Telemarketing Violations Draws Reciprocal Censure

A reciprocal censure has been ordered by the New York Appellate Division for the Third Judicial Department

Respondent was admitted to practice by this Court in 2012 and has also been admitted in his home state of Utah, among other jurisdictions. At all relevant times, respondent operated a law firm in Utah which primarily engaged in credit repair services and, in 2019, the federal Consumer Financial Protection Bureau commenced a lawsuit that alleged that the firm and other codefendants had violated the Telemarketing Sales Rule (hereinafter TSR) (see 16 CFR 310.4 [a] [2]). Following a motion for summary judgment, the US District Court for the District of Utah concluded that the services offered by respondent’s firm violated the TSR (Bureau of Consumer Fin. Protection v Progrexion Mktg., Inc., 2023 WL 2548008, *5 [D Utah 2023], appeal dismissed 2023 WL 5835551 [10th Cir 2023]) and, in August 2023, it entered a stipulated judgment requiring respondent’s firm to conduct regular compliance reviews, comply with reporting and record-keeping requirements and pay restitution and civil penalties, among other things.

Utah’s Office of Professional Conduct thereafter filed a complaint against respondent based on the findings of the federal District Court, wherein it alleged that he had violated that state’s Rules of Professional Conduct. Upon his admission to violations of facts and rule violations, the Third Judicial District Court in and for Salt Lake County placed respondent on a two-year term of probation with conditions additionally imposed. The Attorney Grievance Committee for the Third Judicial Department (hereinafter AGC) now moves, by order to show cause initially marked returnable on October 7, 2024, but adjourned upon respondent’s request to November 4, 2024, to impose discipline upon respondent in this state as a consequence of his Utah misconduct. Respondent has submitted papers in response to the motion, AGC was heard in reply and respondent has submitted papers in surreply. Upon respondent’s request, the parties were heard at oral argument.

The consequence of multiple bar admissions

Respondent is admitted to practice law in several other jurisdictions in addition to Utah and New York, including Georgia, Texas, Washington, DC, Colorado and Idaho. As a consequence of his admitted misconduct in Utah, respondent advises that he has received a six-month stayed suspension with two years of probation with conditions in Colorado; a private reprimand and two-year probation with conditions in Idaho; a two-year probationary term with conditions in the District of Columbia; and a two-year suspension in Texas that is fully probated.

The court noted that probation is not an available option

While acknowledging the bevy of mitigating factors cited by respondent and his compliance with the conditions imposed as a consequence of the disciplinary stipulation in Utah, we would be remiss in not addressing the significance of respondent’s admitted misconduct, which ran afoul of a law specifically established to protect consumers who sought credit repair services. Even accepting respondent’s arguments that clients were satisfied with the firm’s efforts and benefitted from its efforts, we note that even positive benefits or outcomes to clients do not diminish the significance of an attorney’s misconduct. To that end, we censure respondent (see e.g. Matter of Chang, 232 AD3d 1197, 1199 [3d Dept 2024]; Matter of Mendelsohn, 230 AD3d at 945), and further direct respondent to complete 10 continuing legal education credits in the area of Ethics and Professionalism (see Rules of App Div, All Depts [22 NYCRR] § 1500.2 [c]), and provide proof of his compliance with this condition to AGC within six months of the date of this order.

(Mike Frisch)