Attorney Grievance v. Ucheomumu , 450 Md. 675 ( 2016 )

Attorney Grievance Commission of Maryland v. Andrew Ndubisi Ucheomumu, Misc.
Docket AG No. 27, September Term, 2015. Opinion by Hotten, J.
ATTORNEY DISCIPLINE — SANCTIONS — SUSPENSION: Maryland attorney
failed to maintain an attorney trust account, failed to competently represent client in federal
lawsuit, failed to clearly communicate billing structure to client, made an agreement with
a client for an unreasonable fee, failed to hold third-party funds in trust, failed to properly
terminate representation, presented frivolous arguments in a federal lawsuit, was
sanctioned by a federal court, and failed to properly maintain records of client’s payments
to attorney and third-parties. Attorney’s misconduct violated Maryland Lawyers’ Rules of
Professional Conduct: 1.1, 1.4(b), 1.5(a), 1.15(a) and (c), 1.16(d), 3.1, 3.4(a) and (d), 8.4(a)
and (d), Maryland Rules 16-604 (now Maryland Rule 19-404) and 16-606.1 (now
Maryland Rule 19-407), and Maryland Code (Repl. Vol. 2010), § 10-306 of the Business
Occupations & Professions Article. Under the circumstances, an indefinite suspension with
the right to apply for reinstatement after 90 days is the appropriate sanction. As a condition
of reinstatement, upon application, Respondent must provide the Attorney Grievance
Commission and Bar Counsel with appropriate documentation showing the existence and
maintenance of an attorney trust account.
Circuit Court for Montgomery County,
Maryland
Case No. 25749-M
Argued: September 8, 2016
IN THE COURT OF APPEALS
OF MARYLAND
Misc. Docket AG No. 27
September Term, 2015
______________________________________
ATTORNEY GRIEVANCE COMMISSION
OF MARYLAND
v.
ANDREW NDUBISI UCHEOMUMU
______________________________________
Barbera, C.J.,
Greene,
Adkins,
McDonald,
Watts,
Hotten,
Getty,
JJ.
______________________________________
Opinion by Hotten, J.
______________________________________
Filed: December 15, 2016
On July 10, 2015, the Attorney Grievance Commission of Maryland (“Petitioner”),
acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action against
Andrew Ndubisi Ucheomumu (“Respondent”) charging him with violating the Maryland
Lawyers’ Rules of Professional Conduct (“MLRPC”)1, arising out of his representation of
David C. Jackson and Jackson’s companies, Jalin Realty Capital Advisors (“Jalin”) and
American Capital Holdings (“ACH”). Petitioner’s gravest allegations against Respondent
claimed that Respondent continued to assist Jackson after Respondent was placed on actual
or constructive notice of Jackson’s fraudulent lending practices.2 The hearing judge agreed
and found that Respondent was “well aware of Jackson’s illegal activity,” and that
Respondent’s representation “actively aided and abetted” Jackson and Jalin.
For the reasons outlined infra, we disagree with the hearing judge’s finding that
Respondent had knowledge of Jackson’s advance fee fraud during Respondent’s
representation. Accordingly, we disagree with the hearing judge’s finding that Respondent
“aided and abetted” Jackson’s criminal activity. In light of Respondent’s less serious
violations of the MLPRC discussed herein, we find that the appropriate sanction is an
indefinite suspension with the right to apply for reinstatement after 90 days. As a condition
1
Effective July 1, 2016, the Maryland Lawyers’ Rules of Professional Conduct were
renamed the Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) and moved
to Title 19, Chapter 300 of the Maryland Rules. This opinion refers to the MLRPC, not the
MARPC, because all relevant conduct took place before July 1, 2016.
2
On September 29, 2015, a jury in the United States District Court for the District
of Connecticut found Jackson guilty of both conspiracy to commit wire fraud and
substantive counts of wire fraud. U.S. v. Jackson and Hurt, No. 3:14-cr-00250-JBA (D.
Conn. Sept. 29, 2015).
of reinstatement, upon application, Respondent must provide the Attorney Grievance
Commission and Bar Counsel with appropriate documentation showing the existence and
maintenance of an attorney trust account.
Petitioner charged Respondent with alleged violations of several rules of the
MLRPC: Rule 1.1 (Competence); Rule 1.2 (Scope of Representation and Allocation of
Authority Between Client and Lawyer); Rule 1.4 (Communication); Rule 1.5 (Fees); Rule
1.15 (Safekeeping Property); Rule 1.16 (Declining or Terminating Representation); Rule
3.1 (Meritorious Claims and Contentions); Rule 3.4 (Fairness to Opposing Party and
Counsel); Rule 8.4 (Misconduct); Petitioner also charged Respondent with violations of:
Maryland Rule 16-6043 (Trust account — Required deposits); Maryland Rule 16.606.14
(Attorney trust account record-keeping); and § 10-306 of the Business Occupations and
Professions Article of the Maryland Code (Trust money restrictions).
I. Findings of Fact and Conclusions of Law
By an Order dated July 13, 2015, we referred the Petition to the Honorable Ronald
B. Rubin of the Circuit Court for Montgomery County for an evidentiary hearing. On
October 22, 2015, Judge Rubin (“the hearing judge” or “the hearing court”) rendered
Findings of Fact and Conclusions of Law. The findings were as follows:
The [R]espondent, Andrew N. Ucheomumu (“Ucheomumu” or
“[R]espondent”), is 56 years old. He immigrated to the United States from
Nigeria in 1979. Before practicing law, he had been employed in the
3
Maryland Rule 16-604 is now codified as Maryland Rule 19-404, effective as of
July 1, 2016.
4
Maryland Rule 16.606.1 is now codified as Maryland Rule 19-407, effective as
of July 1, 2016.
-2-
import/export business from 1979 through 2006, Ucheomumu received his
undergraduate degree in 2003 from the University of Pittsburgh. He received
his law degree from the David A. Clarke School of Law of the University of
the District of Columbia in 2008. Ucheomumu was admitted to the Maryland
Bar on June 15, 2009.
In 2009, Ucheomumu received an LL.M. from The American
University School of Law in constitutional and national security law. In
2011, he received an LL.M. from the University of Hull in England, in
European Public Law.
After law school, Ucheomumu began practice as a solo practitioner.
At the time of the events giving rise to the Petition, [R]espondent’s
professional experience was limited to serving as a panel attorney in Prince
George’s County, where he handled juvenile matters, a small number of
family law, and simple contract cases.
Ucheomumu first met David C. Jackson (“Jackson”) in 1993 at a
“business incubator” located in Pittsburgh, Pennsylvania, where they both
maintained offices. At that time, Jackson was operating a mortgage business
and Ucheomumu was running an import/export business. In 2006, Jackson
was convicted of mortgage fraud and sentenced to a forty-one month term in
federal prison. This story was, according to [R]espondent, “front page news”
in the local Pittsburgh newspaper. Respondent admitted that he knew, in
2006, that Jackson had been convicted of mortgage fraud. Ucheomumu
moved to Maryland in June 2006.
Jackson was released from prison in 2009. In June 2010, Jackson
contacted Ucheomumu by telephone. According to [R]espondent, Jackson
simply “looked me up” out of the blue and said that he was “back in business
on the mortgage lending side.” During that conversation, Ucheomumu told
Jackson that he had passed the Maryland Bar and was now engaged in the
practice of law. Shortly thereafter, in July 2010, Ucheomumu was asked by
Jackson to serve as “outside general counsel” for Jalin Realty Capital
Advisers, LLC (“Jalin”), an entity controlled by Jackson.
A. Books and Records
On August 26, 2010, Jackson signed a retainer agreement on behalf
of Jalin, which [R]espondent had prepared to memorialize the representation.
Jalin allegedly was a hard money lender located in Ohio. The retainer
agreement was signed by Jackson using the name of “C. David Manns.”
According to [R]espondent, Jackson told him that he had legally changed his
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name to Manns after his release from federal prison. Respondent, however,
never requested proof of or verified whether Jackson had legally changed his
name.
As well, [Respondent] never visited Jalin’s office or conducted any
due diligence into Jalin’s lending operation, despite knowing that Jackson
previously had been convicted of mortgage fraud. Nevertheless, from July
2010 through December 2012, [R]espondent performed a variety of legal
services for Jalin, a successor entity known as American Capital Holdings,
L[L]C (also controlled by Jackson),[] and Jackson personally.
According to the retainer agreement, [R]espondent was hired as
“Outside Counsel on General Matters.”[] The first page of the agreement
provides that there is to be a $10,000.00 non-refundable retainer. The retainer
agreement said: “This means CLIENT will not get the money back.”
Page two, however, recited inconsistently that legal work for Jalin was
to be billed at an hourly rate of $195.00 per hour and charged against the
retainer.
Page four recited that time is to be recorded in tenths of an hour and
that the attorney “will bill monthly for legal services.” Further, the retainer
agreement provided that bills for legal services “are payable immediately
when received.”
During this period of representation, [R]espondent did not maintain
an attorney trust account. Consistent with the language of the retainer
agreement, [R]espondent deposited funds received from his client into his
general bank account at the Bank of America.[] Respondent, who billed at
$195.00 per hour according to the retainer agreement, sent only one invoice
to Jackson on September 23, 2010.[] This invoice covered the period August
23, 2010 through September 22, 2010. No further invoices were created or
sent to the client until after a complaint had been filed with Bar Counsel and
an inquiry into [R]espondent’s recordkeeping was initiated. Respondent did
not maintain contemporaneous records of Jalin or Jackson’s payments apart
from his bank records and the single invoice.
On January 7, 2011, [R]espondent received a payment of $1,150.00
from American Capital Holdings, a company formed by Jackson.
Respondent did not have a separate retainer agreement with American
Capital Holdings. It is not entirely clear from the record whether this
company is a legal successor to Jalin or a separate, new entity which Jackson
formed to continue its lending business. Respondent performed no due
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diligence in this regard and was unclear during his testimony at the hearing
as to the precise nature of this entity and its ownership structure.[] Respondent
was paid legal fees by American Capital Holdings[] and used some of the
funds he received from American Capital Holdings to pay other attorneys.
The court finds that [R]espondent paid one firm, the Pemberton Law Firm of
Minnesota, the sum of $1934.00, not the $4,000.00 as originally instructed
by Jackson.
Between August 2010 and December 2012, [R]espondent received a
total of $90,850.00 in legal fees from Jackson and his businesses.[] During
that same period, [R]espondent billed Jackson and his companies for
$153,512.25.[] Some of the funds deposited into [R]espondent’s bank
account were earmarked for third parties, such as local counsel.[]
B. Knowledge of Jackson’s Criminal Activities
According to FBI Agent Ronald Henderson, [R]espondent was told
during a meeting on June 6, 2011, that Jackson was again under criminal
investigation for mortgage fraud, and that Jackson used C. David Manns and
Charles Jackson as aliases. Agent Henderson also presented [R]espondent
with a financial analysis of the fraud under investigation and a summary of
Jackson’s past criminal history. The agent wanted to interview Jackson, but
[R]espondent, on Jackson’s behalf, requested transactional immunity from
federal prosecution. The government was willing only to grant Jackson use
immunity.[] As a consequence, on Jackson’s behalf, [R]espondent declined
the Agent’s request for Jackson to cooperate in the federal investigation.
The court credits Agent Henderson’s testimony and disbelieves
[R]espondent’s recollection of the meeting and its import. Clearly, as of June
6, 2011, [R]espondent knew that Jackson once again was under federal
criminal investigation for fraud. The court finds that during his representation
of Jalin, American Capital Holdings and Jackson, [R]espondent performed
no due diligence regarding his clients’ business practices, or the pleadings
and discovery responses he filed on their behalf in various litigations, despite
knowing that investors were claiming that Jalin was running an advance fee
scheme[—]taking their advance fees but refusing to fund loans.
Once [R]espondent met with federal investigators in June 2011, the
court finds that [R]espondent either knew, or recklessly disregarded, the fact
that Jalin was taking advance fees from clients and then intentionally failing
to fund loans. Despite this knowledge, [R]espondent thereafter actively aided
and abetted Jalin (and Jackson) by intentionally obfuscating the truth about
Jalin’s business practices in communications with other attorneys who were
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complaining about Jalin’s refusal to return fees or to fund loans, and in filings
with courts. Respondent’s conduct in this regard was willful, and was not the
result of a subjective, good faith mistake.
The court finds, based on a review of [R]espondent’s time records
along with [R]espondent’s testimony at the hearing, that [R]espondent was
intimately involved with Jalin’s business practices and Jackson’s personal
matters, his protests to the contrary notwithstanding. Respondent was well
aware, the court finds, that Jalin was taking advance fees from clients,
declining thereafter to fund loans, and that Jalin’s clients were regularly
demanding refunds of the advance fees. Despite this knowledge,
[R]espondent continued with the representation, including the filing of two
federal lawsuits to aid and assist Jackson’s criminal efforts. Also,
[R]espondent, among other things, represented Jackson personally
concerning the restitution Jackson owed for his prior mortgage fraud
conviction, as well as legal research for Jackson’s potential (and personal)
tort claims. For [R]espondent to claim that he did not know what was going
on – as he did during his testimony – belies credulity. The court disbelieves
[R]espondent’s testimony to the contrary.
As Judge Moylan observed in Steinberg v. Arnold, “as fact finder, [the
judge] has the usual jury prerogatives of whether to believe or disbelieve
witnesses, how much weight to give testimony and ultimately whether to be
persuaded or not to be persuaded.” 42 Md. App. 711, 712 (1979). The court
is persuaded, by clear and convincing evidence, that [R]espondent knowingly
assisted Jackson’s illegal advance fee scheme and profited therefrom.
C. Jalin v. A Better Wireless
In July 2010, [R]espondent began representing Jalin in a dispute with
Mitch Koep, the owner of A Better Wireless, NISP, LLC, a Minnesota
company. A Better Wireless had sought funding through Jalin, paying an
advance fee of $37,500.00. Jalin failed to provide funding and refused to
refund the fee. On behalf of Jalin, the court finds that [R]espondent reviewed
documents and provided advice with respect to this failed loan transaction.
Thereafter, on January 21, 2011, [R]espondent filed a lawsuit on behalf of
Jalin in federal court in Minnesota. The complaint pled a number of causes
of action and sought money damages and injunctive relief. According to the
complaint, A Better Wireless falsely accused Jalin of mishandling the loan.
Respondent conducted no pertinent factual investigation before filing the
complaint. Further, [R]espondent failed to procure a notarized affidavit that
was needed to support the demand for injunctive relief. As well,
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[R]espondent failed to appear for a pre-trial conference on June 8, 2011, and
was sanctioned $450.00 by the court.
Thereafter, in August 2011, [R]espondent was served with discovery
requests by counsel for A Better Wireless. On October 9, 2011, [R]espondent
sent responses to the interrogatories and request for production of documents
which wholly failed, the court finds, to comply with settled federal discovery
rules. The responses, the court finds, contained frivolous and boilerplate
objections, having nothing to do with the information requested by the
opposing party. At the hearing in this matter, [R]espondent was not able to
satisfactorily explain to this court why he answered the Minnesota discovery
in the manner in which he did.
Not surprisingly, the federal magistrate judge supervising the
Minnesota case also found [R]espondent’s professional conduct sorely
lacking. Among other things, the magistrate judge found that [R]espondent
“made no attempt to explain why its discovery responses are substantially
justified.” The magistrate judge also found that the “discovery responses fail
to meet an objective standard of reasonableness.” The court sanctioned
[R]espondent personally in the amount of $1,610.00. The court also
precluded [R]espondent’s clients from using in any subsequent proceedings
in the case any documents or other information requested but not provided
in the discovery responses drafted and filed by [R]espondent. The complaint
[R]espondent filed for Jalin later was dismissed by the district judge, with
prejudice.
D. The Texas Litigation
Jalin was dissolved in 2011, in connection with the bankruptcy filing
by Anthony Byrd, a nephew of Jackson. Jalin, it turns out was simply a
registered trade name of Rhythm Stone Media Group, LLC, not a separate
company. Jackson established American Capital Holdings to continue his
“lending” business.
On January 30, 2012, [R]espondent filed a complaint on behalf of
American Capital Holdings in federal court in Texas. The suit was against an
entity called Brightway Financial Group for allegedly issuing bogus standby
letters of credit. In connection with this litigation, and in opposition to a
motion to compel arbitration, [R]espondent knowingly filed an affidavit for
Jackson using the false name [“]Charles Jackson,” not David C. Jackson,
which was his legal name.
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E. Mitigation
By way of mitigation, [R]espondent presented the testimony of
Samuel Hamilton, a well-known and senior member of the Bar. Mr.
Hamilton has known [R]espondent since 2010. The court credits Mr.
Hamilton’s testimony regarding [R]espondent’s character during the period
and in the context which he has known him.
(Footnotes omitted).
The Conclusions of Law made by the hearing judge were as follows:
Conclusions of Law
In view of the court’s factual findings, the court concludes that
[R]espondent has violated a number of the Rules of Professional Conduct.
The court finds that [R]espondent knowingly failed to deposit client funds
into an attorney trust account in violation of Rule 1.1. Respondent did not
even have an attorney trust account until after his representation of Jalin and
Jackson ended, in violation of Rule 16-604. As well, [R]espondent was
required to deposit funds intended for Gilbert and Pemberton in trust, and not
in his general bank account. Similarly, [R]espondent did not maintain
contemporaneous records of his receipt of client funds until after Jackson
filed a complaint and Bar Counsel requested [R]espondent to provide time
and billing records, in violation of Rule 16-606.1. See also Section 10-306
of the Business Occupations and Professions Article, which prohibits the use
of trust money for other than its intended purpose[].
With respect to the A Better Wireless litigation in Minnesota, the
court finds that [R]espondent demonstrated a lack of competence in violation
of Rule 1.1. The court further finds that [R]espondent failed, under Rule
1.4(a)(3) to comply with reasonable requests for information during
discovery. The court also finds that [R]espondent violated Rule 1.4(b) by
failing to disclose and clarify to his clients, in an unambiguous manner, the
structure of the billing arrangement and the apportionment of fees to specific
legal work. The court also finds that [R]espondent manifestly did not possess
the requisite skill and experience to prosecute the Minnesota federal action,
as evidenced by his testimony in this case, and the decision of two Minnesota
federal judges.
Respondent also violated Rule 3.1 in connection with the Minnesota
litigation. Among other things, the complaint [R]espondent filed had no good
faith, factual basis and the [R]espondent had no documents to support the
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allegations he made in the complaint. Further, the complaint was, at best,
highly misleading and, the court finds, was part of a concerted effort to assist
Jackson in holding onto illegally earned advance fees extracted in connection
with a fraudulent lending scheme.
Respondent’s conduct in discovery also violated Rule 3.4(a) and Rule
3.4(d). Respondent intentionally withheld substantive, discoverable
information he learned from his meeting with the FBI and the complaints of
other Jalin clients about its failure to fund loans. He also failed, in good faith,
to meet and confer with opposing counsel. Further, in connection with the
Minnesota case, the court finds that [R]espondent did not properly account
to his clients (albeit they too were part of a criminal enterprise themselves)
for the fees he charged, in violation of Rule 1.5(a).
The court finds that [R]espondent violated Rule 1.15(a) by failing to
maintain funds belonging to third parties in an attorney trust account.
Respondent also violated Rule 1.15(c) and (d) when he failed to obtain third
parties’ informed consent (the Pemberton Law Firm and Greg Gilbert,
Esquire) before depositing unearned funds into his general bank account. The
court also finds that [R]espondent violated Rule 1.16(d) by failing to send
Jackson invoices and a complete copy of his file, after Jackson requested
these documents on at least two occasions.
The court also finds multiple violations of Rule 8.4. Respondent
plainly violated Rule 8.4(c) and (d) (and therefore also Rule 8.4(a)).
Particularly egregious was his filing of two declarations by Jackson, using
different names, with two federal courts. The court finds that [R]espondent
knew that these were filed in an attempt to mislead and misinform the court
and opposing counsel, and to conceal Jackson’s true identity. Respondent,
the court finds, intentionally used a false name on behalf of his client
(Jackson) in two court filings, all of which aided and assisted his client’s
cover-up of an on-going fraud scheme, and enabled [R]espondent at the same
time to bill and collect tens of thousands of dollars in fees. It defies common
sense for [R]espondent to posit that he was unware of Jackson’s activities
and that he was simply another person “duped” by Jackson. The court finds
the opposite to be true; [R]espondent, well aware of Jackson’s illegal activity,
dined on the gravy train until that gravy simply got too hot to handle.
(Footnotes omitted).
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II. Standard of Review
The manner in which this Court reviews attorney discipline proceedings is well
established:
This Court has original and complete jurisdiction over attorney discipline
proceedings in Maryland. We conduct an independent review of the record
and we accept the hearing judge’s findings of fact unless shown to be clearly
erroneous. Under our independent review of the record, we must determine
whether the findings of the hearing judge are based on clear and convincing
evidence. With respect to exceptions, upon our review of the record, the
hearing judge’s findings of fact generally will be accepted unless they are
clearly erroneous. A hearing judge’s factual finding is not clearly erroneous
if there is any competent material evidence to support it. As to the hearing
judge’s conclusions of law, such as whether provisions of the Maryland
Rules of Professional Conduct were violated, our consideration is de novo.
Attorney Grievance v. Hodes, 441 Md. 136–69, 168, 105 A.3d 533, 552–53 (2014)
(citations, footnote, and quotations omitted). Petitioner filed no exceptions to the hearing
judge’s findings of fact and conclusions of law, and recommends disbarment. Respondent
filed numerous exceptions to both the hearing judge’s findings of fact and conclusions of
law.
III. Respondent’s Exceptions to the Findings of Fact
Respondent’s Exceptions to the Findings of Fact Pertaining to Respondent’s
Knowledge and Assistance of Jackson’s Criminal Activity
Respondent presents several exceptions to the hearing judge’s findings of fact
regarding Respondent’s knowledge of Jackson’s criminal activity during Respondent’s
representation of Jackson and his companies. Underlying our analysis is the
“fundamental principle that the factual findings of the assigned judge in an attorney
disciplinary proceeding ‘are prima facie correct and will not be disturbed on review unless
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clearly erroneous.’” Attorney Grievance Comm’n v. Sheridan, 357 Md. 1, 17, 741 A.2d
1143, 1152 (1999) (quoting Attorney Grievance Comm’n v. Glenn, 341 Md. 448, 470, 671
A.2d 463, 473 (1996)). A hearing judge’s factual finding is not clearly erroneous “[i]f
there is any competent material evidence to support [it].” YIVO Inst. for Jewish Research
v. Zaleski, 386 Md. 654, 663, 874 A.2d 411, 416 (2005).
Respondent opposes the hearing judge’s findings of fact that, after Respondent
conferred with Agent Henderson in June 2011, “[R]espondent either knew, or recklessly
disregarded, the fact that Jalin was taking advance fees from clients and then intentionally
failing to fund loans.” Respondent argues that the jury verdict sheet utilized in Jackson’s
wire fraud trial supports Respondent’s position. The guilty verdict adjudged Jackson’s
conduct during a time period which spanned from April 27, 2010 to August 3, 2010.
Jackson did not initially contact Respondent regarding legal representation until July 16,
2010. Conversely, Petitioner contends that Respondent’s billing records, Jackson’s use of
aliases, and Respondent’s meeting with Agent Henderson provide competent material
evidence that Respondent had knowledge of, or recklessly disregarded, Jalin’s fraudulent
activities.
Agent Henderson’s testimony regarding the June 2011 meeting with Respondent
provides evidence of the infancy of the investigation of Jackson at the time of Agent
Henderson’s meeting with Respondent. Agent Henderson testified at Respondent’s
evidentiary hearing as follows:
So the purpose of our meeting, then, with [Respondent] was to talk to
him about possibly getting his client, Mr. Jackson, to potentially cooperate.
And during the course of that meeting, then we gave, we laid out some of the
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evidence that we basically collected against his client. One of the, a couple
of the things were that his client, we knew that his client’s name was David
Jackson, not C. David Manns, and that’s the name that he [had] been using
to, in communicating with several victims that we had spoken to.
We also communicated to [Respondent] about Mr. Jackson’s past. We
knew that he had a previous felony conviction. Had just gotten out of federal
prison in 2009. And we knew the, told [Respondent] that we knew the extent
of the fraud that [Jackson] had committed previously. And then we talked to
[Respondent] about, basically told him that we had done some financial
analysis, some bank record analysis, and had spoken to victims, and talked
to them about statements that were made to, to them by Mr. Jackson.5
Before the hearing court, Agent Henderson testified that, at the time of his meeting with
Respondent, Agent Henderson was not aware of the issuance of any warrant pertaining to
Jackson’s advance fee fraud. Agent Henderson further testified that he could not recall
whether a target letter6 had been issued regarding any ongoing investigation of Jackson’s
advance fee fraud.7 The ultimate conviction against Jackson was based on conduct that
5
Respondent sought transactional immunity for Jackson’s cooperation in the
investigation, which the Government was not willing to provide.
6
A target letter is “a prosecutor’s letter to a potential defendant stating that a
criminal investigation is underway and suggesting that the recipient consult counsel.”
Target Letter, BLACK’S LAW DICTIONARY (10th ed. 2014).
7
Respondent’s counsel’s cross-examination of Agent Henderson contained the
following exchange:
[Respondent’s counsel]: . . . You’re not aware of any application for a
warrant that was made as of that time as to Mr. Jackson, is that correct?
[Agent Henderson]: Correct.
[Respondent’s counsel]: You’re not aware as to whether there was any target
letter that was ever issued to Mr. Jackson as of that point, are you?
(continued…)
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occurred during a time period that almost entirely preceded Respondent’s representation
of Jackson. The guilty verdict in Jackson’s federal criminal conspiracy trial found Jackson
guilty of conspiracy to commit wire fraud and substantive counts of wire fraud occurring
on or about the following dates in 2010: April 27, May 10, May 21, June 23, June 24, July
1, July 14, July 30, and August 3.8 Respondent’s billing records show that he had billed
Jackson for 2.1 hours of work on July 19, 2010 and 3.2 hours of work on July 21, 2010 for
a total of 5.3 hours billed during the time period in which Jackson’s convicted conduct
occurred. Respondent’s retainer agreement was not signed by Jackson until August 27,
2010. Based on the record, it is too grave of an inferential step to charge Respondent with
sufficiently particularized knowledge of, or reckless disregard for, Jackson’s criminal
activity, as there is no competent material evidence to support that finding by clear and
convincing evidence. Thus, Respondent’s exception is sustained.
Respondent also excepts to the hearing judge’s factual finding that Agent Henderson
“presented [R]espondent with a financial analysis of the fraud under investigation . . . .”
The testimony of Agent Henderson regarding this matter was as follows:
(…continued)
[Agent Henderson]: I don’t recall if any—
[Respondent’s counsel]: All right, that’s all I’m interested in. Whether you
recall.
[Agent Henderson]: —whether, whether there was a target letter at that point.
8
Jury Verdict, U.S. v. Jackson and Hurt, No. 3:14-cr-00250-JBA (D. Conn. Sept.
29, 2015).
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And then we talked to [Respondent] about, basically told him we had done
some financial analysis, some bank record analysis, and had spoken to
victims and, and talked to them about statements that were made to, to them
by Mr. Jackson.
Petitioner did not file a written response to this exception.9 “A hearing judge’s factual
finding is not clearly erroneous if there is any competent material evidence to support
it.” Attorney Grievance Comm’n v. McDonald, 437 Md. 1, 16, 85 A.3d 117, 125
(2014) (quotation omitted). Agent Henderson’s testimony that he “told [Respondent] [the
FBI] had done some financial analysis” does not lead to the inference that “Agent
Henderson also presented [R]espondent with a financial analysis of the fraud under
investigation . . . .” A presentation of financial analysis is substantially different from a
communication that “some financial analysis[]” has been completed. Thus, Respondent’s
exception is sustained.
Respondent excepts to the hearing judge’s finding that “Respondent was well aware
. . . that Jalin was taking advance fees from clients, declining thereafter to fund loans, and
that Jalin’s clients were regularly demanding refunds of the advance fees. Despite this
knowledge, [R]espondent continued with the representation, including the filing of two
federal lawsuits to aid and assist Jackson’s criminal efforts.” For the reasons stated above,
Respondent’s exception to the hearing judge’s finding regarding Respondent’s knowledge
of Jackson’s criminal activity is sustained. It follows that, without knowledge of Jackson’s
9
Petitioner however noted at oral argument before this Court that Agent
Henderson’s representation to Respondent that the FBI “had done some financial analysis,
some bank record analysis,” could be deemed as a presentation of financial analysis. We
disagree with such a broad interpretation of Agent Henderson’s testimony.
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criminal activities, Respondent could not aid and abet Jackson’s criminal activities. See,
e.g., Bellamy v. State, 403 Md. 308, 334, 941 A.2d 1107, 1122 (2008) (holding that “a
person aids and abets the commission of a crime by knowingly associating with the
criminal venture with the intent to help commit the crime, being present when the crime is
committed, and seeking by some act to make the crime succeed”).
There is no competent material evidence to support a finding that Respondent’s
continued representation and lawsuits “aid[ed] and assist[ed] Jackson’s criminal efforts.”
The first lawsuit, entitled Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP,
LLC, was brought in United States District Court for the District of Minnesota on January
21, 2011. 917 F. Supp. 2d 927 (D. Minn. 2013). This suit involved claims for
cybersquatting,10 trademark infringement, common law defamation and tortious
interference. Id. All of Jalin’s claims were dismissed by the court on summary judgment,
and A Better Wireless’ motion for summary judgment on its counterclaim for fraud was
denied. Id. at 945. The suit was ultimately settled.
10
As explained by the A Better Wireless court:
Congress enacted the Anticybersquatting Consumer Protection Act, 15
U.S.C. § 1125(d), (‘the ACPA’) in 1999 to protect trademark owners against
cybersquatting—the practice of registering well-known brand names as
Internet domain names in order to force the rightful owners of the marks to
pay for the right to engage in electronic commerce under their own brand
name.
Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC, 917 F. Supp. 2d 927,
935 (D. Minn. 2013) (citations and quotations omitted).
- 15 -
The second lawsuit, entitled American Capital Holdings, LLC v. Brightway
Financial Group, LLC, was brought in the Northern District of Texas on January 30, 2012.
This suit was based upon claims by Jackson that Alex Hurt, and others associated with
Brightway, had defrauded Jackson’s company, ACH, and its customers by issuing
fraudulent guaranty letters of credit from a dummy company known as RBS Alliance. The
lawsuit was ultimately dismissed based upon a decision upholding a mandatory arbitration
clause in the parties’ contract. There is no competent material evidence of record to support
a finding that Respondent’s representation and filing of these two lawsuits “aid[ed] and
assist[ed] Jackson’s criminal efforts.”
Next, Respondent excepts to the hearing judge’s finding of fact that Respondent
“knowingly assisted Jackson’s illegal advance fee scheme and profited therefrom.” For the
reasons expressed above, there is no competent material evidence of record to support a
finding by clear and convincing evidence that Respondent had knowledge of, let alone
assisted in, Jackson’s criminal activities. Thus, this exception is sustained.
Respondent’s Exceptions to the Hearing Judge’s Remaining Findings of Fact
Respondent demurs to the finding of fact that “[R]espondent paid one firm, the
Pemberton Law Firm of Minnesota, the sum of $1[,]934.00, not the $4,000.00 as originally
instructed by Jackson.” Respondent testified before the hearing court that he sent to
Jackson the Pemberton Law Firm’s bill of $1,934 to be paid by Jackson directly to the
Pemberton Law Firm. Respondent averred that he sent this bill to Jackson because Jackson
habitually paid Respondent for his work, while also giving Respondent payments that were
to be forwarded to Pemberton. Respondent further testified that Jackson wired $4,000 and
- 16 -
then $2,000 into the Respondent’s operating account. Respondent testified that, at the time
these funds were wired, Jackson owed Respondent the sum of $52,333 for legal work
performed.
An email from Respondent to Jackson, with the subject line “Re: Money Transfer
from AMERICAN CAPITAL HOLDINGS, LLC []” stated as follows: “This is to certify
that we received a total of $6,000.00 representing the following: A) $4,000.00 for
Pemberton Law Firm in Minnesota. B) $2,000 for The Ucheomumu Group, LLC to offset
the cost of traveling and lodging in Minnesota for the upcoming hearing scheduled for
September 19, 2012. Thank you.” Respondent testified before the hearing court that,
immediately after Respondent sent this email, Jackson sent Respondent a considerable
amount of documents to review. Respondent then asked Jackson how Jackson would pay
Respondent for this document review, as Jackson already had an outstanding balance due
to Respondent. Respondent testified that Jackson then instructed Respondent to only pay
the Pemberton Law Firm their outstanding balance of $1,934 from the wired funds, instead
of $4,000 as Jackson originally instructed.
Despite Respondent’s testimony regarding Jackson’s second instruction to only pay
$1,934 of the wired funds to Pemberton, the evidence of this second instruction does not
render null and void the competent material evidence to support the finding of fact that
“[R]espondent paid one firm, the Pemberton Law Firm of Minnesota, the sum of $1934.00,
- 17 -
not the $4,000.00 as originally instructed by Jackson.” (Emphasis added). Thus,
Respondent’s exception is overruled. 11
Respondent next excepts to the hearing judge’s finding that “[i]n July 2010,
[R]espondent began representing Jalin in dispute with Mitch Koep, the owner of A Better
Wireless, NISP, LLC, a Minnesota company.” The evidence of record demonstrates that
Respondent’s representation in the A Better Wireless suit began in October 2010, not July
2010. Thus, this exception is sustained.
Lastly, Respondent excepts to the hearing judge’s finding that “Respondent failed
to procure a notarized affidavit that was needed to support the demand for injunctive
relief.” While this is ultimately supported by competent material evidence of record, we
also note that the record reflects that Respondent made attempts to procure the affidavit
from his client, Jackson. Jackson, through no fault of Respondent, failed to provide the
requisite information needed for the affidavit to Respondent.
IV. Respondent’s Exceptions to the Conclusions of Law
Respondent filed exceptions to the hearing judge’s conclusions of law. We review
the hearing judge’s conclusions of law de novo, addressing each of Respondent’s
exceptions.
11
Notwithstanding Respondent’s testimony regarding Jackson’s amendment of
Jackson’s original instruction, as noted in Petitioner’s Response to Respondent’s
Exceptions “[o]f course, it is undisputed that the funds earmarked for Pemberton were
never maintained in trust.” Respondent’s violations of rules and statutes governing trust
accounts are outlined infra.
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Respondent’s Exceptions to the Conclusions of Law Pertaining to Respondent’s
Knowledge and Assistance of Jackson’s Criminal Activity
Respondent excepts to the following conclusions of law made by the hearing judge
pertaining to Respondent’s knowledge and assistance of Jackson’s criminal activity:
Further, the complaint [in the A Better Wireless suit] . . . was part of a
concerted effort to assist Jackson in holding on to illegally earned advance
fees extracted in connection with a fraudulent lending scheme.
***
Respondent . . . intentionally used a false name on behalf of his client
(Jackson) in two court filings, all of which aided and assisted his client’s
cover-up of an on-going fraud scheme[.]
For the reasons outlined in Section III, we sustain Respondent’s exceptions pertaining to
the hearing judge’s conclusions of law based on findings of fact that Respondent had
knowledge of, or recklessly disregarded, Jackson’s criminal activity, and acted in
furtherance thereof.
Respondent’s Exceptions to the Hearing Judge’s Remaining Conclusions of Law
Respondent’s Exception to Rule 1.1 as it Pertains to Trust Accounts
Rule 1.1 provides, “[a] lawyer shall provide competent representation to a client.
Competent representation requires the legal knowledge, skill, thoroughness and
preparation reasonably necessary for the representation.” Respondent excepts to the
hearing judge’s conclusion of law that Respondent “knowingly failed to deposit client
funds into an attorney trust account in violation of Rule 1.1” During all times pertinent to
Respondent’s representation of Jackson and Jalin, Respondent did not maintain an attorney
trust account. Thus, Respondent’s exception is overruled. As we held in Attorney
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Grievance Comm’n v. Shephard, competent representation includes proper treatment and
maintenance of client funds in a trust account. 444 Md. 299, 324–25, 119 A.3d 765, 780
(2015). We find by clear and convincing evidence that Respondent violated Rule 1.1 by
failing to maintain an attorney trust account during his representation of Jackson, Jalin, and
ACH.
Respondent’s Exception Regarding Rule 1.15
Respondent next excepts to the hearing judge’s conclusion of law that Respondent
“was required to deposit funds intended for Gilbert and Pemberton in trust, and not into his
general bank account.” Rule 1.15(a) and (c) provide:
(a) A lawyer shall hold property of clients or third persons that is in a
lawyer’s possession in connection with a representation separate from the
lawyer’s own property. Funds shall be kept in a separate account maintained
pursuant to Title 16, Chapter 600 of the Maryland Rules, and records shall
be created and maintained in accordance with the Rules in that Chapter.
Other property shall be identified specifically as such and appropriately
safeguarded, and records of its receipt and distribution shall be created and
maintained. Complete records of the account funds and of other property
shall be kept by the lawyer and shall be preserved for a period of at least five
years after the date the record was created.
***
(c) Unless the client gives informed consent, confirmed in writing, to a
different arrangement, a lawyer shall deposit legal fees and expenses that
have been paid in advance into a client trust account and may withdraw those
funds for the lawyer’s own benefit only as fees are earned or expenses
incurred.
Respondent argues that he did not personally deposit any funds intended for third parties
into his bank account. Rather, Jackson wired the funds into Respondent’s account. We hold
that violations of Rule 1.15(a) and (c) do not require intention, and in this case, Respondent
did not maintain a trust account in which funds could be deposited. Thus, Respondent’s
- 20 -
exception is overruled. Accordingly, we find that Respondent violated Rule 1.15(a) and
(c).
The hearing judge further found that Respondent violated Rule 1.15(d). Rule
1.15(d) provides:
(d) Upon receiving funds or other property in which a client or third party
has an interest, a lawyer shall promptly notify the client or third person.
Except as stated in this Rule or otherwise permitted by law or by agreement
with the client, a lawyer shall deliver promptly to the client or third person
any funds or other property that the client or third person is entitled to receive
and, upon request by the client or third person, shall render promptly a full
accounting regarding such property.
Respondent testified before the hearing court that Respondent sent to Jackson the
Pemberton Law Firm’s bill of $1,934 to be paid by Jackson directly to the Pemberton Law
Firm. Respondent further testified that, on September 13, 2012, Jackson wired $4,000 and
then $2,000 into the Respondent’s operating account. Respondent testified that, at the time
these funds were wired, Jackson owed Respondent the sum of $52,333 for legal work
performed.
An email from Respondent to Jackson confirmed the wire transfer of $6,000, and
further confirmed that $4,000 of the wired funds were intended for Pemberton. Respondent
testified before the hearing court that, immediately after Respondent sent this email,
Jackson sent Respondent a considerable amount of documents to review. Respondent then
asked Jackson how he would pay Respondent for this document review, as Jackson already
had an outstanding balance due to Respondent. Respondent testified that Jackson then
instructed Respondent to only pay the Pemberton Law Firm their outstanding balance of
$1,934 of the wired funds, instead of $4,000 as Jackson originally instructed. The evidence
- 21 -
shows that Pemberton ultimately received $1,934 pursuant to Jackson’s amended
instruction. We cannot find by clear and convincing evidence that Respondent failed to
promptly notify Pemberton of the funds Pemberton was entitled to receive pursuant to
Jackson’s amended instruction. In addition, Respondent did not fail to promptly deliver the
funds to Pemberton pursuant to Jackson’s amended instruction. Thus, Respondent did not
violate 1.15(d).
Respondent’s Exception Regarding Rule 1.4(b)
Respondent further demurs from the hearing judge’s finding that Respondent
“violated Rule 1.4(b) by failing to disclose and clarify to his clients, in an unambiguous
manner, the structure of the billing arrangement and the apportionment of fees to specific
legal work.” Rule 1.4(b) states that, “[a] lawyer shall explain a matter to the extent
reasonably necessary to permit the client to make informed decisions regarding the
representation.” Respondent’s retainer agreement, signed by Jackson, stated in a section
entitled “FEES BEYOND RETAINER[,]” “CLIENT has read and understands that this
Agreement calls for any and all fees to be figured on an hourly basis . . . .” Respondent’s
emails to Jackson claimed that, with respect to the A Better Wireless matter, Respondent
charged Jackson flat fees: $7,000 to file a temporary restraining order and $12,000 for
subsequent litigation. In addition, Respondent’s billing records show that Respondent
charged hourly fees for the A Better Wireless matter. We find that Respondent’s failure to
clearly communicate his billing structure to Jackson in an unambiguous manner is a
violation of Rule 1.4(b). Attorney Grievance Comm’n v. Ross, 428 Md. 50, 74, 50 A.3d
1166, 1179–80 (2012).
- 22 -
Respondent’s Exception Regarding Rule 3.4
Respondent next excepts to the hearing judge’s finding that “[R]espondent
intentionally withheld substantive, discoverable information he learned from his meeting
with the FBI and the complaints of other Jalin clients about its failure to fund loans.”12 The
hearing judge found that Respondent violated Rule 3.4(a) and (d). Rule 3.4(a) states that
“[a] lawyer shall not . . . unlawfully obstruct another party’s access to evidence or
unlawfully alter, destroy, or conceal a document or other material having potential
evidentiary value.” Rule 3.4(d) states that “[a] lawyer shall not . . . in pretrial procedure,
make a frivolous discovery request or fail to make reasonably diligent effort to comply
with a legally proper discovery request by an opposing party[.]” Judge Brisbois’ Order,
which sanctioned the Respondent for Respondent’s conduct during discovery in the A
Better Wireless matter, stated:
Moreover, combined with Plaintiff’s late responses to discovery, late
submission of verification of discovery responses by a corporate
representative, and failure to even appear at the present motion hearing,
suggests that Plaintiff’s discovery requests were formulated for an improper
purpose and intended to delay and harass the Defendant.13
12
We do not agree that Respondent’s failure to provide information related to his
meeting with Agent Henderson regarding the preliminary investigation into his client’s
conduct, constitutes a violation of the Rules of Professional Conduct. Respondent’s other
conduct, however, in the A Better Wireless litigation constitutes a violation of Rule 3.4.
Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC v. Rhythm
13
Stone Media Group, LLC, No. 0:11-cv-00165-JRT-LIB (D. Minn. Feb. 22, 2012).
- 23 -
Respondent’s conduct during discovery in the A Better Wireless litigation, as evidenced by
Judge Brisbois’ Order, violated Rule 3.4(a) and (d). Thus, Respondent’s exception is
overruled.
Respondent’s Exception Regarding Rule 1.5(a)
Lastly, Respondent excepts to the hearing judge’s conclusion that Respondent “did
not properly account to his clients (albeit they too were part of a criminal enterprise
themselves) for the fees he charged, in violation of Rule 1.5(a).” Rule 1.5(a) provides:
A lawyer shall not make an agreement for, charge, or collect an unreasonable
fee or an unreasonable amount for expenses. The facts to be considered in
determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal service
properly;
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment of the lawyer;
(3) the fee customarily charged in the locality for similar legal
services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the
client;
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and
(8) whether the fee is fixed or contingent.
Respondent claimed that, “[a]fter our initial invoice [was] not paid in full, we agreed with
[Jackson] that he must pay us on a flat fee basis for our work. Thus, we did not have an
- 24 -
invoice relationship with [Jackson], thereafter.” As noted in our analysis of Respondent’s
violation of Rule 1.4(b), a flat fee arrangement was not discussed within the retainer
agreement. The agreement stated in a section entitled “FEES BEYOND RETAINER,”
“CLIENT has read and understands that this Agreement calls for any and all fees to be
figured on an hourly basis . . . .” Respondent charged flat fees for work that was also billed
on an hourly basis. We find that the ambiguous and contradictory nature of billing
structure, which was not clearly communicated to the client, constitutes an unreasonable
fee agreement in violation of Rule 1.5(a). Thus, Respondent’s exception is overruled.
The Hearing Judge’s Remaining Conclusions of Law
Maryland Rule 16-604
The hearing judge further found that Respondent violated Maryland Rule 16-604,14
as Respondent did not have a trust account during the relevant time period. We agree.
Maryland Rule 16-604 provides:
Except as otherwise permitted by rule or other law, all funds, including cash,
received and accepted by an attorney or law firm in this State from a client
or third person to be delivered in whole or in part to a client or third person,
unless received as payment of fees owed the attorney by the client or in
reimbursement for expenses properly advanced on behalf of the client, shall
be deposited in an attorney trust account in an approved financial institution.
This Rule does not apply to an instrument received by an attorney or law firm
that is made payable solely to a client or third person and is transmitted
directly to the client or third person.
14
Maryland Rule 16-604 is now codified as Maryland Rule 19-404, effective as of
July 1, 2016. We refer to the former rule, as the hearing judge’s conclusions of law were
made prior to this change and referred to the former rule.
- 25 -
Maryland Rule 16-604 requires that all funds received by a lawyer from a client or third
person, and designated to be delivered to a client or third person, be deposited in a trust
account. Respondent did not have an attorney trust account until after his representation of
Jalin concluded. Therefore, any deposit of a third party fee was a de facto commingling of
fees with Respondent’s personal funds. Respondent received several payments from
Jackson intended for third parties, none of which were transferred to a trust account.
Therefore, Respondent’s actions violated Rule 16-604.
Maryland Rule 16-606.1
The hearing judge found that the Respondent violated Rule 16-606.115 as
Respondent did not maintain contemporaneous records of his receipt of client funds until
after Jackson filed a complaint and Bar Counsel requested Respondent to provide time and
billing records. We agree. Maryland Rule 16-606.116 proscribes that for each attorney trust
15
Maryland Rule 16.606.1 is now codified as Maryland Rule 19-407, effective as
of July 1, 2016. We refer to the former rule, as the hearing judge’s conclusions of law were
made prior to this change and referred to the former rule.
16
Maryland Rule 16-606.1 provides:
(a) Creation of records. The following records shall be created and
maintained for the receipt and disbursement of funds of clients or of third
persons:
(1) Attorney trust account identification. An identification of all
attorney trust accounts maintained, including the name of the financial
institution, account number, account name, date the account was opened,
date the account was closed, and an agreement with the financial institution
establishing each account and its interest-bearing nature.
(continued…)
- 26 -
(…continued)
(2) Deposits and disbursements. A record for each account that
chronologically shows all deposits and disbursements, as follows:
(A) for each deposit, a record made at or near the time of the deposit
that shows (i) the date of the deposit, (ii) the amount, (iii) the identity of the
client or third person for whom the funds were deposited, and (iv) the purpose
of the deposit;
(B) for each disbursement, including a disbursement made by
electronic transfer, a record made at or near the time of disbursement that
shows (i) the date of the disbursement, (ii) the amount, (iii) the payee, (iv)
the identity of the client or third person for whom the disbursement was made
(if not the payee), and (v) the purpose of the disbursement;
(C) for each disbursement made by electronic transfer, a written
memorandum authorizing the transaction and identifying the attorney
responsible for the transaction.
(3) Client matter records. A record for each client matter in which the
attorney receives funds in trust, as follows:
(A) for each attorney trust account transaction, a record that shows (i)
the date of the deposit or disbursement; (ii) the amount of the deposit or
disbursement; (iii) the purpose for which the funds are intended; (iv) for a
disbursement, the payee and the check number or other payment
identification; and (v) the balance of funds remaining in the account in
connection with the matter; and
(B) an identification of the person to whom the unused portion of a
fee or expense deposit is to be returned whenever it is to be returned to a
person other than the client.
(4) Record of funds of the attorney. A record that identifies the funds
of the attorney held in each attorney trust account as permitted by Rule 16-
607 b.
(b) Monthly reconciliation. An attorney shall cause to be created a
monthly reconciliation of all attorney trust account records, client matter
records, records of funds of the attorney held in an attorney trust account as
(continued…)
- 27 -
account, a chronological record must be kept detailing transactions made from or to such
account. Respondent did not maintain contemporaneous records of client funds to be
maintained in trust. Thus, Respondent violated Rule 16-606.1.
Maryland Code (Repl. Vol. 2010), § 10-306
of the Business Occupations & Professions Article
Section 10-306 provides that “[a] lawyer may not use trust money for any purpose
other than the purpose for which the trust money is entrusted to the lawyer.” Respondent
received attorney’s fees intended for third parties into his operating account. Respondent
did not at any point transfer these funds into a trust account, as Respondent did not have a
trust account until after his representation of Jalin and Jackson ended. Thus, Respondent
violated § 10-306.
(…continued)
permitted by Rule 16-607 b, and the adjusted month-end financial institution
statement balance. The adjusted month-end financial institution statement
balance is computed by adding subsequent deposits to and subtracting
subsequent disbursements from the financial institution’s month-end
statement balance.
(c) Electronic records. Whenever the records required by this Rule
are created or maintained using electronic means, there must be an ability to
print a paper copy of the records upon a reasonable request to do so.
(d) Records to be maintained. Financial institution month-end
statements, any canceled checks or copies of canceled checks provided with
a financial institution month-end statement, duplicate deposit slips or deposit
receipts generated by the financial institution, and records created in
accordance with section (a) of this Rule shall be maintained for a period of
at least five years after the date the record was created.
- 28 -
Rule 1.1
The hearing judge found that “[w]ith respect to the A Better Wireless litigation in
Minnesota, the court finds that [R]espondent demonstrated a lack of competence in
violation of Rule 1.1.” In the A Better Wireless litigation, Respondent was sanctioned for
discovery violations.17 In addition, in the Order granting summary judgment to A Better
Wireless on all of Jalin’s claims, the judge stated that Respondent’s claims on behalf of
Jalin were “variously unsupported, insufficiently pled, and entirely without merit.” Jalin
Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC, 917 F. Supp. 2d 927, 931
(D. Minn. 2013). The court continued, “[t]he factual record before the Court is quite sparse,
due in large part to the conduct of Jalin’s counsel during discovery.” Id. These facts, when
taken together, provide clear and convincing evidence of Respondent’s violation of Rule
1.1 in the A Better Wireless litigation.
Rule 1.4(a)(3)
The hearing judge found that Respondent “failed, under Rule 1.4(a)(3) to comply
with reasonable requests for information during discovery.” Rule 1.4(a)(3) provides: “[a]
lawyer shall . . . promptly comply with reasonable requests for information[.]” We have
held that Rule 1.4(a)(3), “deals with an attorney’s communications with his or her client
and not his or her communication or lack of communication with the court.” Attorney
Grievance Comm’n v. Patton, 432 Md. 359, 377, 69 A.3d 11, 22 (2013). We cannot find
Jalin Realty Capital Advisors, LLC v. A Better Wireless, NISP, LLC v. Rhythm
17
Stone Media Group, LLC, No. 0:11-cv-00165-JRT-LIB (D. Minn. Feb. 22, 2012).
- 29 -
by clear and convincing evidence that Respondent’s conduct in discovery in this matter
stems from Respondent’s failure to communicate with Jackson. Thus, Respondent’s
conduct during discovery did not violate Rule 1.4(a)(3).
Rule 1.16(d)
Rule 1.16(d) requires that “[u]pon termination of representation, a lawyer shall take
steps to the extent reasonably practicable to protect a client’s interests, such as giving
reasonable notice to the client, allowing time for employment of other counsel,
surrendering papers and property to which the client is entitled . . . .” Respondent violated
Rule 1.16(d) by failing to send Jackson invoices and a complete copy of his file after
Jackson requested them on two occasions in January 2011 and February 2013.
Rule 3.1
Rule 3.1 states that “[a] lawyer shall not bring or defend a proceeding, or assert or
controvert an issue therein, unless there is a basis for doing so that is not frivolous, which
includes, for example, a good faith argument for an extension, modification or reversal of
existing law.” In Attorney Grievance Comm’n v. Culver, we concluded that “Respondent’s
conduct went well beyond the realm of zealous advocacy” when the hearing judge
concluded that:
Respondent engaged in a pattern of conduct of obstruction and delay to
interfere in [the client]’s suit against him. He filed suit against [the client],
alleging defamation, then failed to file written answers to discovery and
evaded attempts to be deposed. Respondent eventually voluntarily dismissed
that suit. After [the client] filed suit against Respondent, [Respondent] filed
a bankruptcy petition on the eve of the damages hearing in order to stay the
hearing.
- 30 -
381 Md. 241, 279, 263, 849 A.2d 423, 446, 436 (2004). The bankruptcy judge in Culver
concluded that “[t]his case is little more than a smoke screen. Whether it was filed in good
faith or not is debatable.” Id. at 280, 849 A.2d at 447. In the Order granting summary
judgment to A Better Wireless on all of Jalin’s claims, Chief United States District Court
Judge Tunheim stated that Respondent’s claims on behalf of Jalin were “variously
unsupported, insufficiently pled, and entirely without merit.” Jalin Realty Capital
Advisors, LLC v. A Better Wireless, NISP, LLC, 917 F. Supp. 2d 927, 931 (D. Minn. 2013).
Chief Judge Tunheim further noted in his Order:
Jalin did not file an answer to ABW’s counterclaims. After the Magistrate
Judge granted Jalin’s three requests to extend the deadline[], Jalin moved to
dismiss ABW’s counterclaims on a number of grounds that were each
rejected by this Court. See Jalin Realty Capital Advisors, 2012 WL 838439,
at *3 (“Jalin’s theories of dismissal are variously opaque and patently without
merit.”). The Court also warned Jalin’s counsel that one of its arguments
violated Fed. R. Civ. P. 11(b)(2) because it lacked factual support. See id. at
*4 (“Rooting a motion to dismiss for lack of personal jurisdiction in facts
that counsel conceded at oral argument to be false—namely that Rhythm and
Jalin are distinct corporate entities—is not acceptable under Rule 11.”).
Id. at 933, n. 3 (citations omitted). The court continued, “[t]he factual record before the
Court is quite sparse, due in large part to the conduct of Jalin’s counsel during discovery.”
Id.
Although Jalin initially asserted that, upon information and belief, A Better Wireless
never sent any loan application fee directly to Jalin, in its declaration, Jalin acknowledged
that it received $37,500 from Ride Ocean Zoom on behalf of A Better Wireless. Judge
Tunheim found that Respondent’s complaint “appears highly misleading for failing to
reference Ride Ocean Zoom’s role in the transaction.” We agree with the hearing judge’s
- 31 -
conclusion of law that Respondent’s conduct in the A Better Wireless litigation constitutes
a violation of Rule 3.1.
Rule 8.4
The hearing judge found multiple violations of Rule 8.4. Rule 8.4 provides, in
relevant part:
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Maryland Lawyers’ Rules of
Professional Conduct, knowingly assist or induce another to do so, or do so
through the acts of another;
***
(c) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice
....
For the reasons outlined in Section III, we do not agree with the hearing judge regarding
Respondent’s knowledge and assistance of Jackson’s criminal activity. Further, we do not
find by clear and convincing evidence that Respondent engaged in any conduct amounting
“dishonesty, fraud, deceit or misrepresentation.” Thus, Respondent did not violate Rule
8.4(c).
This Court finds, however, that the record demonstrates by clear and convincing
evidence that the Respondent violated Rule 8.4(d). We have stated that “[i]n general, an
attorney violates [Rule 8.4(d)] when his or her conduct impacts negatively the public’s
perception or efficacy of the courts or legal profession.” Attorney Grievance Comm’n v.
- 32 -
Rand, 411 Md. 83, 96, 981 A.2d 1234, 1242 (2009) (citations omitted). Respondent’s
conduct in the A Better Wireless litigation constitutes a violation of Rule 8.4(d). Thus, it
follows that Respondent violated Rule 8.4(a).
V. Sanction
We shall hold that the appropriate sanction in this case is an indefinite suspension
with the right to apply for reinstatement after 90 days. In addition, upon application for
reinstatement, Respondent must provide the Attorney Grievance Commission and Bar
Counsel with appropriate documentation showing the existence and maintenance of an
attorney trust account. We recognize the appropriate sanction for violations of the Rules of
Professional Conduct generally “depends on the facts and circumstances of each case,
including consideration of any mitigating factors.” Attorney Grievance Comm’n v.
Zuckerman, 386 Md. 341, 375, 872 A.2d 693, 713 (2005) (citations omitted). The purposes
of attorney discipline are as follows: “‘to protect the public, to deter other lawyers from
engaging in violations of the Maryland Rules of Professional Conduct, and to maintain the
integrity of the legal profession.’” Id. (quoting Attorney Grievance Comm’n v. Awuah, 374
Md. 505, 526, 823 A.2d 651, 663 (2003)). In Attorney Grievance Comm’n v.
Sheridan, 357 Md. 1, 741 A.2d 1143 (1999), we said:
Because ‘an attorney’s character must remain beyond reproach’ this Court
has the duty, since attorneys are its officers, to insist upon the maintenance of
the integrity of the bar and to prevent the transgressions of an individual
lawyer from bringing its image into disrepute. Disciplinary proceedings have
been established for this purpose, not for punishment, but rather as a catharsis
for the profession and a prophylactic for the public.
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Id. at 27, 741 A.2d. at 1157 (quoting Attorney Grievance Comm’n v. Deutsch, 294 Md.
353, 368–69, 450 A.2d 1265, 1273 (1982)).
When imposing sanctions, we have enunciated that, “‘[t]he public is protected when
sanctions are imposed that are commensurate with the nature and gravity of the violations
and the intent with which they were committed.’” Attorney Grievance Comm’n v.
Gore, 380 Md. 455, 472, 845 A.2d 1204, 1213 (2004) (emphasis added). As in every case,
we consider the nature of the ethical duties violated in light of any aggravating or mitigating
circumstances. Attorney Grievance Comm’n v. Sweitzer, 395 Md. 586, 598–99, 911 A.2d
440, 447–48 (2006). We also look to our past cases involving attorney discipline when
imposing sanctions. Attorney Grievance Comm’n v. Thompson, 376 Md. 500, 520, 830
A.2d 474, 486 (2003). Under the ABA standards, mitigating factors include:
Absence of a prior disciplinary record; absence of a dishonest or selfish
motive; personal or emotional problems; timely good faith efforts to make
restitution or to rectify consequences of misconduct; full and free disclosure
to disciplinary board or cooperative attitude toward proceedings;
inexperience in the practice of law; character or reputation; physical or
mental disability or impairment; delay in disciplinary proceedings; interim
rehabilitation; imposition of other penalties or sanctions; remorse; and
finally, remoteness of prior offenses.
Attorney Grievance Comm’n v. Taylor, 405 Md. 697, 721, 955 A.2d 755, 769 (2008)
(quoting Attorney Grievance Comm’n v. Glenn, 341 Md. 448, 488–89, 671 A.2d 463, 483
(1996)).
We note that mitigating circumstances exist in the case at bar. Respondent testified
before the hearing court that he erroneously relied on local counsel’s assurances that local
counsel would appear on his client’s behalf at the scheduling conference and motions
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hearing in the A Better Wireless matter. Respondent expressed remorse to the hearing court
and acknowledged that he was ultimately responsible, as lead counsel, for failing to appear
at both proceedings. Respondent paid the U.S. District Court’s imposed sanction of $1,610
to opposing counsel in that matter.
Respondent was a newly admitted attorney at the time of his representation of Jackson and
Jackson’s companies. Respondent was admitted the Bar in June of 2009. His representation
of Jackson and his companies spanned from 2010 to 2012. Respondent admitted to the
hearing court that he was engaged in matters that were “over [his] head” in relation to his
representation of Jackson and Jackson’s companies. Although Respondent had a prior
career in the import/export business, and he was fifty-six years old at the time of the hearing
in this matter, Respondent was, nonetheless, inexperienced in the unique challenges that
confront solo practitioners, and those in private practice, generally, during his
representation of Jackson and Jackson’s companies. Lastly, Mr. Samuel Hamilton, Esq., a
longtime member of the Maryland Bar, testified favorably before the hearing judge
regarding Respondent’s quality of character since Mr. Hamilton initially met Respondent
in 2010. The hearing judge expressly credited Mr. Hamilton’s testimony regarding
Respondent’s character.
This Court’s jurisprudence demonstrates that the appropriate sanction in the case at
bar is an indefinite suspension with the right to apply for reinstatement after 90 days.18 For
18
As a condition of reinstatement, upon application, Respondent must provide the
Attorney Grievance Commission and Bar Counsel with appropriate documentation
showing the existence and maintenance of an attorney trust account.
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example, in Attorney Grievance Comm’n v. Stillwell, we suspended indefinitely an
attorney, with the right to apply for reinstatement in no sooner than 60 days, for lack of
diligence in pursuing a client's matter, failing to keep the client reasonably informed about
the status of the representation, and failing to deposit an unearned retainer in a client trust
account, constituting violations of MLRPC 1.3, 1.4, and 1.15 respectively. 434 Md. 248,
274, 74 A.3d 728, 743 (2013). In determining the appropriate sanction, we noted as a
mitigating circumstance that the attorney fully cooperated with Bar Counsel and provided
all information that was required to assist in his investigation. Id. at 273, 74 A.3d at 732.
By contrast, in Attorney Grievance Comm’n of Maryland v. Patterson, 421 Md.
708, 28 A.3d 1196 (2011), we indefinitely suspended an attorney, with the right to reapply
for readmission no sooner than six months, for violations of Rules of Professional Conduct
involving trust accounts, failure to exercise diligence, and failure to communicate with a
client. See Id. at 743, 28 A.3d at 1216–17. The attorney in Patterson, committed each of
these violations multiple times with multiple clients. Id. Furthermore, in Patterson, the
attorney was found to have violated Rule 8.1 for failing to cooperate with Bar Counsel with
respect to two client complaints. See id. at 738–39, 28 A.3d at 1214. Unlike in Patterson,
Respondent in the case at bar did not commit a Rule 8.1 violation.
In other cases, where the offending attorney has mishandled client funds, but not as
a result of dishonest conduct, we have suspended the offending attorney indefinitely with
the right to apply for readmission after a period of time. For example, in Attorney
Grievance Comm’n v. Zuckerman, 386 Md. 341, 872 A.2d 693 (2005), the offending
attorney violated several rules of the MLRPC, including MLRPC 1.15, due to employee
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theft and ineffectual accounting procedures. Id. at 369, 872 A.2d 693, 710. We suspended
the attorney in that case indefinitely with the right to apply for readmission after 30 days,
noting inter alia the lack of intentionally dishonest conduct on the part of the offending
attorney. Id. at 386, 872 A.2d at 720. In Attorney Grievance Comm’n v. Sperling, 380 Md.
180, 844 A.2d 397 (2004), the attorney was found to have violated, among other Rules,
MLRPC 1.15, had been previously sanctioned, and was found to have operated a relatively
large negative balance to his client trust account (approximately $40,000), but was not
accused of dishonest conduct in relation to his handling of client funds. Id. at 193, 844 A.2d
at 405. In that case, we suspended Sperling indefinitely, with the right to apply for
readmission after 90 days. Id.
Respondent engaged in serious, wide-ranging misconduct, and violated numerous
MLRPC, two Maryland Rules, and one provision of the Code of Maryland. Specifically,
Respondent did not maintain an attorney trust account for over two years. He formed his
law practice and plainly ignored his responsibility to set up a trust account to hold
separately unearned client funds and funds for third parties. During that time, Respondent
maintained client funds and funds for third parties in his general bank account with Bank
of America.19
Further, Respondent engaged in behavior which prompted the U.S. District Court
for the District of Minnesota to personally sanction Respondent for his conduct during
19
For these reasons, we require that, upon reapplication for admission, Respondent
must provide appropriate documentation showing the existence and maintenance of an
attorney trust account.
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discovery. Magistrate Judge Brisbois found that Respondent’s conduct necessitated more
than just monetary sanctions, and further precluded Respondent’s clients—in any
subsequent proceedings in the case—from using any documents or other information that
was requested but not provided in the discovery responses. Within the scope of that same
litigation, Chief Judge Tunheim stated that Respondent’s conduct was unacceptable under
Rule 11 of the Federal Rules of Civil Procedure.
Considering the spectrum and degree of Respondent’s misconduct, in light of the
mitigating circumstances, we indefinitely suspend Respondent from the practice of law in
Maryland with the right to apply for reinstatement after 90 days. As a condition of
reinstatement, upon application, Respondent must provide the Attorney Grievance
Commission and Bar Counsel with appropriate documentation showing the existence and
maintenance of an attorney trust account.
IT IS SO ORDERED; RESPONDENT SHALL
PAY ALL COSTS AS TAXED BY THE
CLERK OF THIS COURT, INCLUDING
COSTS OF ALL TRANSCRIPTS,
PURSUANT TO MARYLAND RULE 19-
709(d), FOR WHICH SUM JUDGMENT IS
ENTERED IN FAVOR OF THE ATTORNEY
GRIEVANCE COMMISSION AGAINST
ANDREW NDUBISI UCHEOMUMU.
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