ATTORNEY GRIEVANCE COM'N OF MARYLAND v. Bereano, Misc. AG No. 11

• Court: Court of Appeals of Maryland
• Writing for the Court: RODOWSKY.
• Citation: 744 A.2d 35,357 Md. 321
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Bruce C. BEREANO.
• Decision Date: 13 January 2000
• Docket Number: Misc. AG No. 11

744 A.2d 35
357 Md. 321

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
Bruce C. BEREANO

Misc. AG No. 11, Sept. Term, 1999.

Court of Appeals of Maryland.

January 13, 2000.

Melvin Hirshman, Bar Counsel, and Kendall R. Calhoun, Asst. Bar Counsel, for Attorney Grievance Com'n of Maryland.

Bruce C. Bereano, Annapolis, for Respondent.

Argued before RODOWSKY, HARRELL, ROBERT L. KARWACKI, (retired, specially assigned), WILLIAM W. WENNER, (specially assigned), ARRIE W. DAVIS, (specially assigned,) JAMES R. EYLER, (specially assigned), and RAYMOND G. THIEME, Jr. (specially assigned), JJ.

RODOWSKY, Judge.

Bruce C. Bereano (Bereano), a member of the bar of this Court since 1969, was convicted in the United States District Court for the District of Maryland in November 1994 on seven counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346. In August 1998, the United States Court of Appeals for the Fourth Circuit (the Fourth Circuit) in an unpublished opinion upheld the finding of guilt but remanded for resentencing. See United States v. Bereano, 161 F.3d 3 (4th Cir.1998) (table decision). A few months later, the District of Columbia Court of Appeals disbarred Bereano on the ground that mail fraud is a "crime involving moral turpitude per se." In re Bereano, 719 A.2d 98, 99 (D.C.1998) (per curiam). The United States Supreme Court then disbarred Bereano on January

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25, 1999. In re Bereano, 525 U.S. 1119, 119 S.Ct. 921, 142 L.Ed.2d 917 (1999) (mem.). In May 1999, that Court also denied Bereano's petition for a writ of certiorari to review his conviction. See Bereano v. United States, ___ U.S. ___, 119 S.Ct. 1802, 143 L.Ed.2d 1007 (1999) (mem.)

Bereano's conviction having become final, the Attorney Grievance Commission, through Bar Counsel, petitioned this Court for disciplinary action against Bereano, alleging that he had violated the Maryland Rules of Professional Conduct (RPC), Rule 8.4(a), (b), (c), and (d).¹ The petition was referred for hearing to Judge Eugene M. Lerner of the Circuit Court for Anne Arundel County. In findings and conclusions issued on September 23, 1999, Judge Lerner determined that Bereano had violated subsections (a), (b), (c), and (d) of RPC 8.4, and, in his report to this Court, Judge Lerner added a recommendation for "a sanction less than disbarment." In this Court Bar Counsel recommends that Bereano be disbarred. Bereano took no exceptions to Judge Lerner's findings. In this Court he requests "a suspension of limited duration for a set time period so that [he] can return to the practice of Law."

In our review to determine an appropriate sanction, we accept as facts the allegations of the counts of the federal indictment on which Bereano was convicted, as well as the evidence set forth in the Fourth Circuit's opinion to demonstrate that there was sufficient evidence to support the convictions. See Maryland Rule 16-710(e)(1) ("[A] final judgment by a judicial tribunal in another proceeding convicting an attorney of a crime shall be conclusive proof of the guilt of the attorney of that crime.").

I

Bereano is a former clerk for a federal district court judge in Virginia and a former counsel to the Maryland Senate. He has taught law as an adjunct faculty member. For more than twenty years he has engaged in legislative lobbying before the Maryland General Assembly and in the private practice of law. Prior to the instant matter Bereano never has been the subject of professional discipline in any form.

The federal indictment alleged that, from May 1990 until June 1991, Bereano "knowingly and willfully devise[d] and intend[ed] to devise a scheme and artifice to defraud" his lobbying clients of money by false pretenses, in violation of 18 U.S.C. § 1341, and to deprive them of their right to his "loyal, faithful, honest, and unbiased service[s]," in violation of 18 U.S.C. § 1346.² The Government alleged that Bereano devised the mail fraud scheme in

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order to "conceal the true identities of the actual contributors of campaign funds," and to "make political contributions in excess of the limitations imposed by Maryland state election law."³ Bereano would request employees of his law firm to make political contributions in their own names to candidates, and then he would reimburse these employees with checks drawn on the law firm's operating account. In addition Bereano would have his employees cash checks drawn on the law firm's operating account and made payable to them, and then return the cash to him. Bereano would transfer this cash to members of his family, who would use it to make contributions in their names to Bereano's political action committee. The checks drawn on the law firm's account bore false notations describing the funds as reimbursements for expenses unrelated to political contributions. Bereano caused these checks to be recorded as a disbursement for, among other things, "legislative entertainment." In addition to Bereano's fee for services, his lobbying clients had agreed to pay reasonable expenses, including, specifically, "legislative entertainment," but, as representatives from these clients testified at the federal trial, Bereano was not authorized to make political contributions on their behalf or to bill his lobbying clients for political contributions made by him

Each count of the indictment concluded that Bereano mailed his lobbying clients bills that "fraudulently includ[ed] ... the amounts of the repayment checks used to reimburse the employees and family members for political contributions, which were falsely billed to clients as ... legislative entertainment." There were eight counts, each alleging a specific mailing to or from four different clients.⁴ The total amount of fraud alleged was "approximately $16,000." The Fourth Circuit summarized the scheme as "Bereano's fraudulent transfer to his clients of his cost of doing business which cost took the form of political contributions."

Before trial, the district court granted the Government's motion to limit the use of evidence concerning Maryland state election laws to Bereano's knowledge and intent, as distinct from the substantive issue of whether Bereano violated those laws. The Fourth Circuit agreed that "a violation of Maryland state election laws [is] both unnecessary and insufficient to prove mail fraud violations." Because Bereano's conviction for mail fraud does not determine, one way or the other, whether he violated Maryland's election laws, this Court, in determining an appropriate sanction, considers only Bereano's mail fraud conviction and the misconduct underlying it.

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Under the United States Sentencing Guidelines (1995) (USSG), the federal district court was required to determine the "value of the money, property, or services unlawfully taken." USSG § 2F1.1, cmt. (n7). That court found that the Government failed to establish losses of $16,000, and, instead, that the losses established were $600. They consisted of four separate $150 amounts respectively billed by Bereano to four lobbying clients for "legislative entertainment," whereas the amounts billed in fact represented reimbursement for political contributions made indirectly by Bereano and paid for by his clients through the fraud scheme. The amount of the loss is discussed more fully in Part III, infra.

Prior to sentencing, numerous individuals sent letters on behalf of Bereano to the federal district judge, which he characterized as follows:

"[T]he writers of those letters are a very diverse group of people. They are legislators, they are lawyers, they are law enforcement people, they are CEOs, executives at all levels. There are mayors, county executives, former governors, liberals, conservatives, black, white, men, women.

"... In a sense, it can be said that [these letters] represent a lobbying effort. Of course, that is not particularly a plus, but they also indicate that a lot of people see and have seen a lot of good in Mr. Bereano."

At sentencing the trial court also distinguished Bereano's case from more typical mail fraud, saying:

"The fraud here was not perpetrated for direct monetary gain to the detriment of the clients involved. The intent was clearly a mutual enhancement of the lobbying position of both the clients and the defendant. But for the defendant's concerns over the application of the Maryland election laws and their limitations, I am convinced by a preponderance of the evidence that the defendant would have openly solicited the so-called victim clients for contributions to political fundraisers, and if appropriate would have labeled expenses in that category as such on his bills. There is, I think, clearly an arguable gain to the clients from the fraudulent expenditures as part and parcel of the total efforts that were put forth by Mr. Bereano in their behalf. The beneficiaries of the money were clearly the legislative candidates and not the defendant. And thus, as I have indicated earlier, there is no quantifiable loss to the victims, as is customary in a fraud case.... [T]hat explains, I believe, the testimony of the representatives of the victim entities that they didn't recognize any fraud or any loss, and I think it explains the letters that have been received...."

Bereano was sentenced to a five year term of probation, six months of which were to be served in community confinement, 500 hours of community service, and a fine of $20,000. The district court stayed execution of the sentence pending appeal.⁵

On appeal from his conviction, Bereano argued, inter alia, that the Government had failed to prove harm to the alleged victims, and that harm is a necessary element

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for a conviction under 18 U.S.C. § 1341. The Fourth Circuit rejected this argument on factual grounds. It noted that, although the federal circuits are divided on the legal issue

"contemplated harm is present in this case. The contemplated harm is Bereano's fraudulent transfer to his

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