by Bruce A. Campbell
Attorneys searching for a silver lining could find a dark cloud of sanctions. There are many career options for non-practicing licensed attorneys. (See for example, 300+ Things You Can Do With A Law Degree.) Although non-lawyers working in these careers are not obligated to adhere to lawyer disciplinary rules, licensed attorneys are. To their great surprise, the non-practicing lawyers might find themselves subject to disciplinary action for conduct in careers outside of the practice of law.
An Example From The Federal Government
Politics is a popular career for non-practicing licensed attorneys. Often times it is a natural step to move from practicing law to making law.
At the Federal level, all Representatives must abide by the House Ethics Rules. Those who are lawyers must also, answer to their licensing State Bar. Bar Associations have sanctioned lawyer-politicians for actions committed while serving in government offices. Most notable:
What Is The Basis For Sanctions?
We can consider the current situation of Congressman Charles Rangel, who has been charged in Congress with, among other things, underreporting taxes. Congressman Wrangel's conduct could be sanctionable under New York Rule 8.04, which reads, in part,
A lawyer… shall not:
· · ·
(b) engage in illegal conduct that adversely reflects on the lawyer’s honesty, trustworthiness or fitness as a lawyer;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
Comment 2 to Rule 8.04 states,
Many kinds of illegal conduct reflect adversely on fitness to practice law. Although a lawyer is personally answerable to the entire criminal law, a lawyer should be professionally answerable only for illegal conduct that indicates lack of those characteristics relevant to law practice. Violations involving violence, dishonesty, fraud, breach of trust, or serious interference with the administration of justice are illustrative of illegal conduct that reflects adversely on fitness to practice law… A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate indifference to legal obligation.
Sanctions could be based on the same facts as the House Ethics Committee's allegations. For example, Congressman Rangel's alleged…
… failure to report rental income related to Punta Cana on his Federal income tax returns [is alleged to have] violated the Internal Revenue Code. (Statement Of Alleged Violation (SAV), ¶ 245, see ¶ 119-133 of the SAV for details regarding the Punta Cana rental)
Congressman Rangel responded formally to the Ethics Committee that he:
… acknowledged publicly, prior to the establishment of the Investigative Subcommittee, that his tax returns omitted rental income derived from his investment in the Punta Cana resort located in the Dominican Republic and that he had filed amendments and paid additional taxes. Congressman Rangel [advised that he] has done everything within his power to fulfill his legal obligations in this regard, and to the best of his knowledge, nothing further is required. (Statement p. 20)
He also stated on the House Floor:
The fact that there was negligence on the part of the person that for 20 years did it and the fact that I signed it, does not really give an excuse as to why I should not apologize to this body for not paying the attention to it that I should have paid to it. (Address 03:02:33)
Have Lawyers Been Sanctioned For Violating The Internal Revenue Code?
Lawyers have been sanction for violating the Internal Revenue Code. For example:
Aaron Bertel, a lawyer in New York State, received a three-year suspension for conspiracy to defraud the United States and the Internal Revenue Service and for filing fraudulent income tax returns. (268 A.D.2d 112, 706 N.Y.S2d 101)
Marie Klarman, a lawyer in New York State, received a one-year probation for knowingly filing a false personal income tax return in which she deducted mortgage interest that she was not entitled to deduct. (Klarman paid the additional taxes she owed.) (22 A.D.3d 953, 802 N.Y.S.2d 267)
Alberto Pirro, Jr., a lawyer in New York State, received a three-year suspension for several counts of tax evasion and tax fraud. (Pirro had an otherwise unblemished record, accepted full responsibility, and noted that the tax returns were prepared by a CPA.) (305 A.D.2d 22, 759 N.Y.S.2d 527)
Bonnie Strunk, a lawyer in New York State, was disbarred based on her felony tax conviction (Criminal Tax Fraud in the Fourth Degree, a class E felony, for failing to file her 2008 personal income tax return while having a tax liability in excess of $3,000).
A Warning for Non-Practicing Licensed Attorneys
Even if a lawyer is not engaged in the practice of law, he is still answerable to the entire criminal law. And, his conduct must not reflect adversely on his character or fitness to practice law, even if the conduct is not criminal. To the extent that a lawyer's character and fitness are called into question, he may find himself stripped of his law license, even if his non-lawyer counterparts would otherwise suffer no consequences.
Bruce A. Campbell is the managing director in the law firm of Campbell & Chadwick, P.C. He has defended lawyers and other professionals on a variety of malpractice and other tort claims for more than 25 years. He has published more than 50 articles and authors a blog about legal ethics. Mr. Campbell may be reached by email or at 972-277-8585.