attach any significance to the address to which the form was sent. (Tr. 110-11, 124; Adm. Ex. 26).
Walter Jones, an attorney, testified he has known Petitioner for over forty years and represented Petitioner in his criminal proceedings. He stated that Petitioner cooperated with the government, was forthcoming about his guilt, has been remorseful, and recognizes the serious
nature of his misconduct. Concerning any repayment to the insurance companies, Jones stated that he has no files to determine which insurance companies were involved or harmed. He noted that the federal district Court never mentioned restitution. Petitioner has brought up the subject of repayment from time to time and has asked for any relevant files, but Jones could not locate anything. (Tr. 161-64).
Jones testified that Petitioner's reputation for honesty and integrity is good. He believes Petitioner's misconduct was an aberration, and Petitioner is now the man Jones always knew. If Petitioner were reinstated, Jones would assist him in any way he could. (Tr. 165-66).
Jetaun Wright testified she was the Associate Director of Volunteer Resources at Southwest Women Working Together ("SWWT"), a community-based agency that assists victims of domestic violence, from 2004 to 2007. During Wright's tenure at SWWT, she was contacted by Petitioner who informed her that he had been mandated to perform volunteer services. According to Wright, Petitioner began volunteering for SWWT in August 2005 and enthusiastically contributed over 100 hours of his time. As a volunteer, Petitioner worked closely with teenage boys and, in Wright's opinion, provided a positive and inspirational role model for them. Petitioner last volunteered his time in December 2006. (Tr. 197-203; Pet. Ex. 3).
Judge Orville Hambright
Orville Hambright, a Circuit Court Judge, testified he has known Petitioner since 1961 and considers Petitioner to be a friend. Judge Hambright believes Petitioner has a good reputation for being truthful, and that Petitioner's criminal conduct was not indicative of his
character or overall persona.. If Petitioner were reinstated, Judge Hambright would assist him if possible. (Tr. 154-59).
James Hardemon, an attorney, testified he has known Petitioner since elementary school and considers Petitioner to be a friend. He believes Petitioner has a reputation for being very reliable and that his criminal activities were out of character. Hardemon and others who know Petitioner have put Petitioner's misdeeds behind them because he has demonstrated that he is a hard-working, honest and upright member of their community. Hardemon stated that his office would be open to Petitioner if he were reinstated, and Hardemon would monitor Petitioner's practice if asked to do so. (Tr. 171-75).
Judge John Steele
John Steele, a judge in the Circuit Court of Cook County, testified he has known Petitioner since childhood. He believes that although Petitioner has had issues in the past, his current reputation for honesty is very good. Judge Steele recently learned of the details of Petitioner's crime from a representative of the ARDC, but that knowledge does not change his current opinion of Petitioner. (Tr. 177- 80).
Judge Michael Stuttley
Michael Stuttley, a judge in Markham, Illinois, testified that he has known Petitioner for twenty-six years and believes Petitioner's reputation for truth and veracity is beyond reproach. In Judge Stuttley's opinion, Petitioner's criminal action was a mistake in judgment rather than a reflection of his integrity. If Petitioner's license to practice law were restored, Judge Stuttley would help him in any way possible. (Tr. 193-95).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The purpose of a reinstatement proceeding is the same as that of an attorney disciplinary proceeding, that is, to safeguard the public, maintain the integrity of the profession, and protect the administration of justice from reproach. In re Rothenberg, 108 Ill.2d 313, 484 N.E.2d 289 (1985). A petitioning attorney seeking reinstatement to the practice of law has the burden of proving by clear and convincing evidence that he should be reinstated. In re Richman, 191 Ill.2d 238, 730 N.E.2d 45 (2000); In re Parker, 149 Ill.2d 222, 595 N.E.2d 352 (1990). In considering a petition for reinstatement, the focus is on the attorney's rehabilitation, present good character and current knowledge of the law, with rehabilitation being the most important consideration. In re Martinez-Fraticelli, 221 Ill.2d 255, 850 N.E.2d 155 (2006); In re Fleischman, 135 Ill.2d 488, 533 N.E.2d 352 (1990). There is no presumption in favor of reinstatement. In re Richman, 730 N.E.2d at 50.
Supreme Court Rule 767(f) sets forth the following factors to be considered in determining whether reinstatement is appropriate:
the nature of the misconduct for which the petitioner was disciplined;
the maturity and experience of the petitioner at the time discipline was imposed;
whether the petitioner recognizes the nature and seriousness of the misconduct;
when applicable, whether petitioner has made restitution;
the petitioner's conduct since discipline was imposed; and
the petitioner's candor and forthrightness in presenting evidence in support of the petition.
Keeping in mind the foregoing factors and the principles articulated by the Court, we now examine the evidence before us to determine whether this Petitioner has sufficiently established his rehabilitation, good character and current knowledge of the law.
Nature of Misconduct
The severity of the misconduct leading to an attorney's discipline is an important factor in determining whether reinstatement is warranted. Indeed, the Supreme Court has advised that the significance of this factor cannot be minimized by subsequent exemplary conduct. In re Richman, 191 Ill.2d 238, 740 N.E.2d 45 (2000).
Petitioner does not deny that the misconduct for which he was disciplined was egregious. By negotiating with insurance companies on behalf of sham victims of staged auto accidents and accepting the ill-gotten gains from that scheme, he defrauded the insurance companies and engaged in criminal conduct. The fact that the illegal conduct continued for several years adds to the serious nature of his actions, as does the fact that he urged his clients to refrain from cooperating with the authorities. We do note, however, that Petitioner was not the architect of the scheme and, after being confronted by the authorities, disclosed his involvement in the conspiracy. Petitioner's fraudulent activities resulted in a period of incarceration as well as his voluntary disbarment.
In determining whether Petitioner's serious misconduct was of such a nature that it should bar his reentry to the practice of law, we have reviewed the misconduct in other reinstatement cases and ascertained that the Supreme Court has reinstated attorneys who have participated in equally egregious fraudulent activities. In In re Keane, 102 Ill.2d 397, 466 N.E.2d 208 (1984) an attorney was convicted of conspiracy and mail fraud in connection with a land purchase scheme and served two years of a five-year sentence. He was reinstated to the practice of law after being disbarred for the criminal conduct. In In re Silvern, 92 Ill.2d 188, 441 N.E.2d 64 (1982), an attorney was reinstated after his disbarment and conviction for two counts of mail fraud and one count of conspiracy for his participation in a scheme to defraud insurance
companies. He was sentenced to eighteen months in prison. Most recently, in In re Martinez-Fraticelli, 221 Ill.2d 255, 850 N.E. 2d 155 (2006), the Supreme Court reinstated an attorney who defrauded taxpayers by accepting wage payments and health insurance coverage totaling approximately $56,000. That attorney also served time in prison.
Petitioner's misconduct was reprehensible in nature and resulted in harm to various insurance companies. Nevertheless, having considered the foregoing precedent, we conclude that the nature of Petitioner's misconduct, while very serious, does not preclude reinstatement.
Maturity and Experience of Petitioner
At the time Petitioner first became involved in the fraudulent insurance scheme, he was in his mid-thirties and had been working as an attorney for approximately seven years. At the time of his indictment, he was forty years old. Petitioner noted that, although he had been working for several years when he engaged in the misconduct, he had been in private practice only a short time.
Had Petitioner's misconduct stemmed from a lack of knowledge or experience associated with operating his own personal injury practice, we might consider his lack of experience in that area as a factor weighing in his favor. Petitioner's misdeeds, however, were not born of any confusion or lack of experience; rather, his activities resulted from basic dishonesty and greed. No great depth of legal experience, or even maturity beyond adolescence, is necessary to understand that staging phony auto accidents for personal profit is corrupt and deceitful. We conclude therefore that Petitioner was sufficiently mature and experienced to recognize that his actions were wrong.
We also recognize that this factor is seldom, if ever, a reason for denying a petition for reinstatement. Other attorneys who have committed inherently dishonest acts and were more
seasoned than Petitioner at the time of their misconduct, have been reinstated to the practice of law. See In re Silvern, supra; In re Fleischman, 135 Ill.2d 488, 553 N.E.2d 352 (1990).
Recognition of Nature and Seriousness of Misconduct
The third factor to be considered is whether Petitioner recognizes the nature and seriousness of the misconduct. Expressions of remorse and acknowledgments of wrongdoing are considered to indicate a recognition of misconduct. See In re Parker, 149 Ill.2d 222, 595 N.E.2d 549 (1992); In re Livingston, 133 Ill.2d 140, 549 N.E.2d 342 (1989). Attempts to rationalize or justify misconduct are signs that an attorney does not appreciate the nature or seriousness of his misconduct. See In re Livingston, 133 Ill.2d 140, 549 N.E.2d 342 (1989).
Petitioner acknowledged that his misconduct stemmed from greed and that his actions were wrong. He accepted responsibility for his actions, blamed no one but himself, and expressed his sorrow at having brought disgrace to the legal profession, to his family, and to himself. Walter Jones, the attorney who represented Petitioner in his criminal proceedings, corroborated Petitioner's recognition of misconduct and his remorse.
Petitioner's admissions, as well as his demeanor during the hearing, demonstrated to us that he understands the severity of his misconduct, and is genuinely repentant. We find therefore that Petitioner recognizes the nature and seriousness of his misconduct.
The fact that Petitioner filed a habeas corpus petition while in prison and executed affidavits in the post-conviction proceedings of one of his co-conspirators does not alter our opinion. Those events, which occurred between fifteen and twenty years ago, did not involve any claim of innocence by Petitioner or detract from his clear admission of guilt. According to Petitioner, working on the habeas corpus petition was a therapeutic attempt to alleviate the depression he was experiencing in prison. As for the affidavits signed at the request of co-
conspirator Forest Bailey for use in Bailey's post-conviction proceeding, Petitioner maintained, and the Administrator did not dispute, that the statements in the affidavits were accurate. We do not view either act as diminishing or discrediting Petitioner's clear acknowledgments of wrongdoing and remorse.
Payment of Restitution
The Supreme Court has stated that restitution is "an important factor" in a reinstatement proceeding, In re Martinez-Fraticelli, 221 Ill.2d 255, 850 N.E.2d 155 (2006), and should be a condition of reinstatement except in those rare instances where repayment to the victims is conclusively established to be an impossibility. In re Schechet, 105 Ill.2d 516, 475 N.E.2d 828 (1985). The Court has also stated that although restitution is relevant in determining whether a disbarred attorney has been rehabilitated, it is not the controlling consideration. In re Thomas, 76 Ill.2d 185, 390 N.E.2d 890 (1979).
Petitioner has not made restitution to the insurance companies that were defrauded. He testified he has been willing to make restitution but no longer has records which could identify the companies, or the amounts owed to those companies. He made inquiry to Walter Jones, his attorney in his criminal proceedings, but Jones did not have the necessary information. Petitioner has not contacted the individual insurance companies because, without the names of claimants, the dates of accidents, or any file numbers, he believes the inquiry would be futile. Lacking the precise information needed to make repayment, Petitioner deposited $40,000 into an escrow account for the purpose of completing restitution when an appropriate recipient(s) is identified. That amount represents Petitioner's total pecuniary gain from his participation in the fraudulent scheme.
In similar situations, the Court has reinstated attorneys despite the absence of restitution to specific victims. For example, in In re Fleischman, 135 Ill.2d 488, 553 N.E.2d 352 (1990) an attorney made illegal payments to the Cook County board of tax appeals for the claimed purpose of ensuring that his clients' files were reviewed. The attorney had not made restitution, as no individual victims were identifiable, but expressed his willingness to do so. The Court assigned a dollar amount to the benefit received by the attorney and ordered that he be reinstated upon payment of that amount to the treasurer of Cook County.
In In re Silvern, 92 Ill.2d 188, 441 N.E.2d 64 (1982), the attorney participated in a scheme to defraud insurance companies but, as in the present case, did not retain records which could identify the victims of his fraud. In lieu of repayment to the insurance companies, the attorney placed funds in a trust for future payment in the event the companies could be identified. The money was ultimately give to the Legal Assistance Foundation of Chicago. In granting the petition for reinstatement, the Court rejected the Administrator's argument that the attorney could have discovered the identity of the victims if he had tried harder, and noted that while early and full restitution to the true victims would have strengthened the attorney's case for reinstatement, the lack of restitution was not a bar to the petition. The Count believed the attorney did not intend to slight the true victims; rather, the attorney was unable to remember which insurance companies were involved and gave up trying to identify them.
In In re Thomas, 76 Ill.2d 185, 390 N.E.2d 890 (1979) the attorney acknowledged purchasing personal injury cases from solicitors and guaranteeing payments to a specific medical provider. The Court, in granting reinstatement even though the attorney had not made restitution to his former clients, noted:
More than 10 years have elapsed since petitioner dealt with the clients . . . and he testified that he no longer has either the files or any information that would enable
him to locate those people. Under these circumstances petitioner's failure to show an effort to make restitution does not serve to preclude his being reinstated. We note that, as an alternative, petitioner has offered to contribute "an appropriate sum to some charity or to an attorney's fund" but do not consider that so doing should be made a condition of reinstatement.
The Administrator directed our attention to several cases which, while relevant, are distinguishable from the present situation. In In re Schechet, 105 Ill.2d 516, 475 N.E.2d 828 (1985) an attorney who admittedly owed more than $77,000 to an insurance company which he defrauded, agreed to satisfy his obligation by paying $12,000 in installments of $100 per month. In denying the attorney's petition for reinstatement, the Court was disturbed that the monthly payments to the insurance company had been sporadic, even though the attorney had $40,000 in the bank and had made deposits to an investment fund. In contrast to Schechet, Petitioner in the current case has set aside the full amount of his pecuniary gains and stands ready to make full repayment.
In In re Richman, 191 Ill.2d 238, 740 N.E.2d 45 (2000), the attorney's first two petitions for reinstatement were withdrawn after hearing panels recommended against reinstatement. Both panels had suggested that the attorney needed to make restitution for bribes he had paid to claims adjusters. After filing a third petition for reinstatement, the attorney made a payment of $1200 to the Illinois Bar foundation in compensation for his bribes. In denying the third petition, the Court found that the attorney's delay in repayment, which occurred years after the initial suggestion by the hearing panels and months after the filing of the most recent petition, weighed against his reinstatement.
As was the case in Richman, the Petitioner before us filed a previous petition for reinstatement. The prior hearing panel recommended that he be reinstated upon condition that he repay $40,000 to sixteen specified insurance companies "that are currently in existence." Although Petitioner, like the attorney in Richman, did not take immediate steps toward
restitution after it was recommended by the hearing panel, we attribute his delay to his lack of information regarding specific amounts owed to the particular companies. The fact that the prior recommendation did not specify amounts or suggest a method for determining what amounts should be paid to which companies, reflects the uncertainties and problems involved with attempting to order precise repayment at such a late date.
Upon review, the Review Board allowed for the possibility that the amounts owed to each carrier could not be precisely determined, but faulted Petitioner for making no efforts at repayment, "even on an installment basis or into a trust fund." Approximately seven months after the Review Board's reference to setting aside money in a trust fund, and more than a year in advance of the filing of his current petition, Petitioner did deposit $40,000 into a trust account earmarked for repayment. We believe this action demonstrates a sincere commitment to restitution and distinguishes Petitioner's efforts from those made by the attorney in Richman.2
Finally, in In re Berkley, 96 Ill.2d 404, 451 N.E.2d 848 (1983), the attorney seeking reinstatement maintained that his lack of records and files prevented him from making restitution to the victims of his fraud. In lieu of direct restitution, he contributed $10,000 to a bar association fund, even though his profiteering most likely resulted in gains of more than $400,000. The Court, after noting that alternative methods could only be used when repayment to victims is conclusively established to be an impossibility, stated that the attorney had made no inquiry of the defrauded insurers or the U.S. Attorney. The case was remanded with directions that the attorney establish proof of restitution or demonstrate its impossibility. The Administrator represented to us that the attorney was subsequently reinstated but, because we were not provided with any record of the proceedings on remand, we do not know what type of proof, if any, was presented by the attorney.
We believe that by setting aside funds in an escrow account, Petitioner has taken action consistent with cases in which attorneys have been reinstated. Indeed, he has demonstrated more than a "willingness" to make restitution as required by the Fleischman decision; he has set aside his ill-gotten gains and stands ready to make payment as directed. The fact that he has not made payment to a specific company or individual does not diminish his efforts in our eyes, nor do we consider it a bar to reinstatement. Unlike the prior panels which have considered this issue, we conclude that determination of specific amounts owed to companies which may or may not exist3 is, if not a conclusive impossibility, at least a constructive one. Therefore, with the Silvern and Thomas cases as our guide, we conclude that Petitioner has established his readiness to make restitution and therefore that factor should not preclude reinstatement.
Conduct Since Discipline was Imposed
The Administrator has argued that Petitioner's conduct since he was disciplined is a factor that weighs against his reinstatement. We do not consider the incidents raised by the Administrator as reflecting negatively upon Petitioner's current rehabilitation, however, and therefore we do not believe they present an obstacle to reinstatement.
In 1998 Petitioner pled guilty to a misdemeanor charge of reckless conduct in connection with a domestic dispute and was sentenced to supervision for one year. Petitioner believed he was innocent of the charge but agreed to a guilty plea, on advice of counsel, to avoid the risk of a trial. Following his sentence, he complied with the terms of his supervision and passed a drug and alcohol test.
We note that the hearing panel which considered Petitioner's initial request for reinstatement did not view the domestic incident as an impediment to reinstatement but, apparently as a precautionary measure, recommended that Petitioner contribute 100 hours of his
time to an organization that provides aid to battered women. Although that recommendation was never imposed by the Supreme Court, because the initial petition was withdrawn, Petitioner complied with the hearing panel's recommendation. Indeed, we received evidence that his volunteer time surpassed the number of recommended hours. Having considered Petitioner's completion of community service, the absence of any prior or subsequent history of abusive behavior toward women, and the fact that his account of the dispute was not contradicted, we believe this issue can be laid to rest. His conviction has no impact on our current assessment of his rehabilitation.
The Administrator cited to other acts engaged in by Petitioner, all of which we believe are insignificant compared to the overall manner in which he has conducted his life since he was disciplined. For example, we received evidence that when Petitioner completed an employment application in 1994, he did not disclose that he had attended law school and worked as an attorney. Further, he provided dates of employment that were obviously incorrect since they coincided with the time he was incarcerated. We also heard testimony, however, that Petitioner freely discussed his law degree and disbarment in the employment interview, and made no effort to conceal his incarceration. As for the erroneous dates of employment, Petitioner acknowledged the mistake at hearing.
In In re Parker, 149 Ill.2d 222, 595 N.E.2d 549 (1992) an attorney mischaracterized her previous work experience on an employment application and falsely stated she had no previous convictions. The Supreme Court determined that the attorney was hired prior to completing the application and made the misstatements to save herself from embarrassment, rather than to secure the job. Under the circumstances, the attorney's false statements were not sufficient to deny reinstatement. We had a similar impression regarding Petitioner's initial lack of disclosure
in this case. We also find it significant that Petitioner disclosed his disbarment and incarceration to the company before he was hired.
The attorney in In re Parker, like Petitioner in the present case, also made misstatements on her tax returns. Parker failed to report income, a more serious error than the discrepancies on Petitioner's returns, but the Court found the omissions were unintentional and had been corrected by Parker. Similarly, we do not believe that any erroneous addresses or social security numbers on Petitioner's tax returns were intentionally provided. Indeed, Petitioner's accountant accepted responsibility for those errors. As for Petitioner's listing of his daughter as a dependent when she did not reside with him, the Administrator did not establish that he was not entitled to make that claim.
Finally, the Administrator faults Petitioner for failing to comply with Pennsylvania's disciplinary rules and procedures upon his transfer to inactive status and after his conviction. Again, a similar issue arose in Parker where the attorney failed to comply with an Illinois Supreme Court Rule requiring attorneys to notify clients upon disbarment, and to file an affidavit stating that the notice requirement had been met. The evidence in that case established that the attorney had no clients to notify and she believed her lawyer had filed the requisite affidavit. Under the circumstances, the attorney's failure to comply with the rule was not detrimental to her reinstatement.
Like Parker, Petitioner in this case had no clients or law practice in Pennsylvania at the time he was transferred to inactive status, and therefore notification was not an issue. He acknowledged that he should have filed a certificate evidencing that fact, just as he should have notified the Pennsylvania authorities of his conviction. We were convinced that his failure to do so was not intentional or an indication of lack of respect for that state's procedures; rather, we
believe Petitioner's omissions were mere oversights that occurred because of the passage of time and the fact that he maintained no ties to Pennsylvania.4 His full compliance with Illinois procedures suggests to us that, had he been cognizant of his obligations with respect to Pennsylvania, he would have complied with those obligations.
Contrary to the Administrator's assertions, we believe Petitioner's conduct since discipline was imposed has been commendable. We note that, with the exception of Petitioner's conviction for reckless conduct, the objectionable conduct cited by the Administrator was not addressed in the prior hearing board report and therefore we assume it was not raised by the Administrator in opposition to Petitioner's initial petition. We view the new challenges as inconsequential in nature, and nothing more than an attempt to magnify and compound minor missteps in order to paint a picture of Petitioner that is unjustifiably condemning.
In In re Fleischman, supra, the Court reinstated an attorney who, during his period of disbarment, had worked as a commodities trader, an automobile salesman, and a seller of surplus goods. The Court looked favorably upon the fact that the attorney had applied himself "energetically to jobs others might consider below his former station in life." 553 N.E.2d at 355. Like the Fleischman court, we applaud Petitioner for successfully undertaking a new career and in so doing, building a reputation of trust and respect. As a salesman for Galaxie, Petitioner has shown himself to be a dedicated, hard-working, and trustworthy employee who has handled his employer's cash without problem or incident. In addition, Petitioner has proven himself to be a conscientious and responsible father, as well as a person who is willing to contribute to his community. Therefore, we conclude that Petitioner's conduct since discipline is a significant factor weighing in his favor.
Candor and Forthrightness in Presenting Petition
With respect to Petitioner's candor and forthrightness, the Administrator argued at hearing that Petitioner displayed a lack of candor by claiming that restitution was an impossibility. Since we have concluded that restitution to specific parties is, at the least, a constructive impossibility, we do not view Petitioner's position as lacking in forthrightness. No other issues were raised concerning Petitioner's lack of candor, and we find therefore that he was candid and forthright in his presentation of his petition and evidence.
Consideration of the foregoing factors is intended to aid in our determination of Petitioner's rehabilitation, present good character and current knowledge of the law. Rehabilitation is "a matter of one's ‘return' to a beneficial, constructive and trustworthy role." In re Wigoda, 77 Ill.2d 155, 395 N.E.2d 571, 574 (1979).
While we believe that Petitioner engaged in very serious misconduct and that his behavior cannot be attributed to immaturity or lack of experience, the evidence showed that he has acknowledged his misconduct, understands the severity of his acts, stands ready to attempt to correct the financial damage caused by his conduct, and has led an honorable and productive life since his release from prison. Petitioner spoke with candor about his misdeeds, his attempts to overcome his past misconduct, and his desire to be positive role model for today's youth. The witnesses who testified on behalf of Petitioner were steadfast in their belief that he is a trustworthy person and that his fraudulent acts were an aberration. Further, several of the witnesses who are in a position to assist Petitioner in his return to practice expressed their willingness to do so. The Administrator did not present any witnesses who disagreed with the positive character assessments.
The Administrator expressed some dissatisfaction with Petitioner's attempts to stay abreast of legal developments, specifically targeting his statement that he watches court TV. While we give no credit to that activity as an educational tool, Petitioner's statement should not detract from his more substantive accomplishments, that is, his attendance at six day-long continuing legal education classes, his completion of the ARDC class in professional responsibility, and his daily review of a legal newspaper.5 We believe he has shown a commitment to keeping up-to-date with respect to legal developments, and note that his effort is equivalent to that of other attorneys who have been reinstated. See e.g. In re Martinez-Fraticelli, supra; In re Fleischman, supra; In re Sitter, 95 CH 380, M.R. 11353 (January 23, 1996).
We conclude that Petitioner has clearly and convincingly proved himself to be rehabilitated, of good character, and that he has an adequate knowledge of the law. His moral fiber, humility, and remorse for past misconduct has persuaded us he is not at risk to repeat the mistakes he made more than twenty years ago. Because we believe Petitioner presented as strong a case for reinstatement as did the attorneys in Fleischman, Silvern, and Thomas, we recommend that he be reinstated to the practice of law, provided that he complete restitution and enter into a mentoring program with attorney James Hardemon, who has expressed his willingness to assist Petitioner.
The only issue which remains is how to direct restitution. We believe a recommendation that Petitioner make restitution to insurance companies, without a specific amount owed to each company, is arbitrary and unworkable. Therefore, we adopt the Administrator's suggestion that Petitioner make payment to the National Insurance Crime Bureau ("NICB") or, should the NICB not accept the contribution for some reason, to such other organization that may aid in the prevention of insurance fraud.
Accordingly, we recommend that Petitioner Patrick Clark McClurkin be reinstated to the practice of law subject to the following conditions:
Petitioner shall make payment of $40,000 to the National Insurance Crime Bureau, or other similar organization acceptable to the Administrator;
Attorney James Hardemon shall be appointed as Petitioner's mentor for a period of two years, during which time:
Petitioner shall report to Mr. Hardemon at least once a week concerning Petitioner's practice of law;
Mr. Hardemon shall report in writing to the Administrator at least once every three months concerning Petitioner's practice of law;
Petitioner and Mr. Hardemon shall report to the Administrator any violation of the Illinois Rules of Professional Conduct which the Petitioner engaged in during the mentoring period;
If Mr. Hardemon is unable to fulfill his role as mentor, Petitioner shall immediately inform the Administrator and the Administrator shall appoint a successor mentor.
Date Entered: January 10, 2008
|John B. Whiton, Chair, with Eric A. Reeves, and Roberta Parks, concurring.|
1 Petitioner stipulated that if called to testify, Cory J. Cirelli, Disciplinary Counsel for the Disciplinary Board of the Supreme Court of Pennsylvania, would testify that Petitioner was required to report his conviction to the Pennsylvania disciplinary board despite having been transferred to inactive status by the Supreme Court of Pennsylvania.
2 There may be some concern with the fact that Petitioner's father was the source of the funds deposited into the trust account, especially when the evidence revealed that Petitioner had his own investments which could have been used, at least in part, to make the deposit. Because Petitioner stated that the money was not a gift but rather an advance on his inheritance, we assume he was entitled to the funds and could use them for any purpose of his choosing. The same reasoning should apply if the petitioner's father had decided to make a gift to the Petitioner.
3 In his closing argument, counsel for the Administrator acknowledged that while the businesses to which restitution is owed are real and known entities, "in most cases [they] may be nonexistent, they may be corporations that were folded into other corporations, or they simply went out of business." (Tr. 297).
4 These circumstances distinguish this case from In re Minneman, 06 RT 3005 (Hrg Bd., August 28, 2007) wherein a hearing panel faulted an Illinois attorney for failing to notify Kansas disciplinary authorities of his criminal conviction. While that attorney did not practice in Kansas, he had been raised in that state, and maintained his active status and paid his annual licensing fee up until the year he was convicted of income tax fraud.
5 We note that Petitioner's completion of classes in 2006 satisfied the Minimum Continuing Legal Education requirement for that year, the first year such requirement was in effect for Illinois attorneys.