Disciplinary Counsel v. Pappas (Slip Opinion) , 141 Ohio St. 3d 1 ( 2014 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Disciplinary Counsel v. Pappas, Slip Opinion No. 2014-Ohio-3676.]
NOTICE
This slip opinion is subject to formal revision before it is published in
an advance sheet of the Ohio Official Reports. Readers are requested
to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
65 South Front Street, Columbus, Ohio 43215, of any typographical or
other formal errors in the opinion, in order that corrections may be
made before the opinion is published.
SLIP OPINION NO. 2014-OHIO-3676
DISCIPLINARY COUNSEL v. PAPPAS.
[Until this opinion appears in the Ohio Official Reports advance sheets,
it may be cited as Disciplinary Counsel v. Pappas,
Slip Opinion No. 2014-Ohio-3676.]
Attorneys—Misconduct—Felony conviction for making false statement to federal
authorities—Affidavit known to be false filed in court of law—False
statement to disciplinary authority—Violation of multiple Rules of
Professional Conduct—Two-year suspension with no credit for time
served under interim felony suspension.
(No. 2013-1625—Submitted December 11, 2013—Decided September 4, 2014.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 2012-089.
____________________
Per Curiam.
{¶ 1} Respondent, George Zane Pappas of Urbana, Ohio, Attorney
Registration No. 0033674, was admitted to the practice of law in Ohio in 1986. In
December 2007, we suspended Pappas’s license for failing to register but
SUPREME COURT OF OHIO
reinstated him the following day. In re Attorney Registration Suspension of
Pappas, 116 Ohio St. 3d 1420, 2007-Ohio-6463, 877 N.E.2d 305; In re Pappas,
116 Ohio St. 3d 1498, 2008-Ohio-290, 880 N.E.2d 97. In November 2011, we
suspended him again for failing to register. In re Attorney Registration
Suspension of Pappas, 130 Ohio St. 3d 1420, 2011-Ohio-5627, 956 N.E.2d 310.
We sanctioned him in December 2011 for failure to comply with the continuing-
legal-education requirements of Gov.Bar R. X. In re Pappas, 130 Ohio St. 3d
1505, 2011-Ohio-6770, 959 N.E.2d 2.
{¶ 2} On August 22, 2012, we imposed an interim felony suspension on
him pursuant to Gov.Bar R. V(5)(A)(4) after receiving notice that he had been
convicted of making a false statement to federal authorities. In re Pappas, 132
Ohio St. 3d 1497, 2012-Ohio-3775, 973 N.E.2d 266. The 2011 and 2012
suspensions remain in effect.
{¶ 3} In December 2012, relator, disciplinary counsel, charged Pappas
with violations of the Disciplinary Rules of the Code of Professional
Responsibility based on his criminal conviction and for allegedly making the
same false statement to a court and to relator.1 Relator and Pappas entered into a
comprehensive list of stipulations of fact and misconduct, but they could not
agree on the appropriate sanction. After a hearing, a three-member panel of the
Board of Commissioners on Grievances and Discipline determined that the
parties’ stipulations were supported by clear and convincing evidence and
recommended that Pappas serve a two-year suspension from the practice of law
with credit for time served under his interim felony suspension. The board
adopted the panel’s report in its entirety, and no party has filed objections to the
board’s recommendation.
1
Relator charged Pappas with misconduct under the applicable Disciplinary Rules for acts
occurring before February 1, 2007, the effective date of the Rules of Professional Conduct, which
superseded the Disciplinary Rules of the Code of Professional Responsibility.
2
January Term, 2014
{¶ 4} Upon our review of the record, we accept the board’s findings of
fact and misconduct and agree that a two-year suspension is the appropriate
sanction in this case. However, we do not credit Pappas with the time he has
served under this interim felony suspension.
Misconduct
{¶ 5} Between 1995 and 2010, Pappas was a sole practitioner in Urbana,
focusing primarily on criminal-defense work. In February 2004, Pappas’s law-
school classmate and long-time best friend, Aristotle Matsa, was in the midst of a
divorce. According to Pappas, Matsa told him that his ex-wife was attempting to
“take everything and destroy him.” Matsa therefore requested that Pappas falsely
claim ownership of Matsa’s Columbus law firm in order to prevent Matsa’s ex-
wife from obtaining firm records. Pappas agreed and executed an affidavit, which
was filed in Matsa’s divorce case in an effort to quash a subpoena. In the
affidavit, Pappas averred:
2. I am the sole shareholder and principal in charge of the
Law Offices of Aristotle R. Matsa, A Legal Professional
Association, which [is] referred to by some as the Law Offices of
Aristotle R. Matsa, and have been such from the date of the
creation of this entity through the present.
3. It has recently come to my attention that someone has
attempted to subpoena banking records relating to the entity
referred to in item 2 above. I believe that any such attempt is in
clear violation of my rights, and the attorney client privilege, as
well as other statutory and common law rights.
4. The attempt to delve into my/my entity’s banking
records is intended to intimidate and harass me and my clients.
Any release of such records would cause my clients, me, and my
3
SUPREME COURT OF OHIO
entity irreparable harm. It would obviously be a violation of
privacy as well given that I have no interest in the above captioned
case.
5. As Mr. Golden and his firm well know, I do represent
the Plaintiff [Matsa] in another civil case and it is my belief that
this action by Mr. Golden is intended to damage, harass, and
intimidate me and my practice; and to attempt to gain privileged
information that his firm might use in an unrelated lawsuit wherein
I represent the Plaintiff and others.
Despite these averments, Pappas had in fact never had any ownership interest in
Matsa’s law firm.
{¶ 6} Two months later, in April 2004, relator sent Pappas a letter of
inquiry requesting information regarding his alleged acquisition of Matsa’s law
practice. Pappas responded in writing and falsely stated that he had been the sole
and/or primary shareholder of Matsa’s law firm since 1987. Pappas further stated
that in “an abundance of caution,” he was changing the name to the “Law Offices
of George Z. Pappas, L.P.A.” Based upon Pappas’s false representations, relator
terminated its investigation.
{¶ 7} Apparently unbeknownst to Pappas, Matsa had been carrying out a
tax-fraud scheme for nearly three decades. According to the parties’ stipulations,
Matsa had set up a complex web of shell C-corporations, trusts, limited-liability
companies, churches, and other nominee entities purportedly owned or associated
with others. Matsa’s criminal scheme led to a federal investigation by the Internal
Revenue Service (“IRS”) and the United States Justice Department for alleged tax
fraud, money laundering, and conspiracy to obstruct justice.
{¶ 8} As part of that investigation, IRS agents interviewed Pappas in
August 2006. During that interview, Pappas again falsely stated that he was the
4
January Term, 2014
owner of Matsa’s law firm. The IRS then served Pappas with two subpoenas—
one for his personal appearance before the federal grand jury in September 2006
and the other as the custodian of records for a long list of entities, including
Matsa’s law firm. On September 19, 2006, Pappas appeared before the grand jury
and falsely stated, under oath, that he was the owner of Matsa’s Columbus law
firm. Immediately following that testimony, Pappas sent a letter to the
Department of Justice stating, again, that he was the owner of Matsa’s law
practice, that he had always been the sole shareholder of the firm, and that many
of the entities listed on the subpoena were not associated with Matsa but were
clients of Pappas’s law practice.
{¶ 9} Within months after sending the September 2006 letter, Pappas
agreed to take responsibility for his lies and began cooperating with federal
authorities. The federal prosecutor later stated that Pappas’s cooperation proved
significant in obtaining a search warrant of Matsa’s law office in 2007 and in the
government’s investigation of Matsa. On December 10, 2009, Pappas signed a
confidential plea agreement with the federal government, and in February 2010,
he waived his right to indictment and pled guilty to a charge of making a false
statement under 18 U.S.C. 1001, based on the false statements he had made in the
September 2006 letter to the Department of Justice. Pappas reported his
misconduct to relator and closed his Urbana law office. At some point thereafter,
he began working as a part-time line cook at a restaurant chain, where he
continued to work at the time of his disciplinary hearing.
{¶ 10} Matsa’s criminal trial did not occur until April 2012. Pappas met
with government agents and investigators numerous times before trial, and he
testified against his former friend in pretrial hearings and at trial. Pappas’s
cooperation was described as instrumental in assisting the prosecution, and Matsa
was ultimately convicted of multiple felonies and sentenced to 85 months in
prison.
5
SUPREME COURT OF OHIO
{¶ 11} In June 2012, a federal judge convicted Pappas of making a false
statement based on his 2010 guilty plea and sentenced him to probation for one
year, including four months of home confinement, along with a $100 fine and a
$100 assessment. The parties here stipulated, and the board found, that Pappas
did not financially benefit from his false representations regarding his ownership
of Matsa’s law firm, and no evidence established that Pappas was even aware of
Matsa’s illegal activity. Indeed, in its sentencing memorandum in Pappas’s
federal case, the government stated the following:
Matsa’s aim was to obstruct the fact that he (Matsa)
controlled all the entities and was the mastermind behind the
fraudulent tax filings, not only of the corporate law firm, but of the
other corporate and trust entities which he controlled. Pappas’ aim
was to conceal his prior lie to the divorce court and to the Ohio
Supreme Court and to again help his best friend out of a jam he
perceived to have been created by Matsa’s ex-wife. Pappas did not
financially benefit from his conduct. In fact, there is no evidence
that Pappas knew of Matsa’s illegal conduct involving the clients,
the corporations or the trusts.
The district court judge agreed, stating at Pappas’s sentencing hearing that Pappas
was essentially “taken advantage of by a friend who was involved in a much more
aggravated and criminal scheme than what [Pappas] involved himself with.”
{¶ 12} Based on these facts, we agree with the board’s findings of
misconduct in this case. In count one, Pappas’s false statements to federal
authorities, which led to his criminal conviction, violated DR 1-102(A)(4)
(prohibiting a lawyer from engaging in conduct involving dishonesty, fraud,
deceit, or misrepresentation), 1-102(A)(5) (prohibiting a lawyer from engaging in
6
January Term, 2014
conduct that is prejudicial to the administration of justice), and 1-102(A)(6)
(prohibiting a lawyer from engaging in conduct that adversely reflects on the
lawyer’s fitness to practice law). In count two, Pappas’s false statements in
response to relator’s 2004 letter of inquiry violated DR 1-102(A)(4), 1-102(A)(5),
and 1-102(A)(6). And in count three, Pappas’s execution of the false affidavit in
Matsa’s 2004 divorce proceeding violated DR 1-102(A)(4), 1-102(A)(5), 1-
102(A)(6), 7-102(A)(4) (prohibiting a lawyer from knowingly using perjured
testimony or false evidence in his or her representation of a client), and 7-
102(A)(5) (prohibiting a lawyer from knowingly making a false statement of fact
in his or her representation of a client).
Sanction
{¶ 13} When imposing sanctions for attorney misconduct, we consider
several relevant factors, including the ethical duties that the lawyer violated and
the sanctions imposed in similar cases. Stark Cty. Bar Assn. v. Buttacavoli, 96
Ohio St. 3d 424, 2002-Ohio-4743, 775 N.E.2d 818, ¶ 16. In making a final
determination, we also weigh evidence of the aggravating and mitigating factors
listed in BCGD Proc.Reg. 10(B). Disciplinary Counsel v. Broeren, 115 Ohio
St.3d 473, 2007-Ohio-5251, 875 N.E.2d 935, ¶ 21. However, because each
disciplinary case is unique, we are not limited to the factors specified in BCGD
Proc.Reg. 10(B) and may take into account all relevant factors in determining
which sanction to impose.
Aggravating and mitigating factors
{¶ 14} In aggravation, the board found that Pappas acted with a dishonest
or selfish motive—not for financial gain, but to protect his friend—and that he
engaged in a pattern of misconduct. See BCGD Proc.Reg. 10(B)(1)(b) and(c).
We concur, and also note that Pappas has prior discipline for failing to register as
an attorney. See BCGD Proc.Reg. 10(B)(1)(a).
7
SUPREME COURT OF OHIO
{¶ 15} In mitigation, the board determined that Pappas (1) eventually
made a good-faith effort to rectify the consequences of his misconduct, (2)
cooperated in the disciplinary investigation, after making the initial
misrepresentation in 2004, (3) has a “reputation for good character” and a history
as a “sensitive criminal attorney serving a constituency who benefits from his
services,” and (4) has been subject to other penalties, including successful
completion of a term of home confinement and probation and payment of a fine
and assessment. See BCGD Proc.Reg. 10(B)(2)(c), (d), (e), and (f). The board
also determined that Pappas had displayed “immense remorse,” acknowledged the
wrongful nature of his misconduct, and had not benefited financially in any way
from his misconduct.
{¶ 16} We agree that these mitigating factors are present here, and we
defer to the panel’s credibility determinations regarding Pappas’s level of remorse
and his reputation. See Cuyahoga Cty. Bar Assn. v. Wise, 108 Ohio St. 3d 164,
2006-Ohio-550, 842 N.E.2d 35, ¶ 24 (“Unless the record weighs heavily against a
hearing panel’s findings, we defer to the panel’s credibility determinations,
inasmuch as the panel members saw and heard the witnesses firsthand”).
Applicable precedent
{¶ 17} The parties submitted a number of cases to the board involving
attorneys whose misconduct resulted in felony convictions, with sanctions ranging
from a two-year suspension, with credit for time served under the interim felony
suspension, to an indefinite suspension without credit for time served. See, e.g.,
Disciplinary Counsel v. Blaszak, 104 Ohio St. 3d 330, 2004-Ohio-6593, 819
N.E.2d 689 (two-year suspension, with credit for time served, for an attorney
convicted of offering to sell testimony in exchange for $500,000); Disciplinary
Counsel v. Margolis, 114 Ohio St. 3d 165, 2007-Ohio-3607, 870 N.E.2d 1158
(two-year suspension, without credit for time served, for an attorney convicted of
federal antitrust violations that affected between $37.5 million and $100 million
8
January Term, 2014
in bid rigging); Disciplinary Counsel v. Bennett, 124 Ohio St. 3d 314, 2010-Ohio-
313, 921 N.E.2d 1064 (indefinite suspension, with credit for time served, for an
attorney convicted of illegally structuring financial transactions in an amount of
$124,300 to evade federal currency-transaction reporting requirements);
Disciplinary Counsel v. Smith, 128 Ohio St. 3d 390, 2011-Ohio-957, 944 N.E.2d
1166 (indefinite suspension, with credit for time served, for an attorney convicted
of making false tax returns, conspiring to defraud the IRS, and corruptly
endeavoring to obstruct and impede an IRS investigation); Disciplinary Counsel
v. Camera, 68 Ohio St. 3d 478, 628 N.E.2d 1353 (1994) (indefinite suspension,
without credit for time served, for an attorney convicted of perjury for signing a
false affidavit at a sheriff’s sale; the affidavit stated that the attorney was not
acting on behalf of the client whose forfeited property was being sold due to her
conviction in a criminal matter, but the attorney was in fact acting on that client’s
behalf).
{¶ 18} The board found several distinctions between Pappas’s conduct
and the conduct of the attorneys in these cases. For example, the board
determined that Pappas’s misconduct—“telling the same lie on three separate
occasions”—was less severe than the misconduct in Blaszak and Margolis and not
as frequent or as complex as the misconduct in Bennett and Smith. Similarly, the
board noted that unlike the attorneys in Blaszak, Bennett, and Smith, Pappas was
not motivated by any personal financial gain, and in contrast to the attorney in
Margolis, Pappas showed “immense remorse” and took responsibility for his
actions. As to Camera, the board concluded that because this court’s opinion did
not discuss aggravating and mitigating factors, the board could not determine
whether the facts in Pappas’s case warranted the same sanction as that imposed in
Camera.
{¶ 19} The board found that its recommended sanction of a two-year
suspension was supported by Disciplinary Counsel v. Derryberry, 54 Ohio St. 3d
9
 SUPREME COURT OF OHIO
107, 561 N.E.2d 926 (1990). In that case, the attorney was convicted of perjury
after testifying that, while serving as a bankruptcy trustee, he had not received
certain creditor contributions given to a third party. But in fact, the third party
had given the trustee-attorney at least one creditor’s check, apparently as part of a
$27,500 personal loan. Id. at 108. In mitigation, the board had stressed the
attorney’s character evidence, his 17 years’ experience as a trustee in bankruptcy
actions, his active civic participation, and his near-completion of his criminal
sentence of three years’ probation. Id. at 108. This court accepted the board’s
recommended sanction of a two-year suspension with credit for time served under
the interim felony suspension. Id. at 109.
{¶ 20} Based on this precedent, and its belief that the “significant number
of mitigating factors” in Pappas’s case were of “overriding importance,” the board
determined that “[b]eyond any term suspension there is no valid reason to believe
that the public needs to be protected from [Pappas’s] practicing law.”
Accordingly, it recommended that Pappas serve a two-year suspension, with
credit for time served during the interim felony suspension.
{¶ 21} We agree with the board that the relevant precedent—especially
Derryberry—supports a two-year suspension from the practice of law. Pappas’s
misconduct was not as egregious as the attorneys in Smith or Bennett, who both
engaged in complex schemes to defraud the IRS for personal gain and, as a result,
received indefinite suspensions. Given the facts and significant mitigating factors
here, a lesser sanction than in Smith or Bennett is warranted. However, Pappas
was not only convicted of making a false statement to federal authorities, he also
made the same false statement to a court and to relator. “Such conduct strikes at
the very core of a lawyer’s relationship with the court * * *. Respect for our
profession is diminished with every deceitful act of a lawyer.” Disciplinary
Counsel v. Fowerbaugh, 74 Ohio St. 3d 187, 190, 658 N.E.2d 237 (1995).
10
January Term, 2014
Accordingly, we decline to credit Pappas for the time served under his interim
felony suspension.
Conclusion
{¶ 22} For the reasons explained above, George Zane Pappas is suspended
from the practice of law in Ohio for two years, with no credit for time served
under his interim felony suspension. Costs are taxed to Pappas.
Judgment accordingly.
O’CONNOR, C.J., and PFEIFER, LANZINGER, KENNEDY, FRENCH, and
O’NEILL, JJ., concur.
O’DONNELL, J., dissents.
____________________
O’DONNELL, J., dissenting.
{¶ 23} Respectfully, I dissent.
{¶ 24} The egregious conduct Pappas engaged in, particularly with
respect to IRS agents, and his testimony before a grand jury and representations to
the Department of Justice adversely affect the administration of justice.
{¶ 25} In this case, Pappas executed an affidavit, knowing that it would be
filed in the Domestic Relations Division of the Franklin County Common Pleas
Court, falsely claiming ownership in Aristotle Matsa’s law practice in an effort to
quash a subpoena. He made false representations to relator, he falsely told IRS
agents that he was the owner of Matsa’s law firm, he appeared before a federal
grand jury and falsely testified under oath that he was the owner of Matsa’s law
firm, and after that testimony, he sent a letter to the Department of Justice,
representing again that he was the owner of Matsa’s law practice, that he had
always been the sole shareholder of the firm, and that many of the entities listed
on the subpoena were not associated with Matsa but were clients of his law
practice. After signing a confidential plea agreement with federal authorities,
11
SUPREME COURT OF OHIO
Pappas reported his misconduct to relator. A federal district court convicted him
of making a false statement to federal authorities.
{¶ 26} In Disciplinary Counsel v. Fowerbaugh, 74 Ohio St. 3d 187, 190,
658 N.E.2d 237 (1995), we stated that a
lawyer who engages in a material misrepresentation to a court
* * * violates, at a minimum, the lawyer’s oath of office that he or
she will not “knowingly * * * employ or countenance any * * *
deception, falsehood, or fraud.” Gov.Bar R. I(8)(A). Such
conduct strikes at the very core of a lawyer’s relationship with the
court * * *. Respect for our profession is diminished with every
deceitful act of a lawyer.
In this case, Pappas made repeated material misrepresentations.
{¶ 27} The board determined that he acted with a dishonest or selfish
motive and that he engaged in a pattern of misconduct.
{¶ 28} In my view, a two-year suspension with no credit for time served
under the interim felony suspension is not an appropriate sanction.
{¶ 29} I would disbar him from the practice of law.
____________________
Donald M. Scheetz, Senior Assistant Disciplinary Counsel, for relator.
Kegler Brown Hill & Ritter, Geoffrey Stern and Rasheeda Khan, for
respondent.
_________________________
12