September 17, 2020

Attorney disciplined after pleading guilty to misprision of felony

Misprision of felony" originated in English common law and constitutes a crime  wherein an individual having knowledge that a felony has been committed fails to inform the appropriate authorities of that event. 

This Appellate Division decision reports that an attorney [Respondent] "pleaded guilty, in the United States District Court for the Western District of New York to misprision of a felony* in violation of 18 USC §4." Respondent had served as the settlement attorney representing "The Funding Source" [TFS] in a number real estate transactions that involved loans insured by the Federal Housing Administration [FHA].

In the course of his participation in a number of New York State real estate transactions the Appellate Division found that Respondent had learned that his co-defendants were engaged in a scheme to fraudulently obtain mortgages on behalf of unqualified borrowers that were insured by the FHA. This involved the submission of certain documents knowing that certain information in those documents was false.** 

The Appellate Division's decision reports that although Respondent did not know the full extent of the scheme, he "became aware he was being used to defraud financial institutions and he failed to notify authorities of his codefendants' use of fraud to obtain funds from TFS." The decision also notes that "Respondent also took affirmative steps to conceal the fraud by signing, or having his paralegal sign, documents sent to the banks."

Respondent, said the court, had received fees in transactions in which he served as settlement attorney. In other transaction, in which Respondent was one of the three sellers and also represented the purchaser, the Appellate Division noted that he had received his initial investment plus a profit. 

With respect to such monies, the Appellate Division observed that "Respondent has paid restitution ... for the seven transactions in which he had served as settlement attorney."

Ultimately the Appellate Division granted the parties' in the instant action joint motion for discipline by consent and Respondent was "suspended from the practice of law in the State of New York for a period of two years, effective ... April 18, 2019, and until further order of this Court." 

* Citations to selected New York State decisions referencing "Misprision of Felony" are set out below. Click on the text highlighted in colorto access the text of the decision.

Matter of Fishman, 22 A.D.3d 100, 2005 NYSlipOp 06802

Matter of Calonge v Calonge, 52 AD3d 1111, 2008 NYSlipOp 05630;

Matter of Marino, 73 A.D.3d 5, 2010 NYSlipOp 01800;

Matter of McKenzie, 177 AD3d 134, 2019 NYSlipOp 06729;

People v Jenkins, 55 Misc 3d 1207(A), 2017 NYSlipOp 50449(U); and

People v Williams, 20 AD3d 72, 2005 NYSlipOp 04317.

** Respondent stipulated that [1] he stands convicted of a "serious crime" (see 179 AD3d 19);  [2] he violated the New York Rules of Professional Conduct; and [3] he is subject to discipline by the Appellate Division pursuant to 22 NYCRR 1240.12(c)(2). 

The instant decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2020/2020_04813.htm