Filed February 1, 2013

In re Gary Evan Peel
Attorney-Respondent

Commission No. 07 SH 117

Synopsis of Hearing Board Report and Recommendation
(February 2013)

This matter arises out of the Respondent's conduct that resulted in his conviction in federal court for the offenses of bankruptcy fraud and two counts of possession of child pornography. The Hearing Board found that the Respondent committed criminal acts that reflected adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, and engaged in conduct prejudicial to the administration of justice.

The Hearing Board recommended that the Respondent be disbarred.

BEFORE THE HEARING BOARD
OF THE
ILLINOIS ATTORNEY REGISTRATION
AND
DISCIPLINARY COMMISSION

In the Matter of:

GARY EVAN PEEL,

Attorney-Respondent,

No. 2166259

Commission No. 07 SH 117

REPORT AND RECOMMENDATION OF THE HEARING BOARD

INTRODUCTION

The hearing in this matter was held on June 20, 2012, at the Springfield offices of the Attorney Registration and Disciplinary Commission, before a Panel of the Hearing Board consisting of Leo H. Konzen, Chair, Robert P. Marcus, and Richard Corkery. Denise L. Church appeared on behalf of the Administrator. The Respondent appeared at the hearing telephonically and pro se.

PLEADINGS

Amended Complaint

The Administrator filed a Complaint against the Respondent on November 20, 2007. An Amended Complaint was filed on April 23, 2012. The Amended Complaint generally alleges the following.

In 1974, the Respondent took sexually explicit photographs of the 16-year old sister (D.R.) of his then-wife Debra Peel. In November 2003, the Respondent and Debra obtained judgment of dissolution of their marriage, which included a division of property. In July 2005, the Respondent filed for bankruptcy in the United States District Court for the Southern District

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of Illinois (Case No. 05-33238). In the bankruptcy case, the Respondent sought to discharge certain obligations to Debra under their judgment of dissolution of their marriage, and listed Debra as a creditor. Debra filed an objection thereto. In January 2006, the Respondent told Debra of his sexual relationship with D.R. and of the sexually explicit photographs he had taken of D.R. He further told Debra that, if she did not abandon her objection in his bankruptcy case and agree to a new financial settlement in their dissolution case, he would mail the photographs of D.R. to Debra's parents. Later in 2006, the Federal Bureau of Investigation retrieved the photographs of D.R from the Respondent's office.

An indictment in the United States District Court for the Southern District of Illinois charged the Respondent with the offenses of (1) bankruptcy fraud, (2) obstruction of justice, (3) possession of child pornography on about January 20, 2006, and (4) possession of child pornography on about January 31, 2006. On March 23, 2007, a jury found the Respondent guilty of all four offenses.

On February 12, 2010, the United States Court of Appeals for the Seventh Circuit remanded the Respondent's case to the District Court with directions to vacate either the conviction for bankruptcy fraud or for obstruction of justice. On August 1, 2011, the District Court vacated the conviction for obstructing justice and resentenced the Respondent to a total term of 144 months imprisonment, followed by a 3 year term of supervised release.

The Amended Complaint further alleged that, based upon the above, the Respondent engaged in the following misconduct: (a) committed a criminal act that reflects adversely on his honesty, trustworthiness, or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional conduct (1990); (b) engaged in conduct prejudicial to the administration of justice, in violation of Rule 8.4(a)(5); and engaged in conduct which tends to

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defeat the administration of justice or to bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770.

Answer to Amended Complaint

On May 18, 2012, the Respondent filed his Answer to Amended Complaint, in which he admitted some factual allegations and denied other. He admitted that he was convicted of the offenses as alleged in the Amended Complaint. However, he denied all of the allegations of misconduct. The Respondent also raised two "Affirmative Matters/Defenses." First, he contended that his disciplinary matter should have been delayed, under Supreme Court Rule 761(d)(2), because the "appellate process" in regard to his conviction has not been completed, in that he has filed a collateral attack on his federal conviction, pursuant to 28 USC sec. 2255, and that proceeding was still pending. Second, he contended that his due process rights are being violated because, if he is disbarred based on his federal convictions, he would have to wait five years to petition for reconsideration even if the federal conviction upon which the disbarment was based is later set aside.

EVIDENCE

Administrator's Exhibits 1 through 10 were admitted into evidence without objections. (Tr. 6-7). Respondent's Exhibits 5, 6, 7, 10, and 11 were admitted into evidence without objections. (Tr. 8). No testimony was presented at the hearing.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

In attorney disciplinary proceedings, the Administrator has the burden of proving the charges of misconduct by clear and convincing evidence. See Supreme Court Rule 753(c)(6); In re Thomas, 2012 IL 113035, par. 56. This standard of proof requires a high level of certainty, which is greater than a preponderance of the evidence (i.e., more probably true than not true) but not as

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great as proof beyond a reasonable doubt. Bazydlo v. Volant, 164 Ill. 2d 207, 213, 647 N.E.2d 273 (1995); In re Kakac 07 SH 86, M.R. 23785 (May 18, 2010) (Review Bd. at 9). In determining whether the burden of proof has been satisfied, the Hearing Panel is to assess the credibility and believability of the witnesses, weigh conflicting testimony, draw reasonable inferences from the evidence, and make factual findings based upon all of the evidence. In re Howard, 188 Ill. 2d 423, 435, 721 N.E.2d 1126 (1999); In re Timpone, 208 Ill. 2d 371, 380, 804 N.E.2d 560 (2004).

Background Facts

On March 23, 2007, the Respondent was convicted by a jury in the United States District Court for the Southern District of Illinois and judgment was ultimately entered on three counts (Counts 1, 3, and 4) of an indictment. The convictions and sentences on those counts were affirmed by the United States Court of Appeals for the Seventh Circuit on February 6, 2012. The offenses for which he was convicted were bankruptcy fraud (Count 1) and two counts of possession of child pornography (Counts 3 and 4). He was also found guilty on another count, but the conviction on that count was subsequently vacated. The Respondent was sentenced to a total term of 144 months imprisonment, followed by a 3-year term of supervised release. (Adm. Exs. 1 through 6).

  1. Respondent is charged with committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional Conduct (1990).
  1. Evidence Considered

On March 22, 2006, an indictment was filed in the United States District Court for the Southern District of Illinois (Adm. Ex. 1) charging the Respondent with the offenses of bankruptcy fraud (Count 1); obstruction of justice (Count 2); possession of child pornography on

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about January 20, 2006 (Count 3); and possession of child pornography on about January 31, 2006 (Count 4).

The following factual allegations were applicable to each count of the indictment:

  1. In 1974, Gary Peel took sexually explicit photographs of his then-wife's 16-year old sister, D.R. Gary Peel retained these pictures until 2006;

  2. In November 2003, Gary Peel and his wife divorced and a state court settlement was entered in which Gary Peel was required to meet certain financial obligations to his ex-wife;

  3. In July of 2005, Gary Peel filed for bankruptcy in the United States Bankruptcy Court, Southern District of Illinois (East St. Louis), Bankruptcy Petition #: 05-33238. In the Bankruptcy action, Gary Peel sought discharge of financial obligations to his ex-wife, whom he listed as a creditor. Gary Peel's ex-wife opposed the discharge. Both Gary Peel and his ex-wife were represented by respective counsel in the bankruptcy action. The bankruptcy action was brought under title 11 of the United States Code;

  4. On January 20, 2006, Gary Peel telephoned his ex-wife and informed her that he had a sexual relationship with his ex-wife's sister, D.R., during the marriage. Gary Peel further informed his ex-wife that he had taken pictures of D.R that he referred to as "sexually explicit." Gary Peel informed his ex-wife that if she did not abandon the bankruptcy challenge, cease in her attempts to depose Gary Peel's current wife, and agree to a new financial settlement, he would mail the pictures of D.R to his ex-wife's parents;

  5. On January 20, 2006, Gary Peel's ex-wife retrieved from her mailbox a one-sheet color copy of four, color photographs. Such photographs depicted D.R. naked and in various poses, including a lascivious display of the genitals and pubic area of D.R.;

  6. In cooperation with law enforcement, Gary Peel's ex-wife placed telephone calls to Gary Peel. In said telephone calls and in cooperation with law enforcement, Gary Peel's ex-wife appeared to succumb to Gary Peel's demand to forego the bankruptcy challenge and to consider a new settlement. In said telephone calls Gary Peel's ex-wife repeatedly told Gary Peel that she would not be discussing a settlement with Gary Peel if it were not for the photographs of her sister and Gary Peel's threats to mail the photographs to her parents. In said telephone calls, Gary Peel's ex-wife told Gary Peel that she did not want her attorneys to see the pictures. Gary Peel counseled his ex-wife that if the existence of the pictures were disclosed to her attorneys that they would request copies, that there would be court orders for production and that "it begins to get more visible."

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  1. In cooperation with law enforcement, Gary Peel's ex-wife told Gary Peel that she wanted assurances that the originals would be turned over to her if she signed a new settlement agreement. Gary Peel agreed to meet his ex-wife on January 31, 2006, and at such meeting did show his ex-wife original photographs of D.R. Such photographs were then placed in a sealed envelope and Gary Peel and his ex-wife signed across the sealed portion. Gary Peel explained that he would provide his ex-wife with the envelope containing the photographs after his ex-wife signed a new settlement agreement. At the conclusion of the meeting, agents of the Federal Bureau of Investigation retrieved the envelope and the original photographs from the person of Gary Peel. Such photographs depicted D.R. naked and in various poses, including a lascivious display of the genitals and pubic area of D.R.;

  2. On January 31, 2006, agents of the Federal Bureau of Investigation retrieved from the wastebasket in Gary Peel's office at his place of employment, two additional one-page color copies of color photographs of D.R. Each of the two copies contained the same four pictures of D.R. as contained in the color copy that Gary Peel had placed in his ex-wife's mailbox. These two copies had been torn into a number of pieces.

  3. On January 31, 2006, agents of the Federal Bureau of Investigation retrieved a Hewlett Packard multi-function, color printer/copier from the residence of Gary Peel. Agents of the Federal Bureau of Investigation learned that his Hewlett Packard printer was manufactured outside of the State of Illinois. Agents of the Federal Bureau of Investigation learned that the paper copies of the photographs of D.R. were produced on paper that was manufactured outside of the State of Illinois. Agents of the Federal Bureau of Investigation learned that the original photographs of D.R. were produced on materials that had been manufactured outside of the State of Illinois.

Based upon the above factual allegations, Count 1 charged the offense of bankruptcy fraud, in that between about January 20, 2006, and about January 31, 2006, Gary Peel "did knowingly and fraudulently give, offer, receive, and attempt to obtain money and property, remuneration, compensation, reward, advantage, and promise thereof for acting and forbearing to act in a case"

Based upon the above factual allegations, Count 3 charged the offense of possession of child pornography, in that on or about January 20, 2006, Gary Peel "did knowingly possess material that contains an image of child pornography that was produced using materials that have

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been mailed and shipped and transported in interstate and foreign commerce, namely a color paper copy containing images of D.R. that was placed in the mailbox of Gary Peel's ex-wife."

Based upon the above factual allegations, Count 4 charged the offense of possession of child Pornography, in that on or about January 31, 2006, Gary Peel "did knowingly possess material that contains an image of child pornography that was produced using materials that have been mailed and shipped and transported in interstate and foreign commerce, namely a color photograph of D.R. that was located on the person of Gary Peel."

The Respondent was convicted of the offenses charged in Counts 1, 3 and 4. He was also convicted of obstruction of justice as charged in Count 2. On February 12, 2010, the United States Court of Appeals for the Seventh Circuit remanded the case for the District Court to vacate either the bankruptcy fraud conviction (Count 1) or the obstruction of justice conviction (Count 2). (Adm. Ex. 2 at 9). On August 1, 2011, the District Court vacated the obstruction of justice conviction (Adm. Ex. 3 at 4-5), and sentenced the Respondent to a total term of 144 months imprisonment, followed by 3-year term of supervised release. (Adm. Ex. 4). On February 6, 2012, the United States Court of Appeals for the Seventh Circuit issued an opinion affirming the Respondent's convictions on Counts 1, 3 and 4, and affirming the sentence. (Adm. Ex. 5). A petition for certiorari was denied by the Supreme Court of the United States on January 18, 2011. (Resp. Ex. 10 at 2).

  1. Analysis and Conclusions

The misconduct charged in this case is based upon the conviction of the Respondent in federal court for committing criminal offenses. It is well established that proof of a criminal conviction is conclusive evidence of the attorney's guilt of the crime. See Supreme Court Rule 761 (f)); In re Williams, 111 Ill. 2d 105, 115, 488 N.E.2d 1017 (1986); In re Minneman, 98 SH

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38, M.R. 17352 (Mar. 22, 2001) (Review Bd. at 4). Thus, a respondent is not allowed to impeach or challenge the factual allegations of the charge or charges for which he or she was convicted, or to relitigate the issue of guilt. However, a respondent in a disciplinary proceeding is permitted to testify and present other evidence regarding the overall circumstances of his or her conduct for the purposes of showing mitigation. See In re Ciardelli, 118 Ill. 2d 233, 239-40, 514 N.E.2d 1006 (1987); Williams, 111 Ill. 2d at 113-115. In this case, however, the Respondent did not testify or otherwise present evidence as to any extenuating circumstances for his conduct.

We find that the crime of bankruptcy fraud, for which the Respondent was convicted, is clearly a crime involving moral turpitude. Moral turpitude includes "anything done knowingly contrary to justice, honesty, or good morals" or that involves "fraud or fraudulent conduct." In re Needham, 364 Ill. 65, 70, 4 N.E.2d 19 (1936); In re Vavrik, 117 Ill. 2d 408, 413, 512 N.E.2d 1226 (1987); In re Hook, 98 CH 50, M.R. 21025 (Sept. 21, 2006) (Review Bd. at 5); Minneman, 98 SH 38 (Hearing Bd. at 9-10). The Respondent filed a bankruptcy petition in which he sought to discharge his financial obligation to his ex-wife, under a marital settlement agreement. His ex-wife opposed the discharge. Rather than allow the dispute with his ex-wife to be resolved in the Bankruptcy Court, the Respondent attempted to blackmail his ex-wife into abandoning her challenge and into agreeing to a modified marital settlement by threatening to send sexually explicit photographs of his ex-wife's then 16-year old sister to his ex-wife's parents. The District Court Judge, in imposing sentence, pointed out that the Respondent "clearly intended to obstruct justice by filing the bankruptcy" and "intended by his actions to obstruct justice in state court divorce proceedings." The District Court Judge also stated that the Respondent "sought by using those photographs to gain financially by not having to pay his former wife in accordance with the marital settlement agreement." (Adm. Ex. 3 at 12-13). The Court of Appeals, in its February 6,

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2011 opinion, stated that the Respondent "tried to blackmail [his ex-wife] with nude photographs of her sister, many of which he had retained. He hoped by doing so to induce her to agree to a modification of the marital agreement that would have reduced his long-term obligations to her by some three-quarters of a million dollars." (Adm. Ex. 5 at 5). Clearly, the Respondent attempted to obtain a financial benefit, at his ex-wife's expense, by the use of threats and child pornography. Additionally, by finding the Respondent guilty of bankruptcy fraud, the jury had to have found that the Respondent acted "knowingly and fraudulently," as charged in Count 1 of the indictment. (Adm. Ex.1 at 4).

We also believe that the crime of possession of child pornography, for which the Respondent was also convicted, involves moral turpitude. In In re Plachta, 2011PR00127, M.R. 25260 (May 18, 2012), the attorney was suspended on an interim basis, under Supreme Court Rule 761, following his guilty plea for two counts of possession of child pornography. (Administrator's Statement of Charges at 2). Rule 761 (b) provides for an interim suspension when an attorney "is convicted of a crime involving fraud or moral turpitude." See also In re Schaeffer, 00 RC 1501, M.R. 16529 (Mar. 22, 2000) (Court allowed Petition for Reciprocal Discipline, in which the crime of possessing visual depictions of minors engaging in sexually explicit conduct was described as a crime involving moral turpitude).

The Respondent clearly acted contrary to justice, honesty, and good morals by having in his possession sexually explicit photographs of his ex-wife's 16-year old sister, as charged in Counts 3 and 4 of the indictment. (Adm. Exs. 4, 5). He then threatened to use those photographs to induce his ex-wife to abandon her bankruptcy challenge and agree to a modification of the marital settlement agreement.

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An attorney who is convicted of a crime involving moral turpitude, has committed a criminal act that is in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional conduct (1990), and that warrants discipline. See In re Bell, 147 Ill. 2d 15, 38, 588 N.E.2d 1093 (1992); Ciardelli, 118 Ill. 2d at 239; Williams, 111 Ill. 2d at 113.

Even if possession of child pornography is not a crime involving moral turpitude, it is still a crime that reflects adversely on the Respondent's honesty, trustworthiness, or fitness as a lawyer in other respects, and he may be disciplined for such conduct. The Supreme Court has made it clear that "[i]f an attorney is convicted of a crime that does not involve moral turpitude, he still may be disciplined." In re Scarnavack, 108 Ill. 2d 456, 460, 485 N.E.2d 1 (1985); In re Lunardi, 127 Ill. 2d 413, 421, 537 N.E.2d 767 (1989). See also Rule 761 (c).

Attorneys who have possessed or attempted to possess child pornography have been found to have committed a criminal act that reflects adversely on their honesty, trustworthiness, or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional conduct (1990), and have been disciplined. In Plachta, 2011PR00127 the respondent was allowed to strike his name from the rolls pursuant to Rule 762(a). He pled guilty to three counts of possession of child pornography and, as a result, violated Rule 8.4(a)(3). In In re Mateas, 00 CH 81, M.R. 18636 (Mar. 19, 2003), the respondent was charged with two counts of possession of child pornography, and subsequently entered a guilty plea to the amended charge of attempt possession of child pornography. The respondent was found to have violated Rule 8.4(a)(3). In Schaeffer, 00 RC 1501, the respondent violated Rule 8.4(a)(3) by "possessing visual depictions of minors engaging in sexually explicit conduct," and was disbarred.

Accordingly, we find that the Administrator proved by clear and convincing evidence that the Respondent engaged in misconduct by committing a criminal act that reflects adversely

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on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional Conduct (1990).

  1. Respondent is charged with engaging in conduct that is prejudicial to the Administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990).
  1. Evidence Considered

We considered the same evidence as discussed in Section I, above

  1. Analysis and Conclusions

In Scarnavack, 108 Ill. 2d at 460-61 the attorney was convicted of the criminal offense of unlawfully possessing 0.46 grams of cocaine, which had a street value of approximately $35 to $40. He was found to have engaged in misconduct, including conduct that is prejudicial to the administration of justice. (108 Ill. 2d at 457, 459). The Supreme Court stated:

Every lawyer owes a solemn duty to encourage respect for the law. We believe obedience to the law exemplifies respect for it. The respondent's conduct does not evidence such respect. An attorney is held to a higher standard of conduct, particularly with respect to upholding the law, so that a conviction for such a criminal offense as in the present case [possession of 0.46 grams of cocaine] requires disciplinary action in order to protect the public, the courts, and the legal profession.

Id.

Attorneys who committed criminal acts have been found to have engaged in conduct prejudicial to the administration of justice. In the following cases, the attorneys were convicted of the crimes stated and were found to have engaged in conduct prejudicial to the administration of justice: Plachta, 2011PR00127 (three counts of possession of child pornography); In re Addison, 07 CH 39, M.R. 24108 (Nov. 12, 2010) (reckless endangerment and public sexual gratification); In re Luce, 09 CH 31, M.R. 24074 (Sept. 22, 2010) (obstruction of justice for falsely advising the United States Securities and Exchange Commission that his client would not voluntarily appear); In re Robertson, 09 CH 61, M.R. 23933 (Sept. 20, 2010) (domestic battery);

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In re Lohmar, 09 CH 86, M.R. 23675 (Mar. 16, 2010) (DUI on two occasions); In re Grodner, 08 CH 55, M.R. 23223 (Sept. 22, 2009) (criminal damage to property); Hook, 98 CH 50 (wire fraud, theft and money laundering); Mateas, 00 CH 81 (attempted possession of child pornography); In re Lutz, 01 CH 40, M.R. 17955 (Mar. 22, 2002) (resisting arrest); Minneman. 98 SH 38 (conspiracy to commit income tax fraud); In re Jorgensen, 99 CH 109, M.R. 16996 (Nov. 22, 2000) (battery); In re Sorokas, 98 CH 85, M.R. 16071 (Sept. 29, 1999) (misdemeanor battery and misdemeanor telephone harassment); and In re Reed, 97 CH 54, M.R. 14844 (May 27, 1998) (aggravated battery).

Furthermore, an attorney's misconduct is prejudicial to the administration of justice when it has an adverse impact on a judicial proceeding, such as by causing "additional and otherwise needless motions to be filed, court proceedings, court orders, and appearances by other counsel and parties." In re Verett, 07 SH 105, M.R. 22567 (Sept. 17, 2008) (Hearing Bd. at 34). See also In re Milks, 05 CH 64, M.R. 23085 (Sept. 22, 2009) (Review Bd. at 10); In re Sutherin, 03 CH 61, M.R. 20636 (Sept. 20,2006) (Review Bd. at 5-6). For example, in In re Moll, 01 CH 46, M.R. 20918 (Sept. 20, 2006), the attorney's misconduct was prejudicial to the administration of justice where "other attorneys involved in the class action, the court, and the third party claims administrator endured additional inconvenience and work" as a result. Moll, 01 CH 46 (Review Bd. at 10-11; Hearing Bd. at 34-35).

In the case before us, the Respondent's misconduct arose during his bankruptcy proceeding. As set out in the federal indictment (Adm. Ex. 1), the Respondent listed his ex-wife as a creditor and sought discharge of his financial obligation to her under a marital settlement agreement. His ex-wife, as a creditor, opposed the discharge. The Respondent then attempted to blackmail his ex-wife/creditor. He threatened to deliver to his ex-wife's parents "sexually

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explicit" photographs of the ex-wife's then 16-year old sister, if "she did not abandon the bankruptcy challenge." He placed a copy of the photographs in his ex-wife's mailbox. As a result of the Respondent's blackmail attempt, his ex-wife found it necessary to contact law enforcement officials. In cooperation with law enforcement officials, she had telephone conversations and met with the Respondent until the time of his arrest.

Thus, the Respondent's misconduct was directly related to his bankruptcy proceeding, which was pending before the Bankruptcy Court, and he knowingly acted to cause financial harm to a named creditor. The Respondent's misconduct caused the named creditor to spend her time, and endure the additional inconvenience of, working with law enforcement officials to prevent the Respondent's scheme from succeeding. His blackmail attempt was prejudicial to the administration of justice despite the fact that it ultimately failed.

In Thomas, 2012 IL 113035, the respondent was the president and sole shareholder of Thomas Consolidated Industries (TCI). TCI purchased a certain shop from a couple named Herbst. TCI then filed for bankruptcy, and respondent, while representing the bankruptcy trustee, filed an adversary proceeding against the Herbst and others, alleging breach of contract. The bankruptcy court dismissed TCI's lawsuit against the Herbst and others, and the bankruptcy trustee filed a notice of appeal. The United States District Court affirmed the dismissal. The bankruptcy trustee then abandoned the adversary claim. However, TCI, the underlying debtor, took over the action, and the respondent filed a notice of appeal with the Court of Appeals for the Seventh Circuit. Respondent did not file an appearance as TCI's attorney. At that time, he was suspended from the practice of law in Illinois and in the Northern District of Illinois. Respondent then filed two motions for extensions of time with the Court of Appeals. In the first motion he said he had been "working on the brief" and "would continue to do so." In the second motion,

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he said he had been "diligently working on the brief." The Court of Appeals issued an order stating that TCI, a corporation, "must appear by counsel or not at all." Thereafter, the respondent retained counsel to finish the appeal. The Administrator filed a disciplinary complaint against the respondent, charging, among other things, that his unauthorized practice of law before the Court of Appeals was prejudicial to the administration of justice, in violation of Rule 8.4 (a)(5). Thomas, 2012 IL 113035 pars. 7, 15-18.

The Supreme Court held that the respondent's unauthorized practice of law before the Court of Appeals was prejudicial to the administration of justice. The Court explained that the "respondent's failed attempt to represent TCI potentially harmed not only his own interests, but also the interests of TCI's creditors. As such, his misconduct was prejudicial to the administration of justice." Id. at par. 91). Similarly in this case, the Respondent's Bankruptcy Fraud, which consisted of a failed attempt to blackmail a creditor, was prejudicial to the administration of justice

Accordingly, we find that the Administrator proved by clear and convincing evidence that the Respondent engaged in conduct that is prejudicial to the Administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990).

  1. Respondent is charged with engaging in conduct which tends to defeat the administration of justice or which brings the courts or the legal profession into disrepute, in violation of Supreme Court 770

In Thomas, 2012 IL 113035, par. 92, the Supreme Court held that the respondent did not "violate" Supreme Court Rule 770, as charged in the disciplinary complaint. The Court stated that Supreme Court Rule 770 is not itself a Rule of Professional Conduct and "one does not ?violate' Rule 770." See also In re Stahnke, 08 CH 101, M.R. 25590 (Nov. 19, 2012) (Review Bd. at 10); Milks, 09 CH 30 (Review Bd. at 12).

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Accordingly, we find, based upon the holding in Thomas, that the Respondent did not "violate" Supreme Court Rule 770, as charged in paragraph 5(c) of the Amended Complaint.

AFFIRMATIVE DEFENSES

The Respondent has raised two affirmative defenses in his Answer to Amended Complaint. The Respondent filed a Memorandum in Support of Affirmative Matters/Defenses; the Administrator filed a Response to Respondent's Affirmative Defense; and the Respondent filed a Reply thereto. Argument on the issues was also presented at the hearing. (Tr. 11-15, 18-19).

  1. Respondent contends that his disciplinary hearing should have been delayed, pursuant to Supreme Court Rule 761 (d) (2), because he filed a Motion under 28 U.S.C. sec. 2255 to Vacate, Set, Aside, or Correct Sentence, and the motion was still pending at the time of the hearing.
  1. Evidence Considered

Following his conviction in the United States District Court, for the offenses of bankruptcy fraud, obstruction of justice, and two counts of possession of child pornography, the Respondent filed an appeal. On February 12, 2010, the United States Court of Appeals for the Seventh Circuit remanded the case for the District Court to vacate either the bankruptcy fraud conviction or the obstruction of justice conviction, and for resentencing. (Adm. Ex. 2). On August 1, 2011, the District Court vacated the obstruction of justice conviction and resentenced the Respondent. (Adm. Exs. 3 and 4). On February 6, 2012, the Court of Appeals affirmed the convictions and sentences. (Adm. Ex. 5). The Respondent filed a petition for certiorari with the Supreme Court of the United States, and the petition was denied on January 18, 2011. (Resp. Ex. 10 at 2).

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  1. Analysis and Conclusion

A motion under 28 U.S.C. sec. 2255 is not an appeal from a judgment in a criminal case, but rather is a collateral proceeding attacking the sentence imposed. See United States v. Addonizio, 442 U.S. 178, 184 (1979); Bousely v. United States, 523 U.S. 614, 619 (1998). The Respondent admitted in his Answer to Amended Complaint (at 3) and in his Memorandum in Support of Affirmative Matters/Defenses (at 4), that his motion pursuant to 28 U.S.C sec. 2255 is a "collateral attack."

Additionally, language in 28 U.S.C. sec. 2255 (Resp. Ex. 5) makes it clear that it is a collateral attack on a criminal sentence. The express language in the first paragraph, subsection (a), sets out grounds upon which a prisoner may file a motion pursuant to Section 2255, "to vacate, set aside or correct sentence." and then adds "or is otherwise subject to collateral attack." (emphasis added). The use of the word "otherwise" makes it clear that a motion under the Section, on any ground set forth, is a collateral attack.

It is clear to us that Supreme Court Rule 761(d)(2) is not applicable to the Respondent's collateral attack on his sentence. The plain language of the rule states, "if the attorney has appealed from the conviction, the [disciplinary] hearing shall be delayed until completion of the appellate process unless the attorney requests otherwise." The Respondent did appeal from his convictions, the appellate process was completed, and his convictions were affirmed.

In Williams v. United States, 365 F.2d 21 (7th Cir. 1966), the petitioner was convicted of narcotics violations in federal court. After his conviction was affirmed on direct appeal, he filed a motion pursuant to 28 US.C. sec. 2255. The Court of Appeals found that one of his contentions in the Section 2255 proceeding "essentially presents a challenge to the sufficiency of the proof in this case." The Court of Appeals then stated:

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A collateral proceeding to attack the validity of a judgment of conviction brought under Section 2255 of Title 28 U.S.C.S does not lie as a substitute for a direct appeal to test the sufficiency of the evidence . . . Nor may this proceeding be utilized for resubmitting the question of the sufficiency of proof to this court which had already decided it adversely to petitioner on direct appeal.Williams, 365 F.2d at 23.

As discussed above, the misconduct charged in this case is based upon the Respondent's conviction in federal court, which is conclusive evidence of his guilt, and his conviction was affirmed on direct appeal. Consequently, as in Williams, the sufficiency of the proof has been decided adversely to the Respondent. Consequently, no further delay is required under Rule 761 (d) (2).

A similar issue was decided in In re Thomas, 00 CH 18, M.R. 20289 (Sept. 26, 2005). The disciplinary charges in Thomas were based in part on the respondent's convictions for two felony traffic offenses. The Hearing Board Chair initially granted the respondent's request for a stay, under Rule 761(d)(2), because the respondent was challenging the convictions in a federal habeas corpus petition. Later, the Chair lifted the stay and the hearing was held. Prior to the hearing, the respondent filed a motion for supervisory order with the Supreme Court, claiming that the Hearing Board had no jurisdiction to hold the hearing. The Supreme Court denied the motion. (Review Bd. at 1-2). The respondent argued before the Review Board that his habeas corpus petition was part of the "appellate process" pursuant to Rule 761(d)(2), and that the hearing should have been delayed until there was a final ruling on the habeas corpus petition. The Review Board pointed out that a habeas corpus petition is a collateral attack on a conviction, and "the habeas corpus petition filed by respondent is not part of ?the appellate process' within the meaning of Rule 761(d)(2)." Thus, the Review Board determined that the Hearing Board did

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not err in allowing the disciplinary proceedings to progress while the habeas corpus petition was pending. (Review Bd. at 5-7). Based upon the conclusion of the Review Board and upon the Supreme Court's denial of the respondent's motion to stay the hearing in Thomas, a pending collateral attack on a conviction or sentence is not part of the "appellate process" within the meaning of Rule 761(d)(2).

Accordingly, we conclude that the disciplinary hearing was properly held in this matter.

  1. Respondent contends that his due process rights are violated because, if he is disbarred, he could not petition for reconsideration for five years even if the conviction upon which the disbarment is based is later set aside.
  1. Evidence Considered

We considered the same evidence as discussed in Section I, above.

  1. Analysis and Conclusion

The Respondent's contention is entirely speculative, and we find no factual or legal basis for it. It is beyond dispute that the Supreme Court of Illinois has supervisory authority. We find it impossible to believe that, if an attorney were to be disbarred based upon a conviction that is subsequently vacated, the Supreme Court would refuse a request to reconsider the finding of misconduct and the discipline imposed.

The Administrator has cited the case of In re Stidham, 04 RC 1505, M.R. 19436 (Mar. 18, 2005), in which the Supreme Court did vacate its previous order imposing discipline. On September 24, 2004, the Supreme Court allowed the Administrator's petition to impose reciprocal discipline, and ordered Stidham suspended for six months and until she was reinstated in the State of Texas. Subsequently, the Texas disciplinary order was vacated. The Administrator then filed a motion to vacate the reciprocal discipline, pending final discipline in Texas. The Supreme Court allowed the Administrator's motion to vacate on March 18, 2005. We have no

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reason to doubt that there would be a similar result in a case where the basis for discipline was a conviction that was subsequently vacated.

Accordingly, we find no basis for believing that the Respondent's due process rights have or will be violated, and conclude that the disciplinary hearing was properly held in this matter.

EVIDENCE OFFERED IN AGGRAVATION AND MITIGATION

The Administrator stipulated that the Respondent has no prior discipline. (Tr. 10). The Respondent was licensed to practice law in Illinois from November 14, 1968, until he was suspended on an interim basis, pursuant to Supreme Court Rule 761 (c), on January 11, 2008. (Tr. 15). The Respondent did not testify or present any other evidence in mitigation.

RECOMMENDATION

The purpose of the attorney disciplinary system is "to protect the public, maintain the integrity of the legal profession, and protect the administration of justice from reproach." In re Winthrop, 219 Ill. 2d 526, 559, 848 N.E.2d 961 (2006). In determining the appropriate sanction, we must consider the nature and seriousness of the misconduct, and any aggravating and mitigating circumstances shown by the evidence. In re Gorecki, 208 Ill. 2d 350, 360-61, 802 N.E.2d 1194 (2003). In addition, we may consider the deterrent value of the sanction, the "need to impress upon others the seriousness of the misconduct at issue," and whether the sanction will "help preserve public confidence in the legal profession." In re Twohey, 191 Ill. 2d 75, 85, 727 N.E.2d 1028 (2000); Gorecki, 208 Ill. 2d at 361. Although each disciplinary case "is unique and must be resolved in light of its own facts and circumstances," the sanction imposed should be "consistent with those imposed in other cases involving comparable misconduct." In re Howard, 188 Ill. 2d 423, 440, 721 N.E.2d 1126 (1999); In re Chandler, 161 Ill. 2d 459, 472, 641 N.E.2d 473 (1994).

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The Administrator requested a sanction of disbarment. The Respondent did not comment about a sanction.

The misconduct of the Respondent involved moral turpitude and was most egregious and disgusting. He knowingly engaged in fraud during his own bankruptcy proceeding and knowingly possessed child pornography. The child pornography consisted of sexually explicit photographs of the Respondent's then 16-year old sister-in-law. The Respondent took those photographs in 1974 and retained them until they were seized by law enforcement officials in 2006. Moreover, the Respondent threatened to deliver the child pornography to the parents of his ex-wife and former sister-in-law unless his ex-wife abandoned her challenge, as a named creditor, in his bankruptcy case and agreed to a new financial settlement to benefit Respondent in their Illinois dissolution of marriage case.

We first note that it is well established that an attorney's conviction of a crime involving moral turpitude is a ground for disbarment. See In re Vavrik, 117 Ill. 2d 408, 412, 507 N.E.2d 1226 (1987); In re Fumo, 52 Ill. 2d 307, 309, 288 N.E.2d 9 (1972); In re Needham, 364 Ill. 65, 69, 4 N.E.2d 19 (1936).

The only mitigation in this case is the Respondent's lack of prior discipline. In aggravation, the Respondent's misconduct was "not a quick and unreasoned failure of judgment," but was a calculated plan, consisting of a series of acts, to cause significant financial harm to his ex-wife through blackmail. Also, the Respondent did not voluntarily stop his blackmail attempt, but it ceased only when he was arrested by federal officers and the child pornography was seized from him. Additionally, he showed no remorse whatsoever. See In re Hook, 98 CH 50, M.R. 21025 (Sept. 21, 2006) (Review Bd. at 10); In re Minneman, 98 SH 38, M.R. 17352 (Mar. 22, 2001) (Review Bd. at 7; Hearing Bd. at 20).

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We found the cases discussed below to be instructive as to the appropriate discipline in the cases before us.

In In re Fumo, 52 Ill. 2d 307, 288 N.E.2d 9 (1972); the disciplinary charges were based on the attorney's guilty plea to a multi-count indictment in federal court arising out of a scheme with a physician "to defraud and obtain money under false pretenses from certain insurance companies and from his own clients." Fumo, 52 Ill. 2d at 308. In mitigation the attorney presented evidence that he served the 60-day jail sentence imposed as part of a three-year term of probation, paid the fine, made full restitution to the insurance companies and to clients as ordered by the federal court. He also presented witnesses who testified about his good reputation for honesty and integrity and that he was an upstanding member of the community. Additionally, there was evidence that the attorney's son had a serious illness and the "efforts to cure the affliction had created an extraordinary financial burden upon him." Id. at 309). The Court pointed out that the attorney engaged in "a deliberate, calculated series of individual acts, over an extended period of time, all designed to extract funds from insurance companies, as well as from his own clients." Such misconduct showed "a lack of fidelity to private trust, tends to defeat the administration of justice and to bring the legal profession into disrepute." The attorney was disbarred. Id. at 310-11.

In Vavrik, 117 Ill. 2d 408, the attorney was convicted of one count of grand theft in Florida. He was sentenced to an 8-year term of probation and ordered to pay restitution. The offense arose out of his embezzling funds while operating a trucking company. The Supreme Court pointed out that the attorney's crime involved moral turpitude. He presented evidence in mitigation that he had no prior discipline, he was making restitution, he was involved in church activities, and he "was suffering from the strains of a recent divorce and bankruptcy at the time

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of his misconduct." The Court said "we cannot say that sufficient evidence in mitigation has been offered to mitigate the seriousness of his misconduct." Vavrik, at 414-15). The attorney was disbarred.

In In re Ciardelli, 118 Ill. 2d 233, 514 N.E.2d 1006 (1987), the attorney pleaded guilty to a two-count federal information. Count one charged him with harboring and concealing a fugitive, who was his client, and count II charged him with conspiracy to defraud the Customs Service of the Treasury Department by surreptitiously transporting funds of his client out of the country in order to evade reporting the exportation of money. Ciardelli, 118 Ill. 2d at 238-39. Unlike in the case before us there was considerable mitigation in Ciardelli. The Court noted the following mitigation:

[W]e have an attorney who was engaged primarily in the practice of criminal law for 26 years, and the charges in this case appear to be his only violation of ethical standards. He has participated in bar association activities and has been active in pro bono programs of the bar association, and he has been a panelist in the Federal court's pro bono criminal defense program. He and his wife have been active in their church and several charitable organizations. In addition, the testimony of judges and attorneys as to his character, reputation and fitness to practice law is quite persuasive.

Id. at 243-44.

In imposing a suspension for three years, the Court stated, "[w]ere it not for several mitigating circumstances, we would consider disbarment to be the appropriate sanction." (118 Ill. 2d at 243).

Minneman, 98 SH 38, the attorney was convicted of Conspiracy to Commit Tax Fraud, in that he knowingly helped a client hide more than $700,000 of income from the Internal Revenue Service over a three year period. The attorney deposited the client's business income into a (non-IOLTA) trust account, and then returned funds to the client in the form of cash. The attorney benefited financially by receiving the interest from the account in which the client's income was

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hidden. Thus, the attorney's misconduct "consisted of a deliberate, calculated series of individual acts, over an extended period of time." Also, he showed no remorse and did not understand the seriousness of his misconduct. He had no prior discipline. Disbarment was ordered. (Hearing Bd. at 4, 11, 19-20; Review Bd. at 4-7).

In Hook, 98 CH 50, the attorney was convicted in federal court of wire fraud, theft, and money laundering. In mitigation, the attorney had no prior discipline and ten character witnesses, including businessmen, attorneys and his ex-wife, testified that he had a very good reputation for honesty. The Review Board found the attorney's "lack of remorse and failure to acknowledge any wrongdoing particularly disturbing and indicative of an inability comprehend his ethical duties." The attorney was disbarred. (Review Bd. at 4, 9-10).

In In re Plachta, 2011PR00127, M.R. 25260 (May 18, 2012), the attorney's motion to strike his name from the rolls pursuant to Supreme Court Rule 762(a) was allowed. He pled guilty to three counts of possession of child pornography. He was sentenced to serve 4 days in jail, followed by a 30-month term of probation. The probation was revoked based upon the attorney's failure to maintain contact with his probation officer, and he was then sentenced to a 2-year prison term.

In In re Schaeffer, 00 RC 1501, M.R. 16529 (Mar. 22, 2000), the attorney pled guilty in federal court for "knowingly possessing visual depictions of minors engaging in sexually explicit conduct." The attorney was disbarred in the State of Missouri. The Supreme Court of Illinois allowed the Administrator's motion to impose reciprocal discipline, and ordered the attorney disbarred.

We note that there was substantially more mitigation in the cases of Fumo, Vavrick, and Ciardelli, than in this case. In Minneman and Hook, the aggravation and mitigation was similar

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to that in this case. In Plachta and Schaeffer, there as a name strike and a disbarment, respectively, based upon convictions for possessing child pornography, but without an additional conviction for fraud as in this case.

After considering the nature of the Respondent's misconduct, the evidence of aggravation and mitigation, the cases discussed above, and the purpose of the attorney disciplinary system, we believe that disbarment is the appropriate sanction in this case.

Therefore, we recommend that the Respondent, Gary Evan Peel, be disbarred.

Respectfully Submitted,

Leo H. Konzen
Robert P. Marcus
Richard Corkery

CERTIFICATION

I, Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois and keeper of the records, hereby certifies that the foregoing is a true copy of the Report and Recommendation of the Hearing Board, approved by each Panel member, entered in the above entitled cause of record filed in my office on February 1, 2013.

Kenneth G. Jablonski, Clerk of the
Attorney Registration and Disciplinary
Commission of the Supreme Court of Illinois