No Need To Wait For Sentencing

A plea of guilty was sufficient to warrant disbarment from the New York Appellate Division for the First Judicial Department

On May 17, 2017, respondent was convicted, upon her plea of guilty, in the United States District Court for the District of New Jersey, of making false entries to deceive the Federal Deposit Insurance Corporation (FDIC) and First State Bank (FSB) in violation of 18 USC § 1005, and conspiracy to deceive the FDIC and FSB and to influence the FDIC in violation of 18 USC §§ 371, 1005, and 1007, both federal felonies.

Final discipline may be imposed

Even though respondent has not yet been sentenced, the [Attorney Grievance Committee]’s application is timely because, for purposes of automatic disbarment, a conviction occurs at the time of plea or verdict (see Matter of Ravelo, 163 AD3d 98, 102 [1st Dept 2018]; Matter of Lin, 110 AD3d 186, 188 [1st Dept 2013]; Matter of Armenakis, 86 AD3d 205, 207 [1st Dept 2011]).

The criminal case

During her plea allocution, respondent acknowledged the details of the overall scheme as contained in the information. Specifically, respondent admitted that she and her co-conspirators attempted to conceal the misuse of FSB’s own funds to generate the $7 million capital infusion by causing FSB to make three fraudulent loans to the FSB stock purchasers, to which end respondent drafted a business plan for one of the purported borrowers in which she purposely misstated, among other things, the purpose of the loan, the intended use of the loan proceeds, and how the loan would be repaid.

Respondent also admitted that she and her co-conspirators sought to hinder the FDIC’s and FSB’s inquiries by preventing them from obtaining accurate information concerning the criminal conduct at issue, to which end respondent, among other things, affirmatively concealed from the FDIC and an officer of FSB that the 1.4 million FSB shares through which the improper capital infusion was financed were used to collateralize the fraudulent loans discussed above.

Also, as part of her written plea agreement, respondent consented to entry of a forfeiture money judgment against her for $37,500, which she acknowledged represented the proceeds of her criminal conduct in violation of 18 USC § 1005.

We find that respondent’s plea admissions, read in conjunction with the information to which she pled guilty, satisfy the elements of scheme to defraud in the first degree (Penal Law § 190.65[1][b]) in that respondent admittedly engaged in a “systematic ongoing course of conduct” by which she misled the FDIC and her client FSB by which she wrongfully obtained the $37,500 she agreed to forfeit. While it does not appear that this Court has previously found conspiracy convictions under 18 USC §§ 371, 1005 and 1007 to be analogous to Penal Law § 190.65(1)(b), it has found other federal convictions for conspiracy to be “essentially similar” to this New York felony based on plea admissions, read in conjunction with the information/indictment, and there is no reason not to do so in this case (see e.g. Matter of Boden, 146 AD3d 69 [1st Dept 2017]; Matter of Merker, 140 AD3d 1 [1st Dept 2016]; Matter of Harnisch, 7 AD3d 58 [1st Dept 2004]; Matter of Kim, 209 AD2d 127, 130-131 [1st Dept 1995].

Accordingly, the AGC’s motion should be granted to the extent of striking respondent’s name from the roll of attorneys and counselors-at-law in the State of New York, and respondent is disbarred effective nunc pro tunc to May 17, 2017.

The respondent sought to defer final action until her criminal sentencing and the completion of disciplinary proceedings in New Jersey, where she is presently suspended. 

App.com reported on the criminal case and respondent’s nomination by Chris Christie to a state board

Conroy, a Cranford attorney who lives in Middletown, was nominated by the governor in May 2010 to serve on the state Banking Advisory Board, an advisory panel. Her nomination was withdrawn that October – when, according to court documents, a conspiracy to defraud the Federal Deposit Insurance Corp. was in full swing.

Conroy thanked the governor and withdrew as a candidate in an Oct. 13, 2010, letter forwarded by the Governor’s Office.

(Mike Frisch)