Jewelry And Massages Negate Causation

The Massachusetts Board of Bar Overseers recommends a two-year suspension of an attorney

The respondent admitted to stealing more than $20,000 from his law firm’s bank account. On appeal to us, he argues that the hearing committee incorrectly failed to take into consideration two mitigating factors: his claimed restitution to his law partners and his asserted gambling addiction, which he claims was the cause of his misdeeds. We agree with the committee that the respondent failed to carry his burden of proof on both arguments. We diverge from the hearing committee only as to the recommended sanction. We propose a license suspension of two years, rather than the 15-month suspension suggested by the committee.

The misconduct

The respondent was a partner in the law firm of Reilly, Newton & Rosnov, LLP. (“RNR” or “the firm”). RNR had a bank account (which it used for the firm’s operations) (the “Operating Account”) with the Institution for Savings Bank and a credit card account with American Express. The partners agreed to share equally monthly draws based on RNR’s net profit. The respondent took responsibility for the monthly payment obligations. The partners also agreed that each of them could use the firm’s credit card account for both business and personal charges on the condition that they would reimburse the credit card on a monthly basis for personal expenses. Because the credit card carried a high interest rate for unpaid bills, the partners agreed to pay off monthly balances in full. As with the Operating Account, the respondent was in charge of the credit card payments.

Between October 2015 and April 2017, the respondent, without the knowledge or consent of his two partners, withdrew from the Operating Account more than $5,000 over and above the amount he was entitled to be paid as monthly draws. Between July 2015 and May 2016, the respondent failed to reimburse his partners approximately $10,000 in personal expenses charged to the firm’s credit card. The respondent made additional unauthorized withdrawals from the Operating Account, for example by paying himself $9,500 in monthly draws while paying his partners only $8,500. (Hearing Committee Report (HCR) ¶ 14). In another month, he wrote himself eight checks from the Operating Account in a total amount of $18,500 while paying one of his partners only $10,000 and the other partner only $6,947.49. (HCR ¶ 15). One of his law partners discovered the misuse, when she noticed that her monthly draws were inconsistent with her hours and billings.

The former partners filed a bar complaint

In response to a complaint from the respondent’s former partners, in June 2019 bar counsel opened an investigation, which comprised a written response to the complaint by the respondent and an examination under oath. The hearing committee found that the respondent was not truthful during the investigation. It found that his written response to the complaint omitted a material fact: the respondent had been found in contempt by a New Hampshire court for failing to pay court-ordered child support to his former wife. While claiming that he was attending meetings of Gamblers Anonymous, the respondent failed to inform bar counsel that he had gambled during the pendency of the investigation, an omission the hearing committee later found to be material. Despite evidence that the respondent had gambled in June, July and August 2020, he represented to bar counsel (through a letter from his attorney) that he had not gambled since December 2019.

The mitigation gamble

The hearing committee concluded that the respondent did not suffer from a gambling disorder. The respondent disputes the conclusion. We need not address the question, because we find that, regardless of whether such a condition existed, the respondent failed to prove that his gambling (however described or defined) caused the misconduct.

The respondent did not steal from his partners to cover his gambling debts. While that fact is not fatal to his mitigation defense (money is fungible, so he could have used the money to pay other expenses that would have been paid but for his gambling), he presented no evidence of financial difficulties generally caused by gambling losses and that the gambling losses were the result of a disorder, rather than frequent wagering. Apparently, he used some or most of the stolen funds for luxury items such as jewelry and massages. In addition, as we will discuss in the next paragraphs, the respondent was not so compelled to gamble that it caused him to act unethically.

Conclusion

the respondent fell short of proving that his gambling (assuming it rose to the level of a recognized disorder) was a cause of his misconduct. Simply put, there are no facts in the record to support the defense. In addition, there was no evidence the respondent has addressed the issue and has a plan to prevent recidivism. We adopt the hearing committee’s conclusion that the respondent’s asserted gambling disorder should not be considered in mitigation.

Payback not mitigation

Although we take no position on the amount the respondent repaid, it is clear that he did so only after he was confronted about his theft. We recognize repayment as mitigating because we want to acknowledge lawyers who have voluntarily admitted their misconduct and taken voluntary steps to make amends. Making a payment in the circumstances of this case does not serve the same interest. We respectfully disagree with our dissenting colleagues that the respondent should be credited for repaying the money he stole before bar counsel’s investigation but after being confronted by his partners. Presumably, he would not have repaid the money if they had not discovered his theft.

Dissent

Whatever his motivations, the respondent cooperated with his former partners. He did not try to lie or dissemble. He admitted what he did. We should give credit for acknowledging what he did.

(Mike Frisch)