disciplinary handbook: volume v - Supreme Court - State of Ohio

Smith, Disciplinary Counsel v.
128 Ohio St.3d 390, 2011-Ohio-957. Decided 3/9/2011.
Case Summaries- 315
On April 24, 2009, respondent received an interim suspension pursuant to Gov.Bar R. V(5)(A)(4) based
upon his felony conviction for conduct in failing to accurately report income to the IRS, conspiring to
defraud the IRS, and corruptly endeavoring to obstruct and impede the ensuing IRS investigation.
Respondent employed by the Catholic Diocese of Cleveland from 1983 through February 17, 2004. He
began as treasurer, was promoted to chief financial officer, and was finally named financial and legal
secretary. A jury found him guilty of one count of conspiracy to defraud the IRS, four counts of
making false tax returns, and one count of corruptly endeavoring to obstruct and impede an IRS
investigation, but was acquitted of mail fraud and conspiracy to commit mail fraud, and the court
dismissed the money-laundering charges. In the late 1990s, respondent received a series of offers to go
into private or public practice, and in order to keep him, the priest who oversaw his employment offered
to pay him $250,000 per year, but said that the money could not go through the diocese payroll. To
conceal this money, respondent and his co-defendant whose company provided comptroller services
for the diocese moved the money from the church through the company into two businesses owned by
respondent. Respondent did not pay taxes on the compensation. The co- defendant while representing
respondent in a 1999 audit presented fraudulent documentation of expenses incurred by respondent and
falsely stated respondent had no other sources of income than those reported on his tax return.
Respondent admitted to engaging in conduct to conceal assets and failing to report income to the IRS.
Respondent was sentenced to one year and one day in federal prison, 150 hours of community service,
and $395,154 in restitution to the IRS. Respondent was released from federal prison to a half way
house for two months. He is currently on a two-year supervised release until January 2012. As of the
disciplinary hearing he has paid $2000 in restitution and upon conclusion of supervised release will enter
into a plan for continued restitution with the IRS. The panel and board found violations of DR 1-
102(A)(3), 1-102(A)(4), 1-102(A)(5), and 1-102(A)(6). The Court adopted the findings of fact and
misconduct. In aggravation, respondent acted with a dishonest or selfish motive and engaged in a
pattern of misconduct. BCGD Proc.Reg. 10(B)(1)(b) and (c). In mitigation, respondent had no prior
disciplinary record, made full and free disclosure and cooperated during the disciplinary proceedings,
presented evidence of good character and reputation, including letters from an auxiliary bishop of the
diocese, and has been subject to other penalties, including incarceration. BCGD Proc.Reg. 10(B)(2)(a),
(d), (e), and (f). The board recommended that respondent be indefinitely suspended with credit for time
served under his interim suspension. However, the board also recommended that any petition for
reinstatement be conditioned on respondent‘s completion of his federal supervised release and
consummation of a final restitution agreement with the IRS. The court considered Brunner (2001) and
Kellogg (2010). The Court adopted the board‘s recommended sanction and so ordered an indefinite
suspension with credit for time served under the interim suspension, but respondent shall not be permitted
to petition for reinstatement until he has completed his federal supervised release and entered into a
final agreement with the federal government for payment of restitution.
Rules Violated: DR 1-102(A)(3), 1-102(A)(4), 1-102(A)(5), 1-102(A)(6).
Aggravation: (b), (c)
Mitigation: (a), (d), (e), (f)
Prior Discipline: NO Procedure/ Process Issues: YES Criminal Conduct: YES
Public Official: NO Sanction: Indefinite Suspension