572 N.E.2d 681
No. 90-2536Supreme Court of Ohio.Submitted March 13, 1991 —
Decided May 29, 1991.
Attorneys at law — Misconduct — Indefinite suspension — Convictions for making false statements to a federal agency and making a false statement on a federal income tax return.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Supreme Court, No. 89-49.
Relator, Cincinnati Bar Association, filed a complaint on August 28, 1989, charging respondent, Robert Joseph, with two counts of misconduct, alleging violations of DR 1-102(A)(3), (4), (5), and (6). The respondent filed an answer admitting the allegations of the complaint, except for any violations of DR 1-102(A)(4), (5), and (6).
A panel of the Board of Commissioners on Grievances and Discipline of the Supreme Court received evidence and heard mitigating character testimony on May 22, 1990. The underlying facts are as follows.
In 1978, a corporation controlled by respondent purchased an automobile dealership in Cincinnati. In December 1978, the corporation assumed a Small Business Administration (“SBA”) guaranteed loan of $325,000, which had been granted to the dealership. Later, respondent personally guaranteed this loan. In December 1980, the corporation obtained another SBA guaranteed loan of $250,000, and respondent personally guaranteed this loan. The corporation, nevertheless, ceased business in January 1981.
The SBA sold the corporation’s business collateral and applied the proceeds to the corporation’s loan balance. However, this action did not satisfy the entire indebtedness, and the
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SBA sought payment of the remainder from respondent.
Between January 1982 and February 1984, respondent and SBA negotiated respondent’s liability for the two loans. The negotiations resulted in a compromise in which SBA accepted $10,000 to satisfy an indebtedness of $471,255.11.
During these negotiations, respondent falsely stated to the SBA his ownership in several assets. He pled guilty to a violation of Section 1001, Title 18, U.S. Code, making false statements to a federal agency.
Furthermore, in his 1982 federal income tax return, respondent reported his total income as $43,433. However, he had received an additional $212,000, approximately, from sales of motor vehicles that lessees had returned to a leasing company operated by respondent’s corporation. After respondent paid off liens of approximately $139,000, he had received approximately $73,000 in additional gross income. He later filed an amended 1982 return which disclosed that other expenses concerning these leased vehicles reduced this gross income to zero and that he owed no tax on the sales. Respondent, however, pled guilty to a violation of Section 7206(1), Title 26, U.S. Code, making a false statement on a federal income tax return.
As to the SBA matter, he received a jail term of two years. As to the income tax matter, he received a consecutive, suspended three-year jail term and was placed on five years’ probation to commence on his release from confinement. Among the conditions of his probation, he must pay restitution of $308,000 to the SBA. He also was required to publish an open letter in the two Cincinnati daily newspapers, admitting the making of false statements to the SBA and the Internal Revenue Service, warning persons dealing with federal agencies to be truthful, and setting forth his sentence.
On May 3, 1989, on receiving a certified copy of a judgment entry of the felony convictions against respondent, we suspended him from the practice of law for an indefinite period pursuant to Gov. Bar R. V(9)(a)(iii). We also referred this matter to relator for further investigation and commencement of disciplinary proceedings.
The board of commissioners adopted the findings and recommendation of the panel and found a violation of DR 1-102(A)(3) (engaging in illegal conduct involving moral turpitude). The board concluded that respondent had paid a substantial price in serving a federal jail sentence and suffering personal disgrace. Therefore, it recommended that we suspend respondent from the practice of law for two years, granting credit for time already served. Relator, however, opposes this recommendation and urges that we indefinitely suspend respondent.
Edwin W. Patterson III, Baron H. Gold and Peter W. Swenty, for relator.
James N. Perry, for respondent.
Per Curiam.
We have reviewed the evidence, findings, and recommendations. We modify the sanction recommended by the board. Accordingly, we indefinitely suspend respondent from the practice of law and tax costs to him. He may petition for reinstatement, under Gov. Bar R. V(25), two years after his indefinite suspension that was effective May 3, 1989.
Judgment accordingly.
MOYER, C.J., HOLMES, WRIGHT, H. BROWN and RESNICK, JJ., concur.
SWEENEY and DOUGLAS, JJ., dissent.
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DOUGLAS, J., dissenting.
I respectfully dissent. The board concluded that respondent be suspended for two years and that he be granted credit for time already served. I agree with the recommendation of the board. I would suspend respondent for two years and give credit for the time he has already served pursuant to our indefinite suspension of respondent on May 3, 1989. The majority decision gives no assurance that respondent will be readmitted upon application. See Disciplinary Counsel v. Bell (1988), 39 Ohio St.3d 276, 530 N.E.2d 404. Because I do not agree with the judgment of the majority, I dissent.
SWEENEY, J., concurs in the foregoing dissenting opinion.