The article below “Helping victims of lawyer dishonesty” was written by SUSAN HUMISTON, director of the MN Office of Lawyers Professional Responsibility and Client Securities Board.
Humiston took over the throne after Martin Cole retired in 2015, after nearly 10 years as director of the OLPR. ‘That’s a terrible job’: How this lawyer ended up director of the OLPR
(Can she really write that with a straight face? This is essentially an empty promise unless they have a political reason to go after the lawyer.)
Thirty years ago the Minnesota Supreme Court established the Client Security Fund to provide a funding source to pay victims of intentional lawyer dishonesty. It appears the genesis of the fund was the significant losses caused by two attorneys, Mark Sampson and John Flanagan, both of whom were disbarred in the late 1980s for misappropriation of client funds. The fund was initially created by a one-time $100 assessment of all lawyers (and a $145,000 gift from the Minnesota State Bar Association’s then-client security fund), and proved somewhat controversial to the extent that some lawyers did not like being required to pay money to cover the misconduct of other lawyers. (The legal profession stands alone in creating a voluntary system of restitution. Lawyers-unlike other professionals with access to client funds, such as stockbrokers and bankers-are not required to be insured or bonded The board doesn’t cover losses from lawyer malpractice or negligence, only misappropriated money and property.)
~Elizabeth Amon~American Lawyer Media, The National Law Journal
Attorney Michelle MacDonald has been politically targeted for suing a judge and running for MN Supreme Court in the 2014 and 2016 election. MacDonald attempted to expose the theft of her client’s money from previous attorneys. The outcome? The district court imposed monetary sanctions against her for issuing subpoenas to these attorneys to acquire billing information. She was also disciplined for other “transgressions” that were magnified and/or completely inaccurate. Michelle MacDonald receives ‘minimal’ discipline
The message to other attorneys is loud and clear….We can retaliate by disciplining you and destroy your career!
As of April 16, 2017, the Client Security Board has paid the amazing sum (emphasis mine) of $7,700,642.97 to 603 victims of lawyer dishonesty. (That’s $25,668.81 per year – yet we know that the majority of attorneys charge a $10,000 retainer fee just to start a case.)
While it is certainly disheartening to know that more than 170 lawyers over the past 30 years have stolen so much money from so many clients, I am very glad that the fund exists to repair a portion of that harm. As the director of both the Office of Lawyers Professional Responsibility (OLPR) and the Client Security Board (CSB), I see firsthand the tremendous harm to the public and the profession caused by lawyers who steal money from clients.
WHO ADMINISTERS THE FUND?
The fund currently receives $12 from each attorney through the annual registration fee.1Thank you! While I can understand the concerns raised by the attorneys originally troubled by having to contribute to cover other’s misconduct, I believe the value to the profession and the public at large from a dedicated fund to make reparations for the harm caused by a few very bad apples (Again, emphasis mine) among us outweighs the nominal cost per year. (Come on, attorneys are going to bitch about 12 bucks a year? Clients pay that in parking in Mpls. just to consult with an attorney.)
The Client Security Board administers the fund, and is composed of five lawyers and two public members, all of whom serve without compensation. The Supreme Court appoints board members, and three of the five attorney members are nominated by the MSBA.2 The current board members are Robert Bauer (chair and MSBA nominee), Apple Valley; Greg Bistram, Minneapolis; Daniel Tollefson (MSBA nominee), Becker; Stuart Williams (MSBA nominee), Minneapolis; Kathleen Clarke Anderson (public member), Minneapolis; and Nancy Helmich (public member), Minneapolis. There is currently an opening for an attorney member on the board.
These individuals meet quarterly to review and consider claims, and in between meetings review substantial information regarding the claims. Staff from the OLPR provide administrative assistance to the board—including the investigation and analysis of claims—and the Attorney General’s Office (in particular Assistant Attorney General Scott Grosskreutz) provides litigation support to assist the board in pursuing its subrogation rights against the dishonest lawyers. Associate Justice David Stras is the Supreme Court liaison to the board.
Continue Reading: http://mnbenchbar.com/2017/06/helping-victims-of-lawyer-dishonesty/
Sixty-five lawyers were publicly disciplined last year, breaking the previous record of 55 set in 1990, the Minnesota Lawyers Professional Responsibility Board said in its annual report Friday.
Among other disciplinary actions, the Minnesota Supreme Court suspended 47 lawyers in 2015, smashing the previous record of 27, set in 1990 and matched in 1995 and 1996.
“I wish that we knew why there was a record year, but we don’t,” said Susan M. Humiston, who took over as director of the lawyers board office in March. “It really does appear to be the fact that more people were engaged in more serious conduct.”
The office has a backlog of complaints to investigate, although it has made progress in reducing that number.
Six attorneys were disbarred in 2015:
• Jeremy Thomas Kramer of Owatonna lost his license for misappropriating client money, neglecting their cases, failing to communicate with them, failing to deposit all of their money into trust accounts, keeping money they gave him for filing fees, and failing to return their property.
• Robert David Boedigheimer was found guilty of conspiring with his brother-in-law, a marijuana dealer based in southern Minnesota, to launder proceeds from drug sales through his St. Paul law firm.
• John Tedman Heim of Rochester was found guilty of forging a client’s signature on a check and depositing the proceeds into his own business account for his own personal benefit.
• David A. Overboe was found by clear and convincing evidence “to have had unwelcome sexual contact with multiple clients, including groping and exposing himself to them, and had offered to reduce his legal fees in exchange for sexual favors.” The alleged misconduct took place over 14 years. He also was found to have practiced law in North Dakota while his license was suspended.
• Douglas A. Ruhland of Eden Valley lost his license as a result of his seventh disciplinary action since 1989. He represented a client with whom he had a conflict of interest without providing written disclosures and obtaining written consent; he misappropriated client funds, he failed to keep trust account records and books and he failed to cooperate with the lawyers board investigators.
• Robert Andrew Huff lost his license in Minnesota after he was disbarred in Illinois, an action resulting from a 2009 conviction for conspiring to distribute a large cache of marijuana.
So far, 2016 is shaping up as another busy year for lawyers in trouble.
On Friday, Minneapolis attorney Paul Hansmeier dropped his opposition to pending disciplinary proceedings arising out of hundreds of so-called porn trolling lawsuits he and some colleagues filed nationwide. Hansmeier was accused of committing a fraud on the courts, and of making substantial misrepresentations in his pending bankruptcy petition. He and the board stipulated to a recommended four-year suspension of his law license.
As of June 14, the board reported 25 public disciplinary actions in 2016, including two disbarments, a dozen suspensions, nine reprimands that resulted in probation and two other reprimands.
The lawyers board investigates allegations of wrongdoing and takes positions on the cases, but the Minnesota Supreme Court makes all disciplinary decisions, said Humiston, who previously was with the Minneapolis law firm of Stinson Leonard Street.
“Misappropriation of client funds always leads to disbarment,” Humiston said. Sanctions for other kinds of serious misconduct are less predictable.
For instance, Todd Allen Duckson, who admitted to playing a key role in a scheme that defrauded hundreds of investors in a real estate investment fund, was suspended from the practice of law in 2015 for five years — after which he can apply for reinstatement.
Five other lawyers were suspended in 2015 for three years after they were convicted of felonies involving lying to federal officials, criminal sexual misconduct, online solicitation of a minor, and participation in a trust account scam.
Humiston declined to comment on why some felonies lead to disbarment while others result in suspensions.
“Those are decisions by the court,” she said.
Suspended lawyers seeking reinstatement must go through a rigorous process to prove they underwent a moral change and are fit to practice law, Humiston said, “and it can be difficult to show moral change.”
Humiston said the Supreme Court has indicated that it wants to clear the backlog of complaints, and the board has made progress in doing so, reducing the annual backlog from 650 at the start of 2015 to 528 by the end of the year. Between 70 and 80 percent of complaints are dismissed each year, with just under half dismissed without any investigation.
It can take a couple of years for a complaint to lead to a final order of discipline.
“It’s a concern,” Humiston said.
It can take about a year for the board to investigate serious complaints, and if the lawyer fights any resulting discipline, it can take about another year to get to a final decision by the Supreme Court.
I don’t know anything about the background of these attorneys, but I would assume they aren’t members of the “club”. These boards have a massive amount of power as they are structured with the regulatory powers of a government agency, yet are not subject to open meeting laws and public record requests because they’re actually private. They can make minor infractions sound egregious and minimize true criminal activities of attorneys and judges (Board on Judicial Standards).
They’re essentially granted a monopoly over the legal profession, and don’t need to perform very well since they have no competition and everything is secret.