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Booze, Bribery, and Conspiracy: Rhode Island Attorneys Behaving Badly

Thursday, September 19, 2013


Witness bribery, bank fraud, and embezzlement of client funds are among the crimes and misconduct committed by local attorneys who have been suspended, disbarred, or otherwise disciplined by the state Supreme Court in the past two years, a review of court records shows.

Those cited for discipline include an attorney caught in one of the most prominent local corruption cases, a former state senator who used his wife’s grandmother’s name to improperly obtain mortgages and loans, a lawyer implicated a decades-long scheme to defraud the federal government in millions, and others who improperly obtained money to fuel gambling or substance abuse addictions.

Click here to view the top ten cases of attorney misconduct in Rhode Island.

Stealing from clients most common offense

The most common offense is using client money held in escrow for personal use, according to Roger Williams University law professor Peter Margolies, who teaches professional ethics and responsibility and recently helped revise the state code of conduct for attorneys.

“People have issues which they are not able to fully handle. Those problems lead them astray and they lose perspective,” Margolies said. “They think more about the short-term issue that is pre-occupying them. It might be something like gambling. It might be substance abuse.”

Another common offense is lying in a professional context, Margolies added. Then there are those who commit crimes that are unrelated to their professional work, but call into question their integrity and credibility to continue practicing law, such as the South Kingstown attorney who left the scene of an accident earlier this year and later pled guilty to two felonies and a DUI.

Attorney: misconduct on the rise

Margolies said such cases are not unique to Rhode Island.

But another attorney says they have been on the rise in recent years.

One factor is the economic downtown, which created added financial pressures that drove some attorneys to misuse client funds, according to former state prosecutor Bob Craven. He also blames addictions to gambling, drinking, and drugs for the increase in cases.

Another cause: the steep rise in the number of attorneys in the state. When Craven was admitted to the bar in the early 1980s, there were roughly 3,000 attorneys in the state. Now, he says there are triple as many to contend for about the same amount for work. For both new attorneys trying to make it and veterans who have lost business, raiding client funds has sometimes seemed like the only way to make ends meet, according to Craven, now a state rep from North Kingstown who still practices law.

Most complaints from ‘people who are unhappy with their lawyers’

The state Supreme Court sets the rules for professional conduct and makes final decisions on how attorneys are disciplined. The Office of Disciplinary cases reviews allegations of misconduct—everything from “an attorney who allegedly does not return a client’s phone call to misappropriation of funds, and other behavior in between,” according to state judiciary spokesman Craig Berke.

Based upon the recommendations of the chief disciplinary counsel, David Curtin, the Supreme Court can suspend or disbar an attorney, issue a censure, or mandate community service or pro bono legal services.

Of the complaints that the state receives, those that end in discipline are “more the exception than the rule,” Berke said. Records for the past two terms show the court took disciplinary action against two dozen local attorneys.

“The overwhelming majority of complaints received by the Office of Disciplinary Counsel are from people who are unhappy with their lawyers, unhappy with the process, the progress of their cases, the time it is taking or responsiveness to phone calls from client to lawyer,” Berke said. “Many of these are worked out by the office without taking the step of opening a formal investigation or file. Sometimes all it takes is a phone call.”

A need for ‘lawyer police’

Both Margolies and Craven had nothing but good things to say about the job the court’s chief disciplinary counsel is doing. But both also agreed there is room for improvement. “No system is perfect and it’s hard to guard against human frailty,” Margolies said. “That’s one of the problems you encounter in Rhode Island.”

Craven said the disciplinary office needs more resources. “It’s necessary but probably to some degree understaffed, not necessarily with lawyers, but with resources to be proactive,” Craven said.

Craven proposes hiring investigators to uncover potential cases of misconduct, instead of how the office operates now—reacting to complaints about attorneys. Investigators, he said, also could serve as a deterrent to misbehavior. “Lawyers would know there are lawyer police out there,” Craven said.

He also thinks attorneys should not be entrusted with client funds. Often, an attorney will hold money for their clients in an escrow account. It could be from an insurance payout. It could be a settlement for a lawsuit. Or it could be money from the sale of a house. For some attorneys, the temptation to take some of the money for personal use—or to borrow against it—is just too great, Craven said.

Craven suggests a number of possible reforms. For example, he believes that banks should handle the transfer of money from the buyer to the seller of a house. Failing that, he says attorneys should get the money they hold for their clients bonded. That way, a client will be insured against a rogue lawyer who makes off with their money.

He also thinks an expanded state disciplinary office could conduct regular audits of local attorneys who hold large amounts of client funds in escrow.

Disbarment isn’t the end

Disbarment is the most serious penalty the state Supreme Court can impose for professional misconduct by an attorney.

But someone who has lost their law license still has a chance to get it back. “Under Supreme Court rules, a disbarred attorney may apply for reinstatement after five years,” Berke said. “There is a rigorous review process for reinstatement and there is no guarantee it will take place.”

“I think there’s a heavy burden in cases of egregious abuse,” Margolies said.

He said the court would be very skeptical of anyone attempting to get readmitted to the bar after being convicted of a major felony such as bribery or corruption. “That’s going to be a big job—a big sell job,” Margolies said.

A pattern of misbehavior also makes re-admittance to the bar an uphill battle, Margolies said. For those who have misused client funds repeatedly in order to fuel an addiction, he said justices will want to make sure the former attorney has fully recovered from it.

The longer the track record of misconduct, the harder it is to make a comeback, as former attorney Zvi Hershel Smith found out earlier this year. Smith was disbarred in 1998 after conviction on two counts of embezzlement. At the time he also had a record of three disciplinary actions with seven more pending.

In the intervening years, Smith had served his sentence, paid restitution to the victims, and spent time in Israel studying to become a rabbi, but the disciplinary counsel remained unconvinced that he should be readmitted, noting that he had paid back most of the money by raising money from donors and claimed that he was still entitled to some of the money anyway.

“Someone with that kind of lengthy track record is going to experience some difficulty trying to get readmitted to the bar—and justly so,” Margolies said.

Stephen Beale can be reached at [email protected]. Follow him on Twitter @bealenews


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Business as usual in good ole RI

Comment #1 by pearl fanch on 2013 09 19

Bring back public hangings!


Never Forget Benghazi 2012

Comment #2 by Killary Klinton on 2013 09 19

And what % of the GA are lawyers? Yes, these same creeps are in the GA and they put themselves above the law. It's a snake pit of incompetence in lawyer land RI.

Comment #3 by Gary Arnold on 2013 09 19

Gary- I hear you. There are a lot of good attorney's in this State. However, then there are those which have done nothing but beat the political drum to get something for themselves. Case in point, the banking crisis in the early 1990's. The GA and many attorney's knew well in advance of the problems with the State credit unions at the time and only a handful, with the inside scoop, were able to get their clients NCUA coverage before the plug was pulled. The rest of them ran for cover and only a handful were ever held accountable. But the good old taxpayers wound up paying the Federal Reserve back with interest over the next 10 years. Amazing, no the State Retirement System is underfunded due to the same lack of management by the same group of individuals.

Comment #4 by Jeff Crawford on 2013 09 19

GAry Arnold, you stole my thunder! The Gen ASSembly has a high percentage of lawyers...The leadership are all lawyers...Fox, Paiva Weed, Newberry, Nickolas Mattiello, the Majority leader....all of them and by the way, none gave up the 2% raise even though they all make 6 figure salaries. They are a bunch of self serving let's make a deal bunch....All of them were involved in 38 Studios and yet none of them are indicted or even questioned. What kind of woman is Paiva Weed to not allow subpoena power to get to the bottom of the scandalous 38 Studios debarcle. She is a coward for fearing the truth. As for Fox, he even tried to get away with not reporting a campaign fundraiser contribution. And what baout his role in the URI INternational institute for sport scam where millions were embezzled? What about his role in 38 studios, even promising the investors that RI would pay back the bonds...Who the he*** is he and Maria theresa Paiva Weed to give such assurances and yet they are still in power? Why do the people in their districts keep putting these people in? THese is why we need term limits by referendum. We have to force these lawyers out....They were so jealous of the pension plans of those who put in from their checks diligently that they had to vote with Gina Raimondo and pass her "cook the books with manipulative facts and figures" pension law screwing the middle classs big time. I still want to know when Mattiello, Paiva Weed and Fox will give up their 2% automatic raise when hundreds of RI people cannot even find a job in this corrupt state.... The lawyers run the General Assembly and it is about time the clueless who keep re electing them finally lose their power with TERM LIMITS by REFERENDUM. These lawyers have become complacent career politicians and need to go.....

Comment #5 by dis gusted on 2013 09 19

Stephen/Kate tell me the truth do you two ever sit around the office some days and say to each other what are we doing here in RI. On the other hand if all you wrote about was political coruption you would never run out of material if you stay here.

Comment #6 by Howard Miller on 2013 09 19

Its no surprise to me,that The little Rhody is rife with crime,thievery,misconduct of public officials and I could go on and on.I have had the misfortune of having lived in this hornets nest of slimebags.I have had my bicycles,motorcycles,car stereos,stolen even ripped off having a yard sale(go figure) I even was ripped off by A Firemen responding to a fire in my apartment on Charles st,In North Providence.The problem is no body stands up against this kind of behaviour, so it continues unabated. Here in Texas you get locked up or if your really lucky you get shot by the owner of the property your trying to steal.The fact that it goes up the food chain to lawyers and politicians is that they are still crooks but,just have bigger needs

Comment #7 by Steven Bennett on 2013 09 19

And when they can't steal from clients they run for political Office and steal from the Taxpayers.
The difference between a dead snake in the road and a dead lawyer......the skid marks before the snake

Comment #8 by happy harry101 on 2013 09 20

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