Advising a “client” on how to move “grey money” into the U.S. has resulted in an agreed public censure in September for a New York attorney.  The lawyer (along with a number of others) was caught on video by Global Witness, a British-based public advocacy group.  But the sanction raises some questions regarding the imposition of discipline for conduct based on a pretextual situation.

The “client” was actually an undercover investigator who posed as a German lawyer and succeeded in getting appointments with 13 firms (out of 50 he tried) to supposedly get advice on behalf of an undisclosed African government official.  The question from the fake lawyer’s fake client:  how to launder funds described as “gray money” or “black money,” including by buying a New York brownstone, a jet and a yacht.

60 Minutes exposé

The video later aired on 60 Minutes.  (The section on the censured lawyer is here.)  We previously wrote about Global Watch’s sting operation, noting that the bad news was that some of the firms appeared to be on ethical thin ice in their interaction with the investigator (assuming the secret tapes accurately reflected their conduct).  The good news was that 37 firms didn’t schedule meetings with the fake prospect.  (And one lawyer who agreed to a meeting firmly rejected the bait, saying that “it ain’t for me,” and pointing out the Foreign Corrupt Practices Act.)

The American Bar Association’s response to the 60 Minutes segment is here.

Agreed censure for “counseling a client”?

Almost two years after the 60 Minutes piece, the censured New York lawyer entered into a discipline-by-consent agreement based on his meeting with the Global Witness actor.

Significantly, the main charge was counseling “a client to engage in conduct [the lawyer] knew was illegal or fraudulent,” in violation of New York’s version of Model Rule 1.2(d).

Of course, no lawyer should violate that rule.  But the brief opinion of the New York Appellate Division’s First Department reflects no acknowledgment that the person speaking to the censured lawyer was an actor, that there was no bona fide prospective “client,” and that there was never going to be any action taken in response to whatever comments the censured lawyer might have made.  Rather, the opinion speaks of the conduct occurring during “a meeting with a potential client.”

The lawyer’s misconduct was significantly mitigated, the First Department noted, by his cooperation, and the fact that it was a single “aberrational” incident in the lawyer’s 50-year career.  Those factors justified the relatively light sanction — a public censure.

Beware possible counseling traps

This case spotlights the knife-edge you sometimes walk in counseling clients — including that a disciplinary authority might view as sanctionable even conduct undertaken in response to a pretext where there is no actual client.

You can never “counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.”  But under Rule 1.2(d) you can and should “discuss the legal consequences of any proposed course of conduct with a client.”

And, as Comment [9] explains, you are not precluded “from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. … There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.”

The stakes now appear higher than ever in getting that distinction right.

  • John J. Mueller

    Karen,

    I agree with what I view as your implicit assertion: that the Attorney Grievance Committee for the First Department Appellate Division and the lawyer stipulated to, and the First Department Appellate Division adopted the stipulation to, a violation of an inapplicable rule: the person consulting with the lawyer never “consult[ed] with [the] lawyer [with an intent to form] a [real or meaningful] client-lawyer relationship …” Because the person consulting with the lawyer could never be a “prospective client” under New York Prof.Cond.R. 1.18, the person could never be a “client.”your assertion.

    Despite the agreement on the lawyer-client relationship issue, I think the “discipline plea bargain,” as I believe is true with the majority of negotiated dispositions, focused on the intended-and-agreed level of discipline—”public censure,” the New York equivalent of an Ohio public reprimand—rather than the nature of the offense underlying the discipline.

    I suppose the position on the lawyer-client relationship issue, suggests the possibility of a lawyer-discipline equivalent to the criminal-law entrapment-defense. But, first, remember the entrapment defense requires action by a “government agent” and the undercover investigator was never an agent of the New York government. Second, though no court has considered in any reported lawyer-discipline decision the availability of an entrapment defense to a charge of lawyer misconduct, the courts have uniformly rejected such a defense in the medical- and dental-licensing disciplinary-proceedings.

    Jack Mueller (Cincinnati)

  • John J. Mueller

    Karen,

    I became distracted when I enrolled in Disqus (so I could follow you on The Law for Lawyers Today), I forgot to add to my earlier comment that even though I doubt the lawyer violated New York Prof.Cond.R. 1.2(d), I believe the lawyer violated New York Prof.Cond.R. 8.4(a) (attempting to violate one of the rules by counseling a client on the means of engaging in illegal and deceptive conduct), 8.4(b) (engaging in illegal conduct that adversely reflects on the lawyer’s honesty, trustworthiness or fitness as a lawyer), and 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit or misrepresentation).

    Jack Mueller (Cincinnati)