Hiding the Ball Can Lead to a Time Out

/ 07.Apr, 2014

Attorneys owe a duty to assist their clients, but overzealous representation often leads to discipline.  The news is replete with stories of attorneys facing discipline for assisting clients in hiding assets.  In a footnote to the Scott Rothstein $1.2 billion Ponzi scheme we previously wrote about, last October, disbarred Florida attorney Scott Saidel was sentenced to three years in prison for helping his client, Scott Rothstein’s wife, hide more than $1 million in jewelry purchased by Rothstein.  The sentencing judge noted: “It’s good to be a zealous advocate, but you have to do it within the bounds of the law.”  The client, a friend of the client, and the jeweler they planned to sell the jewelry to are all also facing charges.

After the New Jersey Disciplinary Review Board recommended suspending attorney Neil Malvone for three years, the Supreme Court voted to disbar him based upon his misuse of $11,000 he was apparently hiding for a client.  Last February, Bruce Pritikin, a New York attorney, was suspended for two years because he used his attorney account to shield client funds from tax liens.  The IRS’s own Internal Revenue Manual at section, instructs investigators to review practitioners representing taxpayers for “patterns of significant omission.”

Best practices requires attorneys be careful not to assist clients in activities which could be construed as attempts to hide assets.

Josh J.T. Byrne, Esquire