Altered Document Misconduct Draws Proposed Suspension
A District of Columbia Hearing Committee found some and rejected other charged ethics violations in a matter involving an altered document
the Ad Hoc Hearing Committee finds that Disciplinary Counsel has proven by clear and convincing evidence the violations of Rules 8.1(a), 8.4(c) and 8.4(d), but has failed to meet its burden of proof for the Rule 8.1(b) and Rule 8.4(b) charges. The Committee additionally finds that the aggravating circumstance of intentional false testimony has not been established by clear and convincing evidence. We recommend that Respondent be sanctioned with a six month suspension.
…Respondent’s misconduct arose from his response to a disgruntled new client’s complaints about the amount of taxes that would result from the filing of a signed and notarized deed intended to transfer title of a property to the client’s wife’s LLC. That signed and notarized deed recorded a “zero consideration” amount that, under District of Columbia law, resulted in transfer and recordation taxes based on the current assessed value of the property. After considering his client’s protestations, Respondent improperly directed the alteration of the previously signed and notarized deed and tax form, to change the amount of consideration from zero to $450,000, which, in effect, reduced the taxes to an amount that satisfied his client. Instead of being taxed at the then-current assessed value of the property (approximately $857,000), his client was then taxed at almost half that amount ($450,000). Not only were the alterations to the notarized documents improper, but Respondent concedes he never notified the probate attorney (who had previously signed the deed as a witness for her client’s signing) of the changes, and, as a result, the probate attorney and her client were ordered to appear at hearings before an auditing branch manager and the Auditor-Master of the D.C. Superior Court’s Probate Division who were concerned about possible fraud. It is undisputed that the changes to the notarized documents resulted in Respondent’s client’s wife’s LLC paying approximately $12,000 less in taxes to the D.C. government. What is in dispute, however, is whether Respondent’s actions in accommodating his client’s view were consistent with relevant D.C. law or otherwise made in good faith, or whether Respondent knowingly altered the documents with an intent to defraud the D.C. government. While we find violations of Rules 8.4(c) and 8.4(d) for the improper altering and recording of the notarized documents, we decline to find that Respondent had an intent to defraud the D.C. government in light of the unusual preceding 16-year history of the property at issue and Respondent’s good faith belief that his estimated amount of consideration and the reduction in taxes were appropriate. Accordingly, we find that Disciplinary Counsel has not established by clear and convincing evidence that Respondent violated Rule 8.4(b).
Automatic reinstatement
We find that a fitness requirement is not supported in this case. While the Hearing Committee has reservations about Respondent’s competence to practice law and ability to avoid similar misconduct in the future, without clear and convincing evidence that Respondent’s decision to change the consideration was legally erroneous under D.C. Code § 42-1101, see FF 61, 69, 73, the Hearing Committee does not find sufficient evidence to impose a fitness requirement based on the violations found in this matter.
The fitness analysis – which determines whether or not reinstatement is automatic- is grounded in In re Cater, where the court (unwisely in my view) held that fitness is imposed only when Disciplinary Counsel presents “clear and convincing” evidence that the requirement is necessary.
I discuss the Cater case (which was before the Court of Appeals at publication, in my article on the D.C. bar disciplinary system in the Georgetown Journal of Legal Ethics. (Mike Frisch)