Criminal Contempt Conviction Draws Sanction Split

A report and recommendation issued today by the District of Columbia Board on Professional Responsibility is unusual for its lack of unanimity and even split on the proper sanction

The Board on Professional Responsibility hereby submits its unanimous findings of fact and conclusions that Respondent has violated D.C. Rules of Professional Conduct 3.1 and 8.4(d), and Maryland Rules 19-303.1, 19-303.3(a)(1), 19-308.4(c) and 19-308.4(d), as well as a majority finding that Respondent violated D.C. Rule 3.4(c), in an opinion drafted by Board Member Michael E. Tigar. Three Board members find that Disciplinary Counsel has failed to prove a violation of Rule 3.4(c), in a dissenting opinion drafted by Board Member Robert L. Walker.

There is no majority recommendation on sanction. Mr. Tigar, joined by Board Chair Bernadette C. Sargeant, Board Member Margaret M. Cassidy, and Mr. Walker, recommends a three-year suspension with a requirement that Respondent prove fitness prior to reinstatement. Board Member Thomas E. Gilbertsen, joined by Board Members Sara K. Blumenthal, Sharon R. Rice-Hicks, and William V. Hindle, recommends disbarment.

Vice Chair Sundeep Hora is recused from this matter and did not participate in the decision.

The case is unusual as well

This matter began after Respondent was found guilty of criminal contempt, in violation of 28 U.S.C. § 636(e)(2), in the United States District Court for the District of Columbia, for refusing to sit for a deposition. In re LeFande, 297 F. Supp. 3d  (D.D.C. 2018), aff’d, 919 F.3d 554 (D.C. Cir. 2019). Based on D.C. Bar R. XI, § 10, Disciplinary Counsel notified the D.C. Court of Appeals of Respondent’s conviction, and on May 31, 2019, the Court temporarily suspended Respondent and directed the Board to institute a formal proceeding to determine the nature of Respondent’s offense and whether the crime involved moral turpitude within the meaning of D.C. Code § 11-2503(a). The Board concluded that the crime was not one of moral turpitude per se and referred the matter to a hearing committee, giving Disciplinary Counsel the option of filing a petition charging one or more violations of the Rules of Professional Conduct. Order, In re LeFande, Board Docket No. 19- BD-036 (July 29, 2019). The Specification of Charges ultimately charged four Counts, which included counts related to the contempt conviction.

Despite having been provided notice of these proceedings, Respondent has not responded to the Specification of Charges or participated in the proceedings before the Hearing Committee and the Board.

The contempt related to the representation of a client

In July 2014, Anita Warren erroneously received a large sum of money ($293,514.44) from District Title, a title company, in connection with the sale of a property she owned. That money ought to have been paid to Wells Fargo Bank, who had a security interest in the property. FF 2. When District Title asked Ms. Warren to return the funds, she declined to do so, and instead transferred them to her son, Timothy Day, and other relatives for their personal use. FF 3. Respondent represented Ms. Warren and Mr. Day when District Title filed suit against them in D.C. Superior Court. FF 4. After the case was removed to federal court, on November 19, 2014, District Title sought an injunction to prevent Ms. Warren and Mr. Day from dissipating assets. FF 5. The following day, in connection with his representation of Mr. Day in an unrelated real estate transaction, Respondent directed that the proceeds from the unrelated real estate transaction (over $80,000) be wired to a bank account in New Zealand that was not in Mr. Day’s name. FF 6.

The transfer was discovered in post-judgment proceedings; Respondent’s testimony was sought

When Respondent appeared in court, he refused to take the witness stand, be sworn in, or be deposed, citing the attorney-client privilege and citing to his Fifth Amendment rights that had previously been rejected. FF 23. After refusing to comply with seven court orders to take the stand, the court held him in criminal contempt and fined him $5,000. Id. It subsequently held a hearing on the stillpending motion for civil contempt (FF 12) and granted the motion, imposing a fine of $1,000 per day until Respondent complied with court orders to sit for a deposition. FF 26-27. As of the date of the disciplinary hearing (January 2023), Respondent still had not complied. FF 28.

Then

As stated in Count I, Respondent filed a bankruptcy petition for Ms. Warren in the United States Bankruptcy Court for the District of Maryland, which created an automatic stay of the District Title enforcement action with respect to her. FF 18-19, 37. The bankruptcy court found that the petition, which came one day after Respondent filed a motion to dismiss Mr. Day from the case, was filed for the improper purpose of avoiding being deposed in the District Title case. FF 37-38. The Hearing Committee found that there was no legitimate basis for the filing, as Ms. Warren was not bankrupt. FF 38.

In addition to other charges

During the disciplinary investigation, Respondent filed his own Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of Florida. FF 85. The bankruptcy court dismissed the case, finding that the petition was filed in bad faith and noting that Respondent had “vanished” after a series of adverse rulings. Id.

The BPR majority found a Rule 3.4(c) violation that a dissent would not find

Rule 3.4(c) does not spare the lawyer from these consequences: its plain text simply shields the lawyer from professional discipline, if the lawyer acts openly and based on assertion that no valid obligation exists. There may be times, as in this matter, when a lawyer may incur a just finding of contempt yet not violate professional conduct Rule 3.4(c). We should not over-read Rule 3.4(c) in a way that may preclude a lawyer from openly taking a position based on an assertion that no obligation exists.

Member Tigar on sanction invokes some history

The fundamental idea of adversary inquiry traces deep roots in our social history, as well as in our legal system:

• He that is first in his own cause seemeth just; but his neighbor cometh and searcheth him. Proverbs 18:17 (King James).

• I cannot praise a fugitive and cloistered virtue, unexercised and unbreathed, that never sallies out and sees her adversary . . . [T]hat which purifies us is trial, and trial is by what is contrary. John Milton, Areopagitica, A speech of Mr. John Milton for the Liberty of Unlicensed Printing to the Parliament of England (1644).

And proposes a three-year suspension with fitness due to an absence of proof in complicity in client crime or faud

If Disciplinary Counsel wanted to lay the basis for a charge of criminal complicity, also known as “aiding and abetting” or accessory liability, we ought to expect that it would use an array of investigative tools. It would scour Respondent’s and his clients’ bank records and expenditure patterns, to determine whether Respondent received more than a normal and usual legal fee, and whether his spending patterns reflected unusual cash expenditures. See generally Milam v. United States, 322 F.2d 104 (5th Cir. 1963) (lawyer not liable as accessory to client’s criminal conduct). Perhaps hampered by Respondent’s failure to respond to its inquiries, Disciplinary Counsel did none of this. There is an old standard jury instruction on this topic: “If a party offers weaker or less satisfactory evidence when stronger and more satisfactory evidence could have been produced at trial, you may, but are not required to, consider this fact in your deliberations.” 1A Fed. Jury Prac. & Instructions §14.14 (6th ed.)

Member Gilbertson on sanction

We would uphold the Hearing Committee’s disbarment recommendation in light of this Respondent’s notorious and sustained misconduct, consistent with our Court of Appeals precedents disbarring attorneys whose conduct involves flagrant dishonesty…

While it is true that Respondent’s conduct was not undertaken for his own personal gain, did not injure his own clients, and cannot on this record be found to be criminal, those are hardly mitigating factors under the circumstances. Respondent’s dishonest conduct (including frivolous bankruptcy filings) enabled his clients to perpetuate an ongoing criminal scheme to place mistakenly transmitted District Title funds beyond service of process. We view these foreseeable consequences of Respondent’s misconduct as aggravating circumstances because his frivolous bankruptcy filings, prolonged dishonesty, and refusal to obey court orders benefitted his clients’ criminal scheme while seriously harming third parties (District Title and the intended recipient of its transmitted funds, Ms. Simu) and seriously interfering with the administration of justice over a six-year period. 

The decision of the United States Court of Appeals for the District of Columbia Circuit affirming the contempt is linked here.

When (as here)  there is no majority sanction recommendation, the presumption of deference by the Court of Appeals does not apply.

I believe that the last time there was no majority proposed sanction was in my prosecution of Elliott Abrams for his testimony before Congress. He was pardoned after the conviction that had led to the bar prosecution. 

The most notable instance of such a split was in In re Addams, which resulted in an en banc decision on the proper sanction for misappropriation. (Mike Frisch)