Applying Rule 8.5 To Rule 8.4(b): Choice Of Criminal Law In Bar Discipline

A District of Columbia Hearing Committee has recommended disbarment of an attorney based on findings of misappropriation and dishonesty.

One interesting aspect of the case is that the alleged misconduct took place in New York and Ireland, where the attorney is not admitted. Rather, he is only licensed in the District of Columbia.

The committee rejected the contention that the victim (Fusco) was not the attorney’s client

Respondent’s letterhead refers to his company as O’Neill & Company, International Legal Advisors, identifies himself as “Partner,” and lists bar memberships in Maryland and the District of Columbia. His email signature block references his District of Columbia Bar number. In written communication, Respondent refers to himself as “Esquire” and Fusco as his “client.” He asked that funds be sent to his IOLTA account, which by definition is a trust account maintained by lawyers.  see In re Green, Board Docket No. 13-BD-020, at 9-10 (BPR Aug. 5, 2015) (finding an attorney-client relationship based in part on an escrow agreement calling for funds to be deposited into the respondent’s firm’s “attorney escrow account”), recommendation adopted, 136 A.3d 699, 700-01 (D.C. 2016) (per curiam). He gave legal advice to Fusco, participated in negotiations, and provided specific comments on the legal documents drafted by Walsh, sharing those comments with Walsh and Tweedy’s solicitor.  In response to Tweedy’s request for additional time, he referred to his client’s interest and commented that to accede to Tweedy’s request could be malpractice.  In an October 2016 accounting, he identified the €4,125 payment to himself as “legal fees.”  see Green, Board Docket No. 13-BD-020, at 9-10 (finding an attorney-client relationship based in part on the attorney’s claim of entitlement to fees for “legal services”), recommendation adopted, 136 A.3d at 700-01. Lastly, Fusco and Walsh both testified that Respondent held himself out and acted as Fusco’s lawyer in connection with the Rokebury transaction. 

Eventually

Because Respondent would not return his funds, Fusco reported him to the Irish police. The police, however, declined to take any action because of the amount involved (less than €1 million). Fusco and Walsh also reported Respondent to the Law Society of Ireland, at which time they learned that Respondent was never qualified or licensed as a solicitor. 

In Irish court

On November 25, 2016, the High Court entered a judgment against Respondent ordering him to return the €169,271 to Fusco by November 28, 2016 and scheduled another hearing for November 30, 2016.

But

Respondent was personally served with the High Court’s order of November 30, 2016, the following day. Respondent failed to comply with the court order: he did not pay Fusco any money, and he failed to disclose his assets.

The committee details his conduct before the Irish court that led to the eventual bar complaint

In 2017, Walsh and Fusco filed complaints against Respondent with disciplinary authorities in the U.S., initially with Maryland.  The Maryland Bar Counsel referred Walsh to the Attorney Grievance Committee in New York, where Respondent lives and has his office. 

 New York declined to take any action because Respondent has never been licensed there and referred the complaint to D.C. 

In responding to the bar investigation

These representations to Disciplinary Counsel were false, as Respondent knew. 

As to misappropriation

Respondent misappropriated Fusco’s funds when he took and used Fusco’s funds without Fusco’s knowledge or consent. Respondent took the Fusco funds remaining in his Ulster account and the Fusco funds in his Chase IOLTA and transferred those funds to himself and to third parties. 

Respondent’s misappropriation of Fusco’s funds was intentional. Respondent admitted this at the hearing.

As to the application of the criminal law to the Rule 8.4(b) charge

Here, Disciplinary Counsel has alleged that Respondent’s conduct violated both the larceny statute of New York and the theft statute of Ireland – the two jurisdictions in which Respondent held the Fusco funds before taking them for himself and his friends, as well as wire fraud under U.S. federal law. Under the Court’s ruling in Gil, the Committee may look to the law of any jurisdiction that could have prosecuted Respondent for the misconduct to determine whether the lawyer’s conduct is a “criminal act” under Rule 8.4(b). 656 A.2d at 305…

Respondent’s conduct violated the New York statute. He intentionally embezzled or appropriated more than €170,000 he was supposed to be holding in trust for Fusco. He used Fusco’s funds to pay himself and third parties, knowing that he did not have Fusco’s consent to take the funds. FF 21-23. His lies and fabrication of bank records to cover up his theft confirms his guilty state of mind. 

Respondent’s conduct also violated the criminal theft statute in Ireland. The Irish statute provides that “a person is guilty of theft if he or she dishonestly appropriates property without the consent of its owner and with the intention of depriving the owner of it.” Section 4 of the Criminal Justice (Theft and Fraud Offences) Act of 2001. The statute further provides that ‘“appropriates’, in relation to property, means usurps or adversely interferes with the proprietary rights of the owner of the property; ‘depriving’ means temporarily or permanently depriving.” Respondent’s conduct satisfies all the elements of the Irish criminal statute because he intentionally misappropriated Fusco’s funds in the Ulster account for himself and third parties knowing that he did not have Fusco’s consent to do so, and thereby deprived Fusco of his funds – for more than three years running. 

The committee also found the conduct violated federal criminal law. 

Before the Irish court

While Respondent failed to participate in most of the hearings before the Irish High Court, in the few instances in which he appeared, he made knowing false statements to the court, including that: he had never been restricted or disqualified from serving on the boards of Irish companies; he could not pay Fusco because of a “notary” issue; he had made a second payment of €200,000 to Raja in error, resulting in the loss of Fusco’s funds; Raja had Fusco’s funds; he had arranged for a loan from Chase to pay Fusco; and he had provided Walsh’s firm the funds owed to Fusco by check. Respondent never corrected any of the false statements he made to the Irish court. These false statements where material to the Irish High Court’s determinations because they led the court to believe that the payment to Fusco was imminent and hid the fact that he had stolen the money.

In the bar investigation

While making representations to the contrary, Respondent knew that: he had not paid Fusco in full and that the Irish court order was outstanding; he had moved some of Fusco’s funds to his New York account without Fusco’s knowledge or consent; he had not paid Fusco at least €170,000 that he was owed; he had not “in error” transferred Fusco’s funds to Raja; Fusco’s funds were not “stolen” (other than by Respondent himself); the accounting he provided contained false entries; and the accounting provided to Disciplinary Counsel was fabricated. Respondent acknowledged that he lied to Disciplinary Counsel and submitted a fabricated accounting.

Proposed sanction

While making mention of the harm to Fusco, he is most focused on his own predicament – which was entirely of his own making. Respondent puts forward – as if it were a defense – the fact that he never denied owing Fusco the funds (except to Disciplinary Counsel) and claims that he still intends to pay him. He fails to appreciate that his “intention” to pay – especially three years later, when he has not paid a penny and never proposed a payment plan – is not mitigating. He requests “leniency” so that he would be able to repay Mr. Fusco – which he claims now is a top priority. This rings hollow, given that in over three years he has not made any effort to pay Fusco. Instead, over the years, he has engaged in a campaign of misrepresentation and deceit, first with Mr. Fusco, then Fusco’s solicitor, Mr. Walsh, the Irish High Court, Disciplinary Counsel, and even the Hearing Committee. Under these circumstances, disbarment is the appropriate sanction.

Hearing committee sanction recommendations are reviewed by (and not binding on) the Board on Professional Responsibility.

The Board in turn recommends a sanction to the Court of Appeals.

While the Board’s sanction is presumptively  correct, the Court has the ultimate authority with respect to both the law and the sanction. 

The report in In re O’Neill can be accessed here.

I have deleted the committee’s citations to the record and their findings to enhance readability of the quoted material. (Mike Frisch)