Suspension Insufficient

The web page of the Ohio Supreme Court notes a decision issued yesterday:

Cincinnati attorney Donald  M. Powers Jr.has been disbarred for his participation in a criminal real estate“flipping” scheme in which a title company that he partly owneddefrauded various financial institutions, resulting in losses ofapproximately $3.5 million. Powers’ law license has been under aninterim suspension since January 2006, after he entered guilty pleas tofederal felony counts of making a material false statement in a loanapplication and filing a false income tax return.

The courtadopted findings by the Board of Commissioners on Grievance &Discipline that Powers, his wife and several other persons purchasedlow-value homes in the greater Cincinnati area, obtained inflatedappraisals of the value of those properties, recruited buyers for thoseproperties who might not be able to afford them, created falsedocuments including W-2 forms, pay stubs, bank statements andemployment verifications inflating the stated income of the buyers, andsubmitted false loan “packages” to mortgage lenders in order to obtaina loan for much more than the actual value of the property.   

Inrejecting the disciplinary board’s recommendation that Powers beindefinitely suspended from practice rather than permanently disbarred,the Court noted that in his guilty pleas to criminal charges Powersadmitted that he personally owned five of the houses that were“flipped” at enormous profit by means of the criminal scheme, and thathe personally signed numerous federal housing agency forms falselyattesting that the buyers had provided a significant cash down-paymentwhen he knew they had not done so.

The court’s decision is linked here. Disbarment was required in light of the magnitude of the misconduct, involving theft-type behavior. The court rejected the assertion that the misconduct was due to the lawyer’s “inattention” and that others`were more deeply involved in the criminal scheme.  (Mike Frisch)