Disciplinary Counsel v. Gittinger

[Cite as Disciplinary Counsel v. Gittinger, 125 Ohio St.3d 467, 2010-Ohio-1830.]

DISCIPLINARY COUNSEL v. GITTINGER.

[Cite as Disciplinary Counsel v. Gittinger,

125 Ohio St.3d 467, 2010-Ohio-1830.]

Attorneys — Misconduct — Convictions on federal charges of bank fraud and

money laundering — Indefinite suspension with credit for time served

under interim felony suspension.

(No. 2009-2290 — Submitted February 17, 2010 — Decided May 4, 2010.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 09-031.

__________________

Per Curiam.

{¶ 1} Respondent, Steven C. Gittinger, last known business address in

Cincinnati, Ohio, Attorney Registration No. 0011887, was admitted to the

practice of law in Ohio in 1984. On October 16, 2008, we suspended

respondent’s license to practice on an interim basis pursuant to Gov.Bar R.

V(5)(A)(4) upon receiving notice that he had been convicted of a felony. In re

Gittinger, 119 Ohio St.3d 1491, 2008-Ohio-5339, 894 N.E.2d 1247.

{¶ 2} The Board of Commissioners on Grievances and Discipline

recommends that we now indefinitely suspend respondent from practice

retroactively to October 16, 2008, on the condition, however, that respondent

cannot petition for reinstatement until the order in his criminal case permits. The

board made this recommendation based on findings that respondent had engaged

in federal bank fraud and money laundering, causing a loss between $400,000 and

$1,000,000. We agree that respondent violated ethical duties incumbent upon

Ohio attorneys and adopt the board’s recommendations.

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{¶ 3} Relator, Disciplinary Counsel, charged respondent with violating

three Disciplinary Rules of the Code of Professional Responsibility: DR 1-

102(A)(3) (a lawyer shall not engage in illegal conduct involving moral

turpitude), 1-102(A)(4) (a lawyer shall not engage in conduct involving

dishonestly, fraud, deceit, or misrepresentation), and 1-102(A)(6) (a lawyer shall

not engage in conduct that adversely reflects on his fitness to practice law).

{¶ 4} A panel appointed by the board heard the case on the parties’ joint

exhibits and written stipulations regarding the facts and the rules violated. The

parties proposed to the panel that respondent receive an 18-month suspension

from the practice of law beginning on October 16, 2008, the date on which

respondent was placed on interim felony suspension under Gov.Bar R. V(5).

However, the panel recommended that respondent be suspended indefinitely,

“retroactive to October 16, 2008, thus permitting him to apply for restoration

under the rules and show his fitness for [the] practice of law when the terms of his

supervised release are wholly satisfied.” The board adopted the panel’s report

and recommended sanction.

Misconduct

{¶ 5} The parties stipulated to the respondent’s violations of DR 1-

102(A)(3), 1-102(A)(4), and 1-102(A)(6), and to the following facts:

{¶ 6} “1. Respondent, Steven Charles Gittinger, was admitted to the

practice of law in the State of Ohio on May 7, 1984. Respondent is subject to the

Code of Professional Responsibility and the Rules for the Government of the Bar

of Ohio.

{¶ 7} “2. On October 16, 2008, the Supreme Court of Ohio suspended

respondent from the practice of law on an interim basis due to his August 5, 2008

felony convictions, which are described herein.

{¶ 8} “3. Respondent’s interim felony suspension is still in effect.

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{¶ 9} “4. In 2003, respondent was a principal of a business in Cincinnati,

Ohio known as Classic Title Agency, Inc., which owned Classic Title Agency,

LLC (‘Classic Title’) a title insurance agency licensed in the State of Ohio and

formed in 2004.

{¶ 10} “5. Among the business activities that Classic Title performed

were services to close real estate sales.

{¶ 11} “6. In 2003 respondent received business and made money for

performing closings on behalf of Toby Groves, as well as a business that Groves

owned known as Groves Funding Corporation (‘Groves Funding’).

{¶ 12} “7. Beginning by at least June 20, 2003, Groves was engaging in a

scheme to defraud federally insured financial institutions as follows:

{¶ 13} “a. Groves Funding was engaged in the business of loaning

moneys to individuals who would use the funds to purchase residences.

{¶ 14} “b. Groves Funding obtained the moneys to make these loans from

a line of credit obtained from Regions Bank, a federally insured financial

Institution.

{¶ 15} “c. After making loans to buyers of real estate, Groves Funding

would sell these loans to other federally insured financial institutions.

{¶ 16} “d. Both Regions Bank, when it funded the line of credit, and the

financial institutions that bought loans from Groves Funding relied upon the

information in the real estate closing packages to make their business decisions

related to Groves Funding.

{¶ 17} “8. During the period between June 2003 and continuing through

2005 Groves falsified material information on real estate closing documents such

as loan application forms and HUD-1 Settlement Statements.

{¶ 18} “9. Among the occasions where Groves provided materially false

information to lenders were a series of transactions relating to Groves’ purchase

of his own residence at 5416 Edwardsville Road, Clarksville, Ohio.

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{¶ 19} “10. On June 20, 2003, Groves purchased the Edwardsville Road

property, but caused Kevin Moore, a Groves Funding employee, to sign the

paperwork and act as if Moore was the purchaser of the property.

{¶ 20} “11. The June 20th purchase price of the Edwardsville Road

property was $615,000 and the loan used to pay the seller was supplied by Groves

Funding.

{¶ 21} “12. After June 20, 2003, Groves Funding sold the June 20, 2003

loan to Washington Mutual Bank, a federally insured financial institution.

{¶ 22} “13. On September 3, 2003, Groves conducted and caused to be

conducted another purported sale of the Edwardsville Road property from Moore

to Groves.

{¶ 23} “14. Groves solicited the assistance of respondent to complete the

September 2003 closing through respondent’s Classic Title business.

{¶ 24} “15. Before the September 2003 closing, respondent and Groves

agreed to make the following misrepresentations on the closing documents, which

were then forwarded to financial institutions that funded loans for Groves.

{¶ 25} “a. The closing documents, including the HUD-1 Settlement

Statement, indicated that Moore sold the Edwardsville Road property to Groves

for $815,000 and that Groves provided a down payment of $168,236.36, making

the transaction appear to lenders as a loan of eighty percent of the purchase price.

{¶ 26} “b. In reality, Groves Funding was supplying a loan for the entire

purchase price and Groves obtained the property without any down payment

towards the purchase price.

{¶ 27} “c. Respondent also caused the production of a Classic Title check

in the amount of $168,236.36 made payable to Moore.

{¶ 28} “d. Moore never received the $168,236.36 and the check was later

voided.

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January Term, 2010

{¶ 29} “16. As a part of the purported September 3, 2003 sale of the

Edwardsville Road property, Groves Funding received credit for a new loan from

its line of credit funded by Regions Bank.

{¶ 30} “17. Respondent and Groves caused an interstate wire transfer of

funds in an amount of $649,872.35 from Regions Bank to Washington Mutual

Bank for the purpose of paying off the original loan sold by Groves Funding after

the September 3, 2003 sale where Groves used Moore to buy the Edwardsville

Road property.

{¶ 31} “18. This wire transfer of funds was a financial transaction done

with the proceeds from the bank fraud.

{¶ 32} “19. Any specific amount of loss attributable to respondent as a

result of his actions in the matters undetermined.

{¶ 33} “20. On April 18, 2008, an Information was filed in the United

States District Court for the Southern District of Ohio, Western Division under

Criminal Case No. 1:08-CR-47 charging respondent with one count of conspiracy

to commit bank fraud, a felony violation of 18 U.S.C. §1349, and one count of

money laundering, a felony violation of 18 U.S.C. §1957.

{¶ 34} “21. On May 1, 2008, an arraignment and formal plea hearing was

held before Judge Herman Weber in Criminal Case No. 1:08-CR-47.

{¶ 35} “22. At the May 1, 2008 hearing, respondent waived his rights to

prosecution by indictment and the court accepted respondent’s guilty pleas to both

counts in the Information.

{¶ 36} “23. On August 5, 2008, respondent appeared before Judge Weber

for sentencing.

{¶ 37} “24. At the August 5, 2008 sentencing hearing, respondent

received an aggregate twelve-month and one-day sentence followed by an

aggregate five-year period of supervised release. In addition, respondent was

ordered to pay an aggregate fine of $6,000 plus a $200 special assessment fee.

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{¶ 38} “25. Following his sentence, respondent was placed in the custody

of the Bureau of Prisons.

{¶ 39} “26. Respondent served his prison sentence at the FCI Gilmer

Satellite Camp, P.O. Box 7000, Glenville, WV 26351, and has completed his

sentence.”

{¶ 40} We accept these stipulations and find that respondent violated DR

1-102(A)(3), 1-102(A)(4), and 1-102(A)(6).

Sanction

{¶ 41} In determining the appropriate sanction for an attorney’s

misconduct, we consider sanctions imposed in similar cases and whether

aggravating or mitigating factors under Section 10(B) of the Rules and

Regulations Governing Procedure on Complaints and Hearings Before the Board

of Commissioners on Grievances and Discipline (“BCGD Proc.Reg.”) warrant a

harsher or more lenient disposition. Disciplinary Counsel v. Bennett, 124 Ohio

St.3d 314, 2010-Ohio-313, 921 N.E.2d 1064, ¶ 23. The parties stipulated to the

mitigating factors that respondent (1) lacks a prior disciplinary record, (2) has

fully cooperated in these proceedings, and (3) accepts responsibility and expresses

remorse for his misconduct. BCGD Proc.Reg. 10(B)(2)(a) and (d). Respondent

also offered positive character evidence. BCGD Proc.Reg. 10(B)(2)(e).

Respondent fulfilled his pledge to the panel to become compliant with all

requirements for continuing legal education, consistent with the terms of his

interim felony suspension. Respondent has amended his attorney-registration

status from “inactive” to “active.”

{¶ 42} However, respondent’s denial that any loss resulted from his

conduct does not provide any mitigation and is in fact an aggravating factor.

BCGD Proc.Reg. 10(B)(1)(g) (refusal to acknowledge wrongful nature of

conduct). Respondent’s assertion is contrary to the stipulation before the panel

that he accepts responsibility for his actions and with his statement in the plea

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agreement in the United States district court that the amount of the loss

attributable to him exceeds $400,000. In this regard, respondent’s denial of harm

suggests that he does not accept responsibility for or acknowledge the wrongful

nature of his conduct. BCGD Proc.Reg. 10(B)(1)(g).

{¶ 43} Moreover, respondent’s witness at the hearing is further indication

that the wrongfulness of the conduct is not acknowledged. Although he denied

that he was excusing respondent’s misconduct, the witness seemed to condone or

justify it as an understandable lapse of attention, and he supported respondent’s

position that no one had suffered a loss. BCGD Proc.Reg. 10(B)(1)(g).

Respondent’s criminal conduct also evidences a motive to defraud others in an

apparent effort to retain a lucrative business client, thus manifesting dishonesty

and selfishness, which are aggravating factors under BCGD Proc.Reg.

10(B)(1)(b).

{¶ 44} As we noted above, the parties stipulated to an 18-month

suspension. The panel and board, however, recommended that respondent’s

license be suspended indefinitely, retroactively to the date respondent was placed

on interim felony suspension, and that respondent could apply for reinstatement

upon satisfaction of his five-year period of supervised release from his criminal

case.

{¶ 45} We agree with the recommendations made by the panel and the

board. A key term of the sentence in respondent’s criminal case is that he will be

on supervised release for a period of five years upon his release from

imprisonment. The sentence further provides that during the supervised release,

respondent “shall not be employed in the title business, either directly or

indirectly, and shall not practice law during the term of supervised release.” At

the hearing, the panel expressed concern that the adoption of the parties’

stipulated 18-month suspension would create an inconsistency between the

disciplinary sanction and the conditions imposed in the supervised release. In

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support of the 18-month suspension stipulation, respondent submitted an affidavit

stating that his probation officer would petition the district court to lift the

condition prohibiting respondent from practicing law after respondent had served

one year of his postrelease supervision. We find that indefinite suspension is the

proper sanction in these circumstances. Imposing an indefinite suspension will

avoid inconsistency between this court’s disciplinary sanction and the federal

court’s criminal sentence and will allow for proper resolution of the underlying

criminal case prior to any application for reinstatement to the practice of law.

{¶ 46} We also find that crediting respondent for his interim suspension is

appropriate. In Disciplinary Counsel v. Lash (1993), 68 Ohio St.3d 12, 623

N.E.2d 28, respondent pleaded guilty to a single count of bank fraud for

overstating his income to obtain a loan. We adopted the panel and board’s

recommendation that respondent be suspended from the practice of law for one

year, with the suspension retroactive to the date of his interim suspension. In

Cuyahoga Cty. Bar Assn. v. Garfield, 109 Ohio St.3d 103, 2006-Ohio-1935, 846

N.E.2d 45, respondent was convicted of a single count of felony bank fraud.

Garfield was a managing director of an investment company and had pledged a

certificate of deposit of the company as collateral for a $250,000 loan to obtain

funds for his personal use. He was suspended from the practice of law for 18

months with credit for time served under the interim suspension.

{¶ 47} Respondent's misconduct is similar to the misconduct in Lash and

Garfield. All three respondents were suspended on an interim basis after their

convictions on federal bank-fraud charges. All three cases involve one-time

violations. All three involve significant mitigating evidence, including

attestations to the respondents’ good reputations in the community, indicating that

the misconduct was out of character and unlikely to recur. Another factor

favoring credit in this case is the fact that respondent did not realize any tangible

personal gain or profit from his misconduct. Moreover, respondent did not

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engage in a lengthy pattern of misconduct or cause grave harm to others. Compare

Disciplinary Counsel v. Margolis, 114 Ohio St.3d 165, 2007-Ohio-3607, 870

N.E.2d 1158 (no credit for time served for attorney who engaged in antitrust

conspiracy lasting several years and causing may millions in damages to others);

Erie-Huron Counties Bar Assn. v. Evans, 123 Ohio St.3d 103, 2009-Ohio-4146,

914 N.E.2d 381 (no credit for time served for attorney who committed multiple

disciplinary violations over several years with serious resulting harm to clients).

{¶ 48} Based on the foregoing, we accept the recommendation of the

panel, the board, and the parties that respondent receives credit for the time served

under his interim suspension.

{¶ 49} Respondent is therefore indefinitely suspended from the practice of

law in Ohio. Respondent may petition for reinstatement once he has either

completed, or otherwise satisfied, all the conditions imposed by the federal court

and his underlying criminal case is resolved. We also grant credit to respondent

for the time he has served under the October 16, 2008 interim suspension, which

credit may be applied against the two-year period that respondent must wait

before petitioning for reinstatement under Gov.Bar R. V(10)(B). Costs are taxed

to respondent.

Judgment accordingly.

PFEIFER, LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and

CUPP, JJ., concur.

BROWN, C.J., not participating.

__________________

Jonathan E. Coughlan, Disciplinary Counsel, and Phillip A. King,

Assistant Disciplinary Counsel, for relator.

Robert W. Cettel, for respondent.

______________________

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