Filed April 20, 2013

In re Rogelio Pena
Attorney-Respondent

Commission No. 2011PR00050

Synopsis of Hearing Board Report and Recommendation
(April 2013)

The Administrator filed a one-count Complaint against Respondent alleging that he formed an improper partnership with non-lawyers Miguel and Susan Dominguez for the purpose of handling loan modifications for distressed homeowners, shared legal fees with the Dominguezes, aided them in the unauthorized practice of law, failed to explain matters to the homeowner clients, and engaged in conduct which tends to defeat the administration of justice or bring the courts and legal profession into disrepute in violation of Supreme Court Rule 770. The parties filed a joint stipulation as to the facts and documents.

The Hearing Board found that, except for the Rule 770 charge, all charges of the Complaint were proved by clear and convincing evidence. With respect to a sanction, the Hearing Board took into account the mitigating factors, which included Respondent's recognition of the seriousness of his actions, his efforts to rectify his misconduct by assisting any clients who may have been harmed, his cooperation, and his lack of any prior discipline. The Hearing Board recommended a suspension of six months with the requirement that Respondent complete the ARDC Professionalism Seminar.

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

In the Matter of:

ROGELIO PENA,

Attorney-Respondent,

No. 6189269.

Commission No. 2011PR00050

REPORT AND RECOMMENDATION OF THE HEARING BOARD

INTRODUCTION

The hearing in this matter was held on August 23, 2012, at the offices of the Attorney Registration and Disciplinary Commission ("ARDC") before a panel consisting of Carl E. Poli, Chair, John P. Ratnaswamy and Robert A. Wilson. The Administrator was represented by Tracy Kepler. Respondent Rogelio Pe?a appeared pro se.

PLEADINGS

Complaint

On May 23, 2011 the Administrator filed a one-count Complaint against Respondent alleging that he formed an improper partnership with non-lawyers Miguel and Susan Dominguez for the purpose of handling loan modifications for distressed homeowners, failed to explain matters to the client/homeowners, shared legal fees with the Dominguezes, and aided them in the unauthorized practice of law.

Answer

Respondent admitted some of the factual allegations of the Complaint, denied other factual allegations, and denied engaging in any professional misconduct.

PAGE 2:

ALLEGED MISCONDUCT

The Administrator charged the following misconduct: 1) failure to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation in violation of Rule 1.4(b) of the 1990 and 2010 Illinois Rules of Professional Conduct; 2) sharing legal fees with a non-lawyer in violation of Rule 5.4(a) of the 1990 and 2010 Rules; 3) forming a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law in violation of Rule 5.4(b) of the 1990 and 2010 Rules; 4) practicing in the form of a professional corporation or association where a non-lawyer owned an interest in the corporation in violation of Rule 5.4(d)(1) of the 1990 and 2010 Rules; 5) assisting a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law in violation of Rule 5.5(b) of the 1990 Rules and Rule 5.5(a) of the 2010 Rules; and 6) conduct which tends to defeat the administration of justice or bring the courts and legal profession into disrepute in violation of Supreme Court Rule 770.

EVIDENCE

The Administrator and Respondent presented a Joint Stipulation of Facts which was admitted into evidence. Nine exhibits attached to the Joint Stipulation were also admitted. No other evidence was presented.

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. In re Ingersoll, 186 Ill. 2d 163, 710 N.E.2d 390 (1999). Clear and convincing evidence constitutes a high level of certainty, which is greater than a preponderance of the evidence but less than proof beyond a reasonable doubt. People v. Williams, 143 Ill. 2d 477, 577 N.E.2d 762 (1991).

PAGE 3:

Background Stipulated Facts

Respondent is fifty-two years old and was admitted to the practice of law in 1985. Between March 18, 2009 and September 23, 2010, he was a sole practitioner operating under the name "Rogelio Pe?a, Attorney at Law," located at 4928 S. Cicero in Chicago, Illinois. Prior to the downturn in the housing market, eighty percent of Respondent's law practice involved residential real estate transactions. (Jt. Stip. 8-9, 42).

Between March 18, 2009 and September 23, 2010, Miguel and Susan Dominguez were licensed real estate brokers in Illinois and the owners of Our Family Realty, which was located at 6126 W. Cermak in Cicero. Alberto Canaveral was a licensed real estate salesperson who worked for the Dominguezes. Respondent had met the Dominguezes in approximately 2004 or 2005 through his real estate work, and over the next several years they maintained an ongoing referral relationship. In 2009 and 2010 approximately forty percent of Respondent's income was generated from closings for clients referred by the Dominguezes. Between March 18, 2009 and September 23, 2010, Respondent met with clients, stored client files and used the administrative services at the offices of Our Family Realty. (Jt. Stip. 10, 11, 12)

Respondent knew that neither Miguel nor Susan Dominguez were licensed to practice law in Illinois, nor were any of the other non-lawyer employees of Our Family Realty. (Jt. Stip. 10, 34).

I.    Respondent is charged with forming a partnership with a non-lawyer when any part of the activities of the partnership consisted of the practice of law in violation of Rule 5.4(b).

A. Stipulated Facts and Evidence Considered

Respondent wanted to offer loan modification services to his clients who were having trouble meeting their monthly mortgage obligations, and proposed the idea of a partnership to Miguel Dominguez for that purpose. Thereafter, on or about March 18, 2009, Respondent,

PAGE 4:

Miguel Dominguez, and Susan Dominguez became equal members of a limited liability company entitled "Home Loan Modifications R.P., LLC" and agreed to share fees earned from the loan modification services. The company was originally formed to provide document processing services for loan modification applicants as well as secretarial and other clerical services. (Jt. Stip. 13, 14, 16, 17).

Between March 2009 and September 2010, Respondent, the Dominguezes, and other non-lawyer employees of Our Family Realty advertised Home Loan Modification R.P.'s services primarily to Spanish-speaking individuals through flyers and posters placed on the windows of the realty office, and through a website. Respondent also provided his business card and a business card for Home Loan Modification R.P. to be distributed to prospective clients. The flyers, printed in Spanish and English, provided the name of the company followed by "ATTORNEY R. PENA" and stated, among other things: "Find out how Attorney Roger Pe?a may help modify your mortgage to help lower your monthly payments and negotiate your original terms. Our average client receives a response with 45 days. Call Our Family Realty for a FREE CONSULTATION with no obligation." The telephone number listed on the flyer was for the office of Our Family Realty, where calls were answered by the Dominguezes, Canaveral, or other non-attorney employees. (Jt. Stip. 18-20; Ex. 3, 4).

Between March 18, 2009 and September 23, 2010, when a prospective distressed homeowner contacted Our Family Realty for a consultation, the Dominguezes or their employees set up an appointment and personally met with the homeowner at the offices of Our Family Realty. Contrary to Home Loan Modification R.P.'s intended function, during the meeting the homeowner's financial circumstances were discussed and documents such as bank statements, tax returns and closing documents (including settlement statements, mortgages and notes) were

PAGE 5:

reviewed. Additional topics of discussion included the advantages of a loan modification, whether or not the distressed homeowner qualified for loan modification, whether other options such as obtaining a lower interest rate, forbearance, foreclosure, short sale, or bankruptcy were available to the homeowner, and the process for obtaining a loan modification, including the execution of a loan modification agreement and other forms. (Jt. Stip. 21-22; Ex. 5).

The loan modification agreement, which was drafted by Respondent, appeared on stationery that bore his name and address, identified him as an attorney, and reflected the letters "RP" in large bold type at the top of the page. By its terms, the agreement was entered into between the borrower(s) and "Roger Pe?a, Attorney at Law for representation for a loan modification," and listed the fee for the loan modification services, which could range from $650 to $1,500. The agreement also stated that the borrower "acknowledges that this fee is for legal services and is NON-REFUNDABLE," but noted that the borrower could elect to cancel within thirty days of signing the contract. Respondent also drafted an authorization form which, when signed by the borrower, authorized Respondent to represent the borrower and authorized information to be released to him. Respondent provided both forms to the Dominguezes and non-lawyer employees of Our Family Realty. With Respondent's knowledge, authority and consent, the Dominguezes, Canaveral, and non-lawyer employees of Our Family Realty requested that each distressed homeowner execute the loan modification agreement prior to any services being rendered on behalf of the homeowner. (Jt. Stip. 23-24; Ex. 5, 6)

Once the distressed homeowner executed the loan modification agreement and paid a deposit or the entire fee, the Dominguezes or the non-lawyer employees of Our Family Realty, with Respondent's knowledge, authority and consent, contacted the homeowner's lender, advised the lender that Respondent was representing the homeowner, and forwarded the forms

PAGE 6:

required by the lender to request a modification of the existing loan. After the forms were submitted to the distressed homeowner's lender, the Dominguezes or their employees, with Respondent's knowledge, authority and consent, monitored the status of the loan modification process with the lender, including contacting the lender to request a status on the modification, requesting additional information from the homeowner at the lender's request, and responding to the homeowner's inquiries on the status of the modification. (Jt. Stip. 32, 33).

B. Analysis and Conclusions

Rule 5.4(b) prohibits an attorney from forming a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law. Respondent clearly formed a partnership with nonlawyers when he established Home Loan Modifications, R.P. with Miguel and Susan Dominguez. The question that remains is whether the activities of that company consisted of the practice of law.

The original intent behind the formation of Home Loan Modifications, R.P. was to process documents and provide clerical services, but the evidence shows it was immediately marketed as a provider of legal services. Respondent's name and status as an attorney was an integral part of the advertising and marketing.

With respect to the actual services provided by the company, the evidence consisted primarily of the activities of the non-lawyer owners and employees of Our Family Realty. When distressed homeowners responded to the flyers for Home Loan Modifications, R.P. and appeared for consultations, Miguel or Susan Dominguez, or one of the employees, reviewed legal documents, discussed issues such as forbearance, foreclosure, and bankruptcy, and had clients sign a loan modification agreement which specifically stated they were retaining Respondent and paying for legal services. Thus, the discussions went well beyond the mere collecting or processing of documents and entered into the realm of legal rights, options, and consequences.

PAGE 7:

The homeowners were then asked to sign an agreement to retain Respondent for legal services relating to loan modifications. Thereafter, loan modification services were provided, including communications with lenders, forwarding information to the lenders, and responding to the homeowners' inquiries.

In In re Discipio, 163 Ill. 2d. 515, 524-25, 645 N.E.2d 906 (1994) the Supreme Court stated that "the ?practice of law' defies mechanistic formulation" and "the focus of the inquiry must be on whether the activity in question required legal knowledge and skill in order to apply legal principles and precedent." In Discipio, a disbarred attorney who met with clients, gathered pertinent information from them and obtained signatures on appropriate documents, including an attorney/client agreement and documents that called for information regarding their legal rights, was found to have engaged in the practice of law. With respect to the attorney representation agreement, the Court noted that the agreement was intended to create a binding relationship and was, without question, a document of significant legal import.

In In re Fortier, 2011PR00151, M.R. 25288 (May 18, 2012) an attorney partnered with nonlawyers to offer loan modification services to distressed homeowners. The nonlawyers met with some of the homeowners to explain the services and advise the homeowner of their legal options. After the homeowners signed an agreement and paid fees, the nonlawyers submitted the required paperwork to lenders. The attorney was disciplined, on consent, for violating various rules, including Rule 5.4(d)(1). See also In re Pearcy, 98 SH 129, M.R. 17629 (Nov. 28, 2001) (Review Bd. at 11-12) (nonlawyers presenting and obtaining signatures on attorney client agreements supports finding of unauthorized practice of law).

Similar to the activities at issue in the foregoing cases, we find the activities of Home Loan Modifications, R.P. involved the practice of law. Certainly the homeowners who contracted

PAGE 8:

with Respondent had every reason to believe they were receiving legal services, as that provision was clearly stated in the loan modification agreement. Those services were then carried out by the Dominguezes and their employees.

Based on the foregoing, we find that Respondent violated Rule 5.4(b) by forming a partnership with two nonlawyers, when the activities of the partnership consisted of the practice of law.

II.    Respondent is charged with practicing in the form of a professional corporation or association where a non-lawyer owned an interest in the corporation in violation of Rule 5.4(d).

A. Stipulated Facts and Evidence Considered

We consider the facts previously summarized, along with the following facts.

Respondent prepared Articles of Organization for the limited liability company known as Home Loan Modifications R.P. and filed those Articles with the Illinois Secretary of State's office on March 18, 2009. As stated in the Articles, the three members of the company were Respondent, Miguel Dominguez and Susan Dominguez. The address given as the company's principal place of business was the same as the address of Respondent's law firm, and Respondent was listed as the registered agent. The company operated out of the offices of Our Family Realty. Pursuant to an agreement between the three members, fees generated by the company were split between them. (Jt. Stip. 14-15, 17; Ex. 2).

Between March 18, 2009 and September 23, 2010 Respondent drafted a loan modification agreement and authorization form for use in the loan modification process, met sporadically with thirty-five to forty of the distressed homeowners, and received fees for his services. (Jt. Stip. 23, 25, 35).

PAGE 9:

B. Analysis and Conclusions

The evidence shows that Respondent, Miguel Dominguez and Susan Dominguez each had an equal interest in the business entity known as Home Loan Modifications, R.P. Respondent was instrumental in the formation and marketing of the company, drafted documents used by the members of the company, and serviced clients, albeit in a limited fashion, as a part of that entity. Each of the members had a financial stake in the company, as the fees were divided between them. We find, therefore, that Respondent practiced law in the form of a professional business entity of which two non-lawyers held an interest in violation of Rule 5.4(d).

III.    Respondent is charged with assisting a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law in violation of Rule 5.5(b) (1990) and 5.5(a) (2010).

A. Stipulated Facts and Evidence Considered

As previously stated, Respondent set up a business entity for himself and two nonlawyers, and participated in advertising the business. When distressed homeowners made inquiries, the Dominguezes and employees of Our Family Realty met with the homeowners to discuss their financial circumstances, review documents, and advise the homeowners of their options. Respondent prepared documents that were used by the Dominguezes and non-lawyer employees of Our Family Realty to initiate the loan modification process for distressed homeowners. (Jt. Stip. 14, 18, 21-24).

With Respondent's knowledge, authority and consent, the Dominguezes and their employees requested that the distressed homeowners execute the loan modification agreement prepared by Respondent. After the agreement was signed, the Dominguezes and the employees of Our Family Realty contacted the homeowners' lenders, advised the lenders that Respondent was representing the homeowner, forwarded forms required by the lenders to request a modification, monitored the status of the loan modification process with the lenders, and

PAGE 10:

responded to homeowners' inquiries regarding the status of the loan modifications. During this time period, Respondent's contact with individual homeowners was minimal or nonexistent. (Jt. Stip. 23-24, 32-33, 35-36).

B. Analysis and Conclusions

In section I, we concluded that the loan modification services offered and being performed by Home Loan Modifications, R.P. constituted the practice of law. Those services were performed almost exclusively by the Dominguezes and the employees of their realty office, none of whom were lawyers, with little or no input by Respondent. Respondent did, however, make it possible for them to perform the services by setting up the business entity and lending his name and status as attorney to the services provided. We find, therefore, that Respondent assisted persons who were not lawyers in the performance of activities that constitute the unauthorized practice of law in violation of Rule 5.5(b).

IV.    Respondent is charged with failure to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation in violation of Rule 1.4(b).

A. Stipulated Facts and Evidence Considered

We consider the facts previously summarized, along with the following facts.

Between March 18, 2009 and September 23, 2010, approximately 100 distressed homeowners executed a loan modification agreement with Respondent. Respondent had minimal and sporadic contact with, at most, between thirty-five and forty of the homeowners. He was not advised about the existence of the other sixty to sixty-five distressed homeowners who entered into contracts with Home Loan Modifications, R.P., and therefore did not meet separately with them to determine what action was in their best interest, did not review the completed loan modification package prior to its submission to the homeowner's lender, did not monitor the loan modification process with the lenders, and did not supervise the day-to-day activities of Miguel

PAGE 11:

and Susan Dominguez, or any of the other non-lawyer employees of Our Family Realty. (Jt. Stip. 35-36).

B. Analysis and Conclusions

Although we do not know the precise nature of the discussions Respondent had with the thirty-five to forty distressed homeowners with whom he had contact, his contact was admittedly "minimal and sporadic." We also know that the Dominguezes and other employees of Our Family Realty were primarily in charge of the clients and provided services that Respondent should have been providing, including presenting legal options, gathering information, obtaining signatures on legal agreements, and providing the legal services that were promised in the retainer agreements.

As to the sixty to sixty-five homeowners of whom Respondent was unaware, the evidence did not reveal whether the Dominguezes purposefully secreted those individuals from Respondent, or whether Respondent was lax in communicating with the Dominguezes. Even if the former were true, we saw no evidence that Respondent asked to be apprised of the clients who retained his services or that he requested copies of all executed loan modification agreements. Because he knew the Dominguezes were obtaining signatures on agreements for his services, we believe he had an affirmative obligation to request and review all signed agreements.

Based on Respondent's minimal participation in the representation of thirty-five to forty clients, and his complete absence with respect to the remainder of the homeowners, we find the Administrator clearly and convincingly established that Respondent failed to explain matters to his clients reasonably necessary to permit them to make informed decisions in violation of Rule 1.4(b). See Pearcy, 98 SH 129 (Review Bd. at 17) (attorney who never spoke to his clients during representation "could not have fulfilled his obligations pursuant to Rule 1.4(b)").

PAGE 12:

V.    Respondent is charged with sharing legal fees with a non-lawyer in violation of Rule 5.4(a).

A. Stipulated Facts and Evidence Considered

We consider the facts previously summarized, along with the following facts.

The loan modification agreement prepared by Respondent, and presented to distressed homeowners, specified that a fee was to be paid for Respondent's legal services in connection with loan modifications. Respondent and the Dominguezes agreed that Respondent would retain one-third of the fees collected for loan modification services and pay two-thirds to Miguel and Susan Dominguez. Respondent knew that neither Miguel nor Susan Dominguez was licensed to practice law in Illinois. (Jt. Stip. 17, 23, 34; Ex. 5)

Between approximately March 18, 2009 and September 23, 2010, when distressed homeowners would pay the required fee in cash, Respondent, Miguel and Susan Dominguez divided the fee among themselves at or near the time of payment. When the fees were paid by check, the homeowners were instructed to make the checks payable to Home Loan Modification R.P. or Respondent, and the checks were deposited into an account entitled "Home Loan Modification R.P., LLC" at Charter One Bank, or into Respondent's IOLTA account at Harris Bank. Only the Dominguezes were signatories on the Charter One Bank Account. Respondent was not aware of the existence of the Charter One account and did not receive funds from that account. Between March 27, 2009 and August 31, 2010, $28,540 was deposited into the Charter One account for loan modification services. (Jt. Stip. 25-28; Ex. 7).

Because Home Loan Modifications, R.P. offered to perform services that included attempting to obtain forbearance from homeowners' mortgages, it was a "distressed property consultant" pursuant to the terms of the Illinois Mortgage Rescue Fraud Act and, as such, was prohibited from charging or collecting fees until after services were fully performed. 765 ILCS

PAGE 13:

940/50(a). At no time between March 18, 2009 and September 23, 2010 were the fees collected by Home Loan Modifications, R.P. or Respondent maintained in any bank account until after services were performed. At no time between March 18, 2009 and approximately July or August 2010 was Respondent aware of the terms and/or restrictions of the Mortgage Rescue Fraud Act. (Jt. Stip. 7, 29-31).

B. Analysis and Conclusions

Several paragraphs of the Joint Stipulation relate to the provisions of the Mortgage Rescue Fraud Act and the fact that, contrary to the provisions of that statute, Home Loan Modification, R.P. received fees prior to services being completed. The Administrator stipulated that Respondent was not aware of the statute, however, and he was not charged with any dishonesty or fraud in relation to his association with the Dominguezes or his payment of fees to them.

Whether or not Respondent knew of the statute relating to loan modifications, he should have known that sharing legal fees with nonlawyers is improper. In that regard the evidence showed that he entered into written agreements with clients to receive fees for legal services relating to loan modifications, and fees were, in fact, paid by the clients. He also had an agreement with the Dominguezes that he would pay them two-thirds of the fees collected. Cash payments were divided between Respondent and the Dominguezes pursuant to the agreement. The payments by check were handled differently, but a division seems to have occurred as some of the checks went into Respondent's account and some went into an account controlled by the Dominguezes.

We were not apprised of the total amount of fees collected or the exact amount received by Respondent or the Dominguezes, nor do we need to know those amounts to find that Respondent engaged in misconduct. The evidence and Respondent's own acknowledgements

PAGE 14:

clearly and convincingly established that he shared legal fees with non-lawyers and therefore we find that he violated Rule 5.4(a).

VI.    Respondent is charged with conduct which tends to defeat the administration of justice or to bring the courts and legal profession into disrepute in violation of Supreme Court Rule 770.

The Illinois Supreme Court has stated "Rule 770 is not itself a Rule of Professional Conduct" and "one does not 'violate' Rule 770. Rather, one becomes subject to discipline pursuant to Rule 770 upon proof of certain misconduct." In re Thomas, 2012 IL 113035 ? 92. Accordingly, based on the wording of the allegation in the Complaint before us, we find no violation of Rule 770.

EVIDENCE OFFERED IN MITIGATION

In June 2010 the Consumer Protection Division of the Illinois Attorney General's office received a complaint against Respondent, Miguel Dominguez and Our Family Realty relating to a loan modification and in July or August 2010, an attorney with that office requested a meeting with Respondent to discuss the business practices of Home Loan Modifications, R.P. During the meeting Respondent learned for the first time that his company's practices violated the terms of the Illinois Mortgage Rescue Fraud Act. Following the meeting, Respondent ceased doing business as Home Loan Modifications, R.P., and on September 23, 2010, he filed Articles of Dissolution with the Illinois Secretary of State dissolving Home Loan Modifications, R.P. (Jt. Stip. 37, 38, 40; Ex. 8).

On August 2, 2010 Respondent refunded the total fee received from the individual who submitted the consumer fraud complaint. Between the summer of 2010 and the time of the Joint Stipulation was signed, Respondent made payments totaling $2,750 to former clients of Home Loan Modifications, R.P. who requested refunds, and represented the remaining sixty to sixty-five clients in ongoing negotiations with their lenders for loan modifications, in foreclosure

PAGE 15:

matters, bankruptcy filings or in the sale of their properties, for no further fee. (Jt. Stip. 39, 41; Ex. 9)

Respondent participates on a monthly basis during the school year, and for several weeks during the summer, in "Youth in Crisis," a non-profit organization for Hispanic teens who have been involved in the juvenile criminal system. The organization helps the teens stay out of trouble through mentoring and summer volunteer programs building housing on Indian reservations. Respondent has also been active in the Berwyn Democratic Party through fundraising, sponsoring its golf outing and an unsuccessful run for alderman. (Jt. Stip. 43)

Respondent has cooperated with the Administrator, recognizes the seriousness of his actions, and has expressed remorse for his conduct. (Jt. Stip. 42).

Prior Discipline

Respondent has not been previously disciplined. (Jt. Stip. 42).

RECOMMENDATION

Having concluded Respondent engaged in misconduct, we must determine the appropriate discipline. In so doing, we note that the purpose of these proceedings is not to punish, but rather to safeguard the public, maintain the integrity of the profession and protect the administration of justice from reproach. In re Timpone, 157 Ill. 2d 178, 197, 623 N.E.2d 300 (1993). Attorney discipline also has a deterrent value in that it impresses upon others the repercussions of errors such as those committed by Respondent in the present case. In re Discipio, 163 Ill. 2d 515, 528, 645 N.E.2d 906 (1994).

In arriving at the appropriate discipline, we consider those circumstances which may mitigate and/or aggravate the misconduct. In re Witt, 145 Ill. 2d 380, 398, 583 N.E.2d 526 (1991). In mitigation, Respondent cooperated in these proceedings, expressed remorse,

PAGE 16:

recognized the serious nature of his conduct, and has been licensed since 1985 with no prior discipline. In addition, no evidence was presented to suggest Respondent's actions were the result of corrupt or dishonest motives. See In re Clayter, 78 Ill. 2d 276, 399 N.E.2d 1318 (1980).

We also consider, in mitigation, the corrective action taken by Respondent upon learning that his business practices violated the Illinois Mortgage Rescue Fraud Act. He immediately ceased doing business as Home Loan Modifications, R.P., and within several weeks formally dissolved that entity. He then either refunded fees to the loan modification clients or continued to represent them at no charge.

In aggravation, we may consider any harm or risk of harm that was caused by Respondent's conduct. See In re Saladino, 71 Ill. 2d 263, 276, 375 N.E.2d 102 (1978) (discipline should be "closely linked to the harm caused or the unreasonable risk created by the [attorney's] lack of care"). In this case Respondent, by his actions and lack of supervision, allowed non-lawyers to take charge of clients who had contracted to retain his legal services, thereby placing his clients' legal rights and options at risk. His inattention is even more troubling when we consider that his clients were in desperate financial straits.

We also consider the fact that Respondent's misconduct was not an isolated occurrence; rather, approximately 100 clients were involved over an eighteen month time period. Further, Respondent's wrongful acts encompassed several different types of conduct, including improper fee-sharing, assisting non-lawyers in the unauthorized practice of law, and failure to properly communicate information to clients.

The Administrator urged us to recommend a suspension of nine months and presented several cases in which the attorney's misconduct stemmed from inappropriate business relationships with nonlawyers. In In re Hickman, 2010PR00091, M.R. 25235 (May 18, 2012),

PAGE 17:

the attorney was suspended for thirty days, on consent, and required to attend an ethics class for misconduct that occurred in the context of providing loan modification services. The attorney shared legal fees with a non-lawyer, neglected the loan modification matters, and failed to refund unearned fees to the clients. Hickman, like Respondent, had no prior history of discipline, cooperated with the Administrator, was remorseful, and voluntarily ceased her association with the non-lawyer. Unlike the present case, Hickman's misconduct was limited to only two clients, she did not formally set up a business with a non-lawyer, and did not assist the non-lawyer in the unauthorized practice of law.

In In re Stranke, 2010PR00048, M.R. 23872 (Sept. 20, 2010), a case of reciprocal discipline, an attorney affiliated himself for approximately three months with nonlawyers in an organization that purported to assist individuals in saving their homes from foreclosures. The attorney was suspended for six months for sharing fees with nonlawyers, neglecting two bankruptcy matters, and engaging in the unauthorized practice of law by failing to be properly registered as a lawyer. A finding of dishonesty, fraud, deceit or misrepresentation was also noted, but the basis of that finding was not clear. In mitigation, Stranke had not been previously disciplined, acted without selfish motive, paid sanctions and disgorged funds as ordered by the court, and cooperated in the disciplinary proceedings.

We also find guidance in cases involving attorneys who entered into relationships with businesses that marketed and sold living trusts. In In re Pearcy, 98 SH 129, M.R. 17629 (Nov. 28, 2001) the attorney, who prepared trusts for several hundred clients over the course of about 15 months, was suspended for six months for assisting nonlawyers in the unauthorized practice of law, failing to explain matters to clients who purchased the trusts, and engaging in a conflict of interest. Pearcy had not been previously disciplined but, in aggravation, refused to

PAGE 18:

acknowledge the wrongful nature of his misconduct. In In re Ross, 97 CH 87, M.R. 15134 (Sept. 28, 1998), the attorney aided nonlawyers in the unauthorized practice of law for a period of four years, paid referral fees to another non-lawyer entity, and represented an individual and settled a case without authority. The attorney was suspended for one year, with nine months of the suspension stayed pending his compliance with a mentoring program. Like Respondent in this case, Ross had not been previously disciplined and voluntarily ceased his association with the trust business.

The Administrator cited to two cases in which harsher sanctions were imposed but those cases involved additional misconduct, including fraud or misrepresentation, and therefore are less apposite. See In re Fortier, 2011PR00151, M.R. 25288 (May 18, 2012) (attorney disbarred on consent for assisting in the unauthorized practice of law and improper fee sharing with respect to 300 clients, making false statements to Attorney General and clients, and soliciting employment through improper and false advertising); In re Stambulis, 98 CH 100, M.R. 17528 (June 29, 2001) (attorney who handled over 3,000 client matters during six year relationship with organization that marketed and sold estate planning services was suspended for two years for assisting in the unauthorized practice of law, sharing legal fees with nonlawyers, making misrepresentations, and representing clients in states where he was not registered). Likewise, we do not view the present case in the same vein as Discipio 163 Ill. 2d 515, where an attorney was suspended for two years for assisting a nonlawyer in the unauthorized practice of law and splitting fees with the nonlawyer for years. The Court was particularly concerned that the nonlawyer was a disbarred attorney and that Discipio knew his actions were wrong at all times, yet failed to exit the arrangement.

PAGE 19:

Having reviewed the foregoing cases and given some consideration to the length of the improper business association with non-lawyers, the number of clients served, whether additional misconduct was present and mitigating circumstances, we conclude that a suspension of six months is appropriate and within the range of discipline imposed in similar cases. Respondent's conduct was serious and continued for more than eighteen months but the mitigating circumstances, and in particular the celerity with which he dissolved his company and assisted his clients, weigh in his favor. We believe a moderate suspension will serve the purposes of the disciplinary process and alert other attorneys to proceed with particular care in areas, such as loan modifications, that generate a sudden influx of clients and are fraught with potential abuse.

Accordingly, we recommend that Respondent Rogelio Pe?a be suspended from the practice of law for a period of six months. Because his misconduct touched on several different areas, we further recommend that his reinstatement be conditioned on his completion of the ARDC Professionalism Seminar.

Respectfully Submitted,

Carl E. Poli
John P. Ratnaswamy
Robert A. Wilson

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 April 20, 2013.

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