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In re Mason

September 02, 1999


The opinion of the court was delivered by: Morrison, Associate Judge

A Member of the Bar of the District of Columbia

On Exception of Respondent to Report and Recommendation of the Board on Professional Responsibility

Argued April 20, 199

This case is before us on exceptions to the Report and Recommendation of the Board on Professional Responsibility (the Board) recommending that Arthur D. Mason be disbarred from the practice of law in the District of Columbia. The Board found grounds for disbarment predicated on D.C. Code § 11-2503 (a) (1995) *fn2 and violations of the former Code of Professional Responsibility, including DR 1-102 (A)(3), DR 1-102 (A)(4), and DR 1-102 (A)(5). *fn3 The Board recommends further that such disbarment be imposed nunc pro tunc to April 23, 1993, and that Docket No. 93-BG-367, a reciprocal discipline case from the Massachusetts Bar, be dismissed in light of respondent's disbarment under D.C. Code § 11-2503 (a). We agree.

Hearing Committee Number Three and the Board both concluded that respondent violated D.C. Code § 11-2503 (a) and the three disciplinary rules by engaging in a complex series of business dealings with John Galanis, a convicted felon, and various Galanis-controlled entities over a period of several years. On the basis of these dealings, respondent was convicted in the Supreme Court of the State of New York for the misdemeanor offense of second degree offering a false instrument for filing. Subsequently, respondent was suspended from the practice of law in Massachusetts for three years.

We review the Board's recommendation in accordance with D.C. Bar R. XI, § 9 (g) (1998), which states that "the Court shall accept the findings of fact made by the Board unless they are unsupported by substantial evidence of record, and shall adopt the recommended Disposition of the Board unless to do so would foster a tendency toward inconsistent Dispositions for comparable conduct or otherwise would be unwarranted."

The specific conduct on which the Board's Conclusions are based is described in thoughtful detail in the reports submitted by both the Hearing Committee and the Board. We conclude that the Board's findings of fact are supported by substantial record evidence, and we adopt the Board's recommendations. The relevant portion of the Board's Report and Recommendation is attached hereto as an Appendix.


The first issue involves respondent's argument that the Board wrongly assessed the impact of the Hearing Committee's erroneous statement that "Respondent admitted to intentional fraud," (Hrg. Comm. Rpt. at 73), in his plea before the New York Supreme Court. In what he views as the primary defect in the Board's recommendation, respondent argues that this erroneous statement tainted the Hearing Committee's entire view of the evidence in such a way as to make accurate fact- finding on its part impossible.

Respondent was originally indicted in the Supreme Court of New York for an offense requiring proof of a specific intent to defraud. He pleaded guilty to a lesser included offense - that of offering a false instrument for filing in the second degree. This misdemeanor offense does not require proof of a specific intent to defraud. While it is true that the Hearing Committee's report does include the statement about respondent's guilty plea that he objects to, it also contains numerous, detailed findings of respondent's wrongdoing. It is clear from the first page of the Hearing Committee's report that it knew the crime respondent had been found guilty of in the New York matter did not involve moral turpitude per se. Because of this fact, the Hearing Committee realized that its task was to analyze the underlying facts and circumstances of respondent's conduct in order to determine whether this conduct did, in fact, rise to the level of moral turpitude. The Board's report indicates clearly that the incorrect statement in the Hearing Committee's report should be disregarded, and states further that it "does not believe that this language in the report is in any way determinative of the outcome in these matters. Bar Counsel's evidence of other fraudulent and dishonest activities is overwhelming and firmly supports the Hearing Committee's recommendation of disbarment." (Bd. Rpt. at 7.) Given the wealth of evidence of wrongdoing by respondent documented in the lengthy record before the Hearing Committee and the Hearing Committee's detailed findings, we agree with the Board that the record as a whole contains ample evidence supporting the notion that respondent's actions constitute moral turpitude. We are not persuaded by respondent's argument that the entire process was tainted by the Hearing Committee's misstatement about the elements of his misdemeanor plea in New York, and we find that respondent should be disbarred pursuant to D.C. Code § 11- 2503 (a).


The second issue involves the alleged violation of DR 1-102 (A)(5) of the former Code of Professional Responsibility. *fn4 Both the Hearing Committee and the Board found that respondent had violated three disciplinary rules, including DR 1- 102 (A)(5), and the Board concluded that these violations provide an independent rationale for imposing sanctions. (Bd. Rpt. at 13.) We accept the findings of the Board regarding DR 1-102 (A)(3) ("illegal conduct involving moral turpitude that adversely reflects on [respondent's] fitness to practice law") and DR 1-102 (A)(4) ("conduct involving dishonesty, fraud, deceit, or misrepresentation"). The Board's recommendation regarding the alleged DR 1-102 (A)(5) violation, however, requires additional consideration.

DR 1-102 (A)(5) states that a "lawyer shall not . . . engage in conduct that is prejudicial to the administration of Justice." The Hearing Committee found that respondent violated DR 1-102 (A)(5) when he "lied to the FHLBB [the Federal Home Loan Bank Board], under oath, during its investigation undertaken to determine whether the agency should approve the proposed change in control application [for CFS Corporation] and whether the Respondent and others previously had formed a control group without making the requisite disclosure." (Hrg. Comm. Rpt. at 83.) The Board agreed that respondent's actions in relation to the Federal Home Loan Bank Board's (FHLBB) investigation constituted a violation of DR 1-102 (A)(5). (Bd. Rpt. at 10.) We find that although respondent's conduct did not involve a court proceeding, it is appropriate nevertheless to view such conduct as prejudicial to the administration of Justice. *fn5

Our case law supports a somewhat expansive view of DR 1-102 (A)(5). As we stated in In re Alexander, 496 A.2d 244 (D.C. 1985), DR 1-102 (A)(5) "is a general rule that is purposely broad to encompass derelictions of attorney conduct considered reprehensible to the practice of law." Id. at 255 (citing the Board's adopted Appendix). We have also endorsed the notion that "conduct that is prejudicial to the administration of Justice" can be equated to "conduct unbecoming a member of the bar." *fn6 In re Solerwitz, 575 A.2d 287, 292 (D.C. 1990) (per curiam) (citing the Board's adopted Appendix). This broad reading is supported by the aim of DR 1-102 set forth in the Code of Professional Responsibility, which is to uphold the "integrity and competence of the legal profession." See In re Hopkins, 677 A.2d 55, 59 (D.C. 1996) (citing Canon 1 of the Code of Professional Responsibility). A DR 1-102 (A)(5) violation does not require that a specific court procedure be violated, nor does it require that a judicial body make an incorrect decision. Id. at 59-60. Such a violation also does not have to be affiliated specifically with the judicial decision-making process; the conduct simply must bear upon the administration of Justice. Id. at 60-61. *fn7

In Hopkins, we utilized three criteria to ascertain whether an attorney's conduct is prejudicial to the administration of Justice under DR 1-102 (A)(5). *fn8 Id. First, there must be an improper action or a failure to take a proper action. Hopkins, supra, 677 A.2d at 60-61. Second, "the conduct itself must bear directly upon the judicial process (i.e., the `administration of Justice') with respect to an identifiable case or tribunal." Id. at 61. The proceeding implicated by the conduct can be either judicial or quasi-judicial in nature. In re Keiler, 380 A.2d 119, 123 (D.C. 1977) (per curiam) (DR 1-102 (A)(5) violation involving private arbitration process), overruled in part on other grounds. Third, the conduct must "at least potentially impact upon the process to a serious and adverse degree." Hopkins, supra, 677 A.2d at 61.

Applying the above criteria to respondent's behavior, it seems clear that respondent's conduct satisfies the first requirement in Hopkins. He lied to a regulatory oversight board under oath about his business dealings. As we said in Hopkins, conduct can be considered improper "because it violates a specific statute, court rule or procedure, or other disciplinary rule, but, . . . it may be improper simply because, considering all the circumstances in a given situation, the attorney should know that he or she would reasonably be expected to act in such a way as to avert any serious interference with the administration of Justice." Id.

As to the second Hopkins requirement, we must ask whether respondent's conduct had a direct effect on the "judicial process . . . with respect to an identifiable case or tribunal." Id. In most cases, this question is a relatively simple one to answer, "where the attorney is acting either as an attorney or in a capacity ordinarily associated with the practice of law." Id. In this case involving respondent's actions with the FHLBB, the question arises whether the function of the FHLBB can be viewed as judicial or quasi-judicial in nature.

Although none of the materials before us provides a precise definition or description of the FHLBB, the record reveals important details about its work. *fn9 The FHLBB is a federal regulatory agency. (II Tr. at 20-21). *fn10 It has "an interest in assuring that any acquirer or controlling person of a federal [financial] institution had high integrity and would not use or manipulate the association to the detriment of the Federal Insurance Fund." (Id. at 17.) At least one of the FHLBB's duties is to oversee the stock sales of certain financial institutions. (Hrg. Comm. Rpt. at 5, 14, 18; Bar Counsel's "On Exception Of Respondent To Report And Recommendation Of The Board On Professional Responsibility" [hereinafter B. Couns. Br.], dated October 29, 1998, at 4.) This oversight duty is derived from § 17.30 (q) of the National Housing Act. (II Tr. at 15.) The FHLBB has the power to grant or deny stock purchase requests, and it may also fashion conditions that must be adhered to in order for a party to receive purchase approval. (Hrg. Comm. Rpt. at 19; II Tr. at 15.) The FHLBB conducts investigations of financial institutions. During the course of such investigations, the FHLBB receives sworn affidavits, (Hrg. Comm. Rpt. at 8), submits questions to individuals, (id. at 15-16), examines the financial records of institutions, (id. at 34), and takes depositions, (id. at 17). It has the power to oversee the bailout of financial institutions, (Hrg. Comm. Rpt. at 7), issue cease and desist orders, (id. at 37), reclassify loans, (id. at 38), and file civil actions against parties to prevent a violation of the "change in control provisions of federal statutes," (id. at 40-41).

We have upheld DR 1-102 (A)(5) violations in cases that do not involve a formal court setting. In the case of In re Hutchinson, 534 A.2d 919 (D.C. 1987) (en banc), we found a DR 1-102 (A)(5) violation where respondent testified, under oath, untruthfully before the Securities and Exchange Commission regarding a personal investment. Id. at 919-20. In the case of In re Keiler, supra, 380 A.2d at 119, we held that respondent violated DR 1-102 (A)(5) by selecting an interested party to serve as (what others assumed to be) a disinterested arbitrator in a private arbitration matter. We noted in Keiler that "harm results to the administration of Justice when the conduct of a judicial or quasi-judicial proceeding is such as to render that proceeding a bogus one." Id. at 123 (emphasis added). We conclude that the FHLBB serves a quasi-judicial function and that respondent's conduct affected its administration in a direct way, satisfying the second requirement in Hopkins.

We likewise find that the third Hopkins requirement, that the attorney's conduct "taint the judicial process in more than a de minimis way," is satisfied. Hopkins, supra, 677 A.2d at 61. Honesty, especially in officers of the court, has always been and ...

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