Attorney Grievance Com'n of Maryland v. Sabghir

• Decision Date: 01 September 1997
• Docket Number: No. 24,24
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. David Shammai SABGHIR. Misc. AG,
• Court: Maryland Court of Appeals

Page 67

350 Md. 67

710 A.2d 926

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. David Shammai SABGHIR.

Misc. AG No. 24, Sept.Term, 1997.

Court of Appeals of Maryland.

June 8, 1998.

Melvin Hirshman, Bar Counsel, and Raymond A. Hein, Asst. Bar Counsel, for the Attorney Grievance Com'n of Maryland.

Richard I. Chaifetz, Columbia, for respondent.

Argued before BELL, C.J., ELDRIDGE, RODOWSKY, CHASANOW, RAKER and WILNER, JJ., and DALE R. CATHELL, Judge (Specially Assigned).

BELL, Chief Judge.

The issue that this attorney grievance matter presents is whether a respondent who has been sanctioned in disciplinary proceedings in one state may collaterally attack the factual findings made in those proceedings by way of his or her defense in reciprocal discipline proceedings instituted in this state. Our response is "no."

I

The Attorney Grievance Commission of Maryland (the "Commission" or the "petitioner"), through Bar Counsel, filed a Petition for Disciplinary Action against David Shammai Sabghir, the respondent, alleging misconduct arising out of disciplinary proceedings in New York. ¹ Specifically, according to the petition, the respondent was disbarred by the Appellate Division of the Supreme Court of the State of New York after he had been found, by a special referee, to have violated ten of the Disciplinary Rules of the Code of Professional Responsibility. The petitioner sought a determination by this Court that the respondent, by those acts and omissions, violated the following Disciplinary Rules of the Maryland Code of Professional Responsibility (former Maryland Rule 1230, Appendix F): DR 1-102(A)(4)(6); ² DR 5-101(A); ³ DR 5-104(A); ⁴ DR 9-102(A) and (B), ⁵ and Rules 1.7(b) ⁶ and 8.4(c) of the Maryland Rules of Professional Conduct. Maryland Rule 1230. ⁷

We referred the matter to the Honorable Clayton Greene, Jr. of the Circuit Court for Anne Arundel County to make findings of fact and conclusions of law pursuant to Maryland Rule 16-711(a). ⁸ Following a hearing, at which testimony and exhibits were received, Judge Greene rejected the respondent's argument that he had proven by a preponderance of the evidence that he did not engage in the misconduct found by the Appellate Division of the Supreme Court of New York. The respondent's argument was premised on his testimony and that of a Rabbi testifying as an expert witness.

In his testimony, the respondent denied that there ever existed an attorney client relationship between him and Benchemoun and Moradi, the complainants, or that he derived any benefit from the investments that resulted in his disbarment and are the subject of these proceedings. More specifically, as it relates to the Benchemoun matter and will be more fully explained infra, the respondent disclaimed responsibility for the diversion of the funds from a joint account in their names. To substantiate that point, he offered the affidavit of Timothy Rafferty, in which Mr. Rafferty accepted full responsibility. The Rabbi's testimony related to a business arrangement called an "iska." He testified that such a transaction is inconsistent with an attorney client relationship. The testimony of both the respondent and the rabbi was offered, Judge Greene stated, "in an attempt to establish mitigating circumstances, rebut New York's findings, and explain why the Respondent should not be disciplined."

Judge Greene made findings of fact as follows:

"The Court finds that New York's final judgment is conclusive proof of Respondent's misconduct. Petitioner submitted the Supreme Court of New York's decision of June 19, 1995, Exhibit 2, and the Court finds this is clear and convincing evidence of a final judgment by a judicial tribunal. See Attorney Grievance Commission v. Miller, 310 Md. 163, 168, 528 A.2d 481, 484 (1987). Respondent's evidence amounts to less than a preponderance of evidence to establish mitigating circumstances, rebut New York's findings or explain why Respondent should not be disciplined. Therefore, the Court accepts New York's final adjudication as conclusive proof of Respondent's misconduct and accepts the following facts as found by the Supreme Court of New York:

"1. On or about May 16, 1985, Eric Benchemoun delivered $10,000.00 to the Respondent for the purpose of investing in Nutribevco, a company which was marketing a diet product. The Respondent, who had a financial relationship with Nutribevco and its principals, was seeking investors for the company.

"2. On or about June 27, 1985, a stock certificate representing 28,000 shares of Nutribevco was issued. The certificate bore the endorsement of 'David Sabghir and Yehyda Ben Chem Houn (sic) JTWROS.' The certificate remained under the Respondent's dominion and control until about September 24, 1985, at which time it was delivered to the brokerage house of Bear Stearns and Company. Along with that certificate, an executed bond power, bearing the Respondent's signature and the purported signature of 'Yehyda Benchemoun' (sic), was delivered to Bear Stearns and Company.

"3. Mr. Benchemoun never signed the bond power and was unaware that the stock certificate was being negotiated by the Respondent. As a result of that transaction, a $14,000.00 credit was applied to account number 459-00361 in the names of 'David Sabghir and Yehyda Den [sic] Chem Houn JTWROS' (sic) at the brokerage house of Rooney Pace, Inc. On or about October 2, 1985, the Respondent's own account at Providence Securities received a $14,000.00 credit. That credit was used to purchase Nutribevco securities in the Respondent's name alone.

"4. On or about December 1986, Esagh Moradi retained Respondent to review a commercial lease. Respondent advised Mr. Moradi against that transaction and instead suggested that Mr. Moradi invest in Nutribevco.

"5. Respondent never disclosed his relationship with Nutribevco or its principals to Mr. Benchemoun or Mr. Moradi "6. Respondent maintained an attorney escrow account at the Bank of Commerce which he used for personal business purposes. Respondent deposited in that account funds entrusted to him incident to his practice of law. Between approximately August and September 1985, while Respondent was holding escrow funds entrusted to him as a fiduciary, that account was overdrawn on at least nine occasions.

"7. Respondent failed to maintain and produce for inspection his escrow account records by the New York Grievance Commission, as required by the New York Grievance Commission."

The respondent had also argued that Maryland should not accept the New York findings because New York, unlike Maryland, which requires clear and convincing evidence, see Maryland Rule 16-710 d. ⁹ , requires that an attorney's misconduct be proven by only a preponderance of the evidence. The hearing court similarly rejected that argument.

Judge Greene concluded from the facts found:

"As Respondent's acts and omissions occurred before January 1, 1987, Respondent's misconduct is defined by Rule BV1j and the Disciplinary Rules of the Code of Professional Responsibility.

"Under Disciplinary Rule 1-102(A)(4), it is professional misconduct to engage in conduct involving dishonesty, fraud, deceit or misrepresentation. Respondent's conduct with Mr Benchemoun and Mr. Moradi involving Nutribevco in the previously mentioned facts involve dishonesty, fraud, deceit and misrepresentation. Additionally, Respondent's use of his escrow account for Nutribevco stock transactions, and failure to maintain escrow records involve dishonesty, fraud, deceit and misrepresentation. Therefore, Respondent violated Rule 1-102(A)(4).

"Under Disciplinary Rule 1-102(A)(6), ¹⁰ it is professional misconduct to engage in conduct that adversely reflects on fitness to practice law. As described in the facts, Respondent's conduct with Mr. Benchemoun and Mr. Moradi involving Nutribevco adversely reflects upon Respondent's fitness to practice law. Also, Respondent's conduct in maintaining his escrow account adversely reflected on his ability to practice law. Therefore, Respondent violated Disciplinary Rule 1-102(A)(6).

"Under Disciplinary Rule 5-101(A), it is professional misconduct for an attorney to accept employment if the exercise of professional judgment on behalf of the client will be or reasonably may be affected by his own financial, business, property or personal interests except with the consent of the client and after full disclosure by the attorney. Since Mr. Benchemoun and Mr. Moradi were Respondent's clients, Respondent allowed personal financial interests to impair his professional judgment on behalf of his clients. Therefore, Respondent violated Disciplinary Rule 5-101(A).

"Under Disciplinary Rule 5-104(A), it is professional misconduct to enter into a business transaction with a client if they have differing interests therein for the protection of the client, unless the client has consented after full disclosure. Since Mr. Bennchemoun and Mr. Moradi were Respondent's clients, and Respondent's interests differed, Respondent's business transactions, as previously described in the facts, were improper. Therefore, Respondent violated Disciplinary Rule 5-104(A).

"Under Disciplinary Rule 9-102, it is professional misconduct for an attorney to abuse his fiduciary responsibility of preserving the identity of funds and the property of a client. Disciplinary Rule 9-102(A) prohibits a lawyer's funds from being deposited into an escrow account. Disciplinary Rule 9-102(B) requires a lawyer to maintain complete records of all client funds coming into the possession of the lawyer. Respondent's transactions with Mr. Benchemoun and Mr. Moradi was an abuse of his fiduciary responsibility. Similarly, Respondent's commingling escrow account funds with personal and or business funds and failing to maintain escrow account records also constitutes an abuse of his fiduciary responsibility. Therefore, Respondent violated Disciplinary Rule 9-102(A) and (B)."

II

Aggrieved by the hearing court...