In the Matter of Fredrick Pfeiffer , 419 S.C. 165 ( 2017 )

THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of Fredrick Scott Pfeiffer, Respondent.
Appellate Case No. 2016-002456
Opinion No. 27703
Submitted January 12, 2017 – Filed February 15, 2017
DISBARRED
Lesley M. Coggiola, Disciplinary Counsel, and Barbara
M. Seymour, Deputy Disciplinary Counsel, both of
Columbia, for Office of Disciplinary Counsel.
Fredrick Scott Pfeiffer, of Greenville, pro se.
PER CURIAM: In this attorney disciplinary matter, the Office of Disciplinary
Counsel (ODC) and respondent have entered into an Agreement for Discipline by
Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary
Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court
Rules (SCACR). In the Agreement, respondent admits misconduct and consents to
disbarment. He requests that disbarment be imposed retroactively to June 15,
2012, the date of his interim suspension. In the Matter of Pfeiffer, 398 S.C. 591,
730 S.E.2d 855 (2012). Respondent further agrees to pay the costs incurred by
ODC and the Commission on Lawyer Conduct (the Commission) in the
investigation and prosecution of this matter within thirty (30) days of the
imposition of discipline. We accept the Agreement and disbar respondent from the
practice of law in this state, retroactive to the date of his interim suspension, and
order that he pay the costs incurred in the investigation and prosecution of this
matter within thirty (30) days of the date of this opinion.1 The facts, as set forth in
the Agreement, are as follows.
Facts
In the late 1990s, Arthur M. Field approached business partners with the idea of
forming a business to raise money from investors in South Carolina to send to an
out-of-state parent company to use for relending and real estate development. Mr.
Field and his partners created a parent company, Lancaster Resources Incorporated
(LRI), in New Jersey and its subsidiary, Capital Investment Funding, LLC (CIF),
in South Carolina for this purpose. CIF was primarily managed by Mr. Field. CIF
collected millions of dollars from South Carolina investors and then lent that
money to LRI, which in turn re-lent that money to out-of-state borrowers.
In 1998 or 1999, respondent met Mr. Field in a social setting. Subsequently,
respondent began to represent CIF as a client.
In 2002, respondent and Mr. Field formed a company, Cosimo, LLC (Cosimo), for
the purpose of re-lending money from CIF. The plan was as follows: Cosimo
would enter into a loan agreement with a borrower agreeing to lend money to the
borrower in return for a note and mortgage on real property; Cosimo would then
enter into a loan agreement with CIF where CIF agreed to loan Cosimo the same
amount for use in making the loan to the borrower; CIF would make the loan to
Cosimo simultaneously with Cosimo making the loan to the borrower, and CIF
would receive a note from Cosimo along with a conditional assignment of the note
and mortgage from Cosimo to the borrower.
Respondent and Mr. Field were co-managers of Cosimo. During this time,
respondent (or entities in which he had an ownership interest) had 50% ownership
interest in Cosimo. In addition, respondent served as legal counsel for Cosimo.
Respondent provided legal services to Cosimo in exchange for his 50% ownership
interest in the company. Respondent's legal fees were therefore tied to the value
and profitability of the company, making his fee contingent on the success of
Cosimo's operations.
1
In addition, the Court grants ODC's Motion to Dismiss the allegations concerning
"the Loprieno Complaint" in the Amended Formal Charges.
For several years, respondent and Mr. Field perpetuated a scheme involving
misrepresentations to investors, Mr. Field's business partners, and South Carolina
state agencies. The details of that scheme are set forth in a 2012 South Carolina
State Grand Jury indictment charging respondent and Mr. Field with conspiracy,
securities fraud, and forgery.
On September 18, 2013, respondent pled guilty to two counts of securities fraud
and one count of conspiracy in connection with his dealings with Mr. Field, CIF,
Cosimo, and various other entities. Respondent was sentenced to ten years in
prison, suspended to six years with the last two years of the sentence to be served
on house arrest, followed by five years of probation.
Law
Respondent admits that by his conduct he has violated the following provisions of
the Rules of Professional Conduct, Rule 407, SCACR: Rule 1.2(d) (lawyer shall
not counsel client to engage, or assist client, in conduct that lawyer knows is
criminal or fraudulent); Rule 1.7 (lawyer shall not represent client if representation
involves concurrent conflict of interest; concurrent conflict of interest exists if
there is significant risk that representation of client will be materially limited by
lawyer's personal interest); Rule 1.8(a) (lawyer shall not enter into business
transaction with client or knowingly acquire an ownership or other pecuniary
interest adverse to client unless: transaction and terms on which lawyer acquires
interest are fair and reasonable to client and are fully disclosed and transmitted in
writing in manner that can be reasonably understood by client; client is advised in
writing of desirability of seeking and is given reasonable opportunity to seek
advice of independent legal counsel on transaction; and client gives informed
consent, in writing signed by client, to essential terms of transaction and lawyer's
role in transaction, including whether lawyer is representing client in transaction);
Rule 1.13(b) (if lawyer for organization knows that officer or other person
associated with organization is engaged in action that is violation of law which
reasonably might be imputed to organization and likely to result in substantial
injury to organization, lawyer shall proceed as is reasonably necessary in best
interest of organization); Rule 2.1 (in representing client, lawyer shall exercise
independent professional judgment and render candid advice; in rendering advice,
lawyer may refer not only to law but to other considerations such as moral,
economic, social factors, relevant to client's situation); Rule 4.1(a) (in course of
representing client, lawyer shall not knowingly make false statement of material
fact or law to third person); Rule 4.1(b) (in course of representing client, lawyer
shall not knowingly fail to disclose material fact when disclosure is necessary to
avoid assisting criminal or fraudulent act by client); Rule 8.4(b) (it is professional
misconduct for lawyer to commit criminal act that reflects adversely on lawyer's
honesty, trustworthiness or fitness as lawyer in other respects); Rule 8.4(c) (it is
professional misconduct for lawyer to commit criminal act involving moral
turpitude); Rule 8.4(d) (it is professional misconduct for lawyer to engage in
conduct involving dishonesty, fraud, deceit or misrepresentation); and Rule 8.4(e)
(it is professional misconduct for lawyer to engage in conduct prejudicial to
administration of justice).
Respondent also admits he has violated the following Rules for Lawyer
Disciplinary Enforcement, Rule 413, SCACR: Rule 7(a)(1) (it shall be ground for
discipline for lawyer to violate Rules of Professional Conduct); Rule 7 (a)(4) (it
shall be ground for discipline for lawyer to be convicted of crime of moral
turpitude or serious crime); Rule 7(a)(5) (it shall be ground for discipline for
lawyer to engage in conduct tending to pollute administration of justice or bring
courts or legal profession into disrepute or conduct demonstrating unfitness to
practice law); and Rule 7(a)(6) (it shall be ground for discipline for lawyer to
violate oath of office taken to practice law in this state).
Conclusion
We accept the Agreement for Discipline by Consent and disbar respondent from
the practice of law in this state, retroactive to June 15, 2012, the date of his interim
suspension. Within thirty (30) days of the date of this opinion, respondent shall
pay the costs incurred by ODC and the Commission in the investigation and
prosecution of this matter. Within fifteen (15) days of the date of this opinion,
respondent shall file an affidavit with the Clerk of Court showing that he has
complied with Rule 30 of Rule 413, SCACR, and shall also surrender his
Certificate of Admission to the Practice of Law to the Clerk of Court.
DISBARRED.
BEATTY, C.J., KITTREDGE and HEARN, JJ., concur. FEW, J., not
participating.