The Florida Bar v. Bailey

803 So. 2d 683 (2001)

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Nature of the Case

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Facts

In 1994, D represented Duboc in a criminal case alleging drug smuggling. The indictment also included forfeiture claims. D worked out a deal covering Duboc's plea, repatriation of assets, and payment of attorneys' fees. Duboc would plead guilty and forfeit all of his assets to the United States Government. All of Duboc's cash accounts from around the world would be transferred to an account identified by the U.S. Attorney's Office. To deal with the forfeiture of Duboc's real and personal property, 602,000 shares of Biochem Pharma (Biochem) stock, valued at $5,891,352.00, would be transferred into Bailey's Swiss account. Bailey would use these funds to market, maintain and liquidate Duboc's French properties and all other assets. The goal was that Duboc would plead guilty and forfeit all assets in the hopes of a reduction of sentence based on what D described as 'extraordinary cooperation.' The logistics of the plan were significant. Duboc owned two large estates in France and valuable car collections, boats, furnishings and art works. Most of these properties were physically located in France. The two estates required substantial infusions of cash for maintenance. D had a strategy where he was to segregate an asset, a particular asset, one that would appreciate in value over time, so that when it came time for Duboc to be sentenced following entry of a plea of guilty, the United States Government would not argue in opposition to a defense claim that part of the appreciation in value was not forfeitable to the United States. That asset was 602,000 shares of Biochem. D could serve as trustee and guardian of Duboc's French properties. Duboc's primary interest was to maximize the amount of forfeitures that would be turned over to the United States. This stock would be used to market, maintain and liquidate the French properties and all other assets. It made sense to hold the stock separate and cash it in when needed instead of simply dumping it on the market. Money was transferred immediately into a covert account identified by the United States Attorney's Office. The Biochem stock certificates were transferred to D's Swiss account at his direction. United States District Court Judge Paul held a pre-plea conference and a deal was reached that included attorney's fees. Duboc pled guilty to two counts in open court and professed his complete cooperation with the U.S. Attorney's Office. P charged D with seven counts. When D sold stock he transferred it into a personal account. P found D guilty of commingling. D claimed it was inadvertent error. D sold the Biochem shares and borrowed against the stock, deriving over $4 million. D then transferred $3,514,945 of Biochem proceeds into his personal account. Bailey had transferred all but $350,000 of these proceeds into his personal checking account by December 1995. D wrote checks to his private business enterprises totaling $2,297,696 and another $1,277,433 for other personal expenses or purchases. D paid $ 138,946 out of his money market account toward the purchase of a residence. The referee found D guilty of violating Rules 3-4.3 (lawyer shall not commit any act that is contrary to honesty and justice), 4-1.15(a) (commingling funds), 4-8.4(b) (lawyer shall not commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer), 4-8.4(c) (lawyer shall not engage in conduct involving deceit, dishonesty, fraud or misrepresentation), and 5-1.1 (requiring money or other property entrusted to an attorney to be held in trust and applied only for a specific purpose). P charged D with violating two court orders when he was removed as Duboc's counsel. D continued to use the Biochem proceeds that he held in trust after service and knowledge of the orders. D was found guilty of violating Rules Regulating the Florida Bar 3-4.3 (lawyer shall not commit an act that is contrary to honesty and justice), rule 4-8.4(b) (lawyer shall not commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer), rule 4-8.4(c) (lawyer shall not engage in conduct involving deceit, dishonesty, fraud or misrepresentation), and rule 5-1.1 (requiring money or other property entrusted to an attorney to be held in trust and applied only for a specific purpose). The referee further found that by knowingly expending trust account funds from the money market account after entry of the January 12 order, Bailey violated Rules Regulating the Florida Bar 3-4.3, 4-3.4(c) (lawyer shall not knowingly disobey an obligation under the rules of a tribunal), 4-8.4(a) (lawyer shall not violate the Rules of Professional Conduct), and 4-8.4(d) (lawyer shall not engage in conduct that is prejudicial to the administration of justice). P charged D with giving false testimony and found D guilty of violating Rules Regulating the Florida Bar 3-4.3, 4-8.4(b), 4-8.4(c), and 4-3.3(a)(1) (lawyer shall not knowingly make a false statement of material fact or law to a tribunal). P charged D with self-dealing and used information relating to his representation of Duboc to the disadvantage of his client. The referee found that Bailey managed one of the French properties to his own personal benefit by procrastinating in his efforts to sell the property. D was found in violation of 4-1.7(b) (lawyer shall not represent a client if lawyer's exercise of independent professional judgment may be materially limited by the lawyer's own interest), 4-1.8(a) (lawyer shall not knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client), and 4-1.8(b) (lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client consents after consultation). P charged D with ex parte communications, self-dealing, and disclosure of confidential information. In an ex parte letter to Judge Paul, D stated that: (1) Duboc pled guilty because he had no defense due to the strength of the case, (2) Duboc chose this course because it was his only option, not in a spirit of remorse or cooperation, (3) Duboc was a 'multimillionaire druggie,' (4) by consulting with other counsel, Duboc was no longer acting in the spirit of cooperation, and (5) Duboc's new defense team had interests contrary to those of his client and the court. D also sent a second letter to Judge Paul threatening to seek an order to invade the attorney-client privilege in an attempt to defeat Duboc's position that the stock was held in trust. D was found guilty of 4-1.6(a) (lawyer shall not reveal information relating to representation of a client), 4-1.8(a), 4-1.8(b), 4-3.5(a) (lawyer shall not seek to influence a judge), 4-3.5(b) (in an adversary proceeding, lawyer shall not communicate as to the merits of the cause with a judge). P recommended disbarment. D sought review.