Attorney Grievance Commission of Maryland v. Klauber, No. 5

• Court: Court of Appeals of Maryland
• Writing for the Court: Argued before MURPHY; SMITH; Although participating in the hearing on this matter, ELDRIDGE
• Citation: 423 A.2d 578,289 Md. 446
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Gerald Ney KLAUBER. Misc. (Subtitle BV)
• Decision Date: 10 February 1981
• Docket Number: No. 5

Page 446

289 Md. 446 423 A.2d 578 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
Gerald Ney KLAUBER.
Misc. (Subtitle BV) No. 5. Court of Appeals of Maryland. Feb. 10, 1981.

Page 447

Michael E. Marr, Baltimore, for respondent.

Walter D. Murphy, Jr., Asst. Bar Counsel, Annapolis, for petitioner.

Argued before MURPHY, C.J., SMITH, DIGGES, COLE and DAVIDSON, JJ., and RICHARD P. GILBERT, Specially Assigned Judge.

SMITH, Judge.

This is the third time we have considered issues growing out of the mail fraud conviction of Gerald Ney Klauber, a member of the Maryland bar. This time we shall disbar.

Bar Counsel, action on behalf of the Attorney Grievance Commission, filed a petition with us seeking disciplinary

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action against Klauber because he had been convicted of violating 18 U.S.C. § 1341 (1970) (mail fraud) and 18 U.S.C. § 1962 (1970) (racketeering). It was alleged that Klauber had violated Disciplinary Rules 1-102; 2-103 B, C, D, and F; 3-103; 5-107(A); 7-101(A)(3); 7-102(A)(2-8, inclusive); and 9-102.

Pursuant to Maryland Rule BV9 we designated the Honorable David Ross, an associate judge of the Eighth Judicial Circuit of Maryland, to hear the charges. He found as a fact that Klauber"was found guilty by [423 A.2d 579] a jury in the United States District of Maryland of 16 counts of mail fraud . . . and one count of racketeering . . . on April 21, 1978 and was sentenced to concurrent terms of 5 years imprisonment as to each count on June 21, 1978." His conclusions of law were:

1. The federal crime of mail fraud (18 U.S.C. § 1341) is a crime involving moral turpitude.

2. A lawyer who is guilty of the federal crime of mail fraud (18 U.S.C.s 1341) has violated the following disciplinary rules:

DR 1-102(A)(3)

DR 1-102(A)(4)

DR 1-102(A)(5)

These disciplinary rules specify that a lawyer shall not engage in illegal conduct involving moral turpitude; conduct involving dishonesty fraud, deceit, or misrepresentation; or conduct that is prejudicial to the administration of justice.

In United States v. Klauber, 611 F.2d 512 (4th Cir. 1979), cert. denied, 446 U.S. 908, 100 S.Ct. 1835, 64 L.Ed.2d 261 (1980), Judge Murnaghan summarized for the court the factual basis for the conviction:

The scheme or artifice to defraud and the pattern of racketeering activity asserted against Klauber grew out of his conduct as a partner in the law firm of Fine and Klauber, P.A. The evidence at trial permitted a jury conclusion that Klauber was engaged in a practice in which, with respect to personal

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injury cases in which he or his firm represented plaintiffs, Klauber sought inflated statements from doctors in which charges were set forth for visits by the plaintiffs which had not actually occurred. Subsequent to settlements with insurance companies based on such inflated statements from doctors, Klauber reduced the amounts actually remitted to the doctors and sometimes diverted amounts received in settlement with respect to one plaintiff's case to a doctor not involved in the case but retained with respect to some other plaintiff. (Id. at 513.)

In his effort to avoid disciplinary action Klauber has filed a number of exceptions to the findings of fact and conclusions of law of the trial judge. They are all bound up, however, in his contention that the trial judge erred in ruling that the offenses of which Klauber was convicted "per se involve moral turpitude" and thus that it is improper to discipline Klauber without a development of the underlying issues. He says, "It is obvious that this Court's refusal to suspend Respondent for conviction of a crime involving moral turpitude means ipso facto that mail fraud need not, in every case, involve moral turpitude," referring to Attorney Griev. Comm'n v. Klauber, 283 Md. 597, 391 A.2d 849 (1978) (Klauber I). Such is not the case. We shall here attempt to dispel any false impressions which may have arisen as a result of that opinion, that in Attorney Grievance Comm'n v. Klauber, 284 Md. 306, 396 A.2d 253 (1979) (Klauber II), and the one in Attorney Grievance Comm'n v. Reamer, 281 Md. 323, 379 A.2d 171 (1977).

We shall first examine the federal statute and that which has been written relative to it. The statute provides:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use

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any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or takes or receives therefrom, any such matter or thing, or knowingly [423 A.2d 580] causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both. (18 U.S.C. § 1341 (1970).)

No significant change has been made in the statute since 1909.

The most recent opinion of the Supreme Court on this statute is Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954), in which Chief Justice Warren said for the Court:

The elements of the offense of mail fraud under 18 U.S.C. (Supp. V) § 1341 are (1) a scheme to defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme. It is not necessary that the scheme contemplate the use of the mails as an essential element. United States v. Young, 232 U.S. 155, 34 S.Ct. 303, 58 L.Ed. 548. (Id. at 8, 74 S.Ct. at 362.)

In reviewing convictions under this statute the federal appellate courts consistently have said that to convict under this statute these elements must be established. They usually cite Pereira to this effect. See, e.g., United States v. Bohonus, 628 F.2d 1167, 1171 (9th Cir.), cert. denied, --- U.S. ---, 100 S.Ct. 3026, 65 L.Ed.2d 1122 (1980); United States v. Wrehe, 628 F.2d 1079, 1082 (8th Cir. 1980); United States v. Jordan, 626 F.2d 928, 930 (D.C.Cir.1980);

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United States v. Brien, 617 F.2d 299, 307 (1st Cir.), cert. denied, 446 U.S. 919, 100 S.Ct. 1854, 64 L.Ed.2d 273 (1980); DeMier v. United States, 616 F.2d 366, 369 (8th Cir. 1980); United States v. Kent, 608 F.2d 542, 545 (5th Cir. 1979), cert. denied, 446 U.S. 936, 100 S.Ct. 2153, 64 L.Ed.2d 788 (1980); United States v. Corbin, 590 F.2d 398, 402 (1st Cir. 1979); United States v. McDonald, 576 F.2d 1350, 1359 (9th Cir.), cert. denied, 439 U.S. 830, 99 S.Ct. 105, 58 L.Ed.2d 124 (1978); United States v. Pearlstein, 576 F.2d 531, 537 (3d Cir. 1978); United States v. Foshee, 569 F.2d 401, 403 (5th Cir. 1978), cert. denied, 444 U.S. 1082, 100 S.Ct. 1036, 62 L.Ed.2d 766 (1979); United States v. McNeive, 536 F.2d 1245, 1247 (8th Cir. 1976); United States v. Bush, 522 F.2d 641, 648 (7th Cir. 1975), cert. denied, 426 U.S. 912, 96 S.Ct. 2237, 48 L.Ed.2d 837 (1976); United States v. Payne, 474 F.2d 603, 604 (9th Cir. 1973); and United States v. Bessesen, 445 F.2d 463, 468-69 (7th Cir.), cert. denied, 404 u.S. 984, 92 S.Ct. 448, 30 L.Ed.2d 368 (1971). In Jordan the court stated:

During its deliberations the jury sent the following note to the court:

"The indictment in count seven, charge one, mail fraud, cites approximately $110,000 as the proceeds involved in defendant's alleged scheme to defraud. This is the first time such a sum has appeared and the evidence does not account for this total. Is this pertinent for the jury to know in arriving at a decision? If so, what is the explanation for the $110,000?"

In response the court instructed the jury:

The Government is not required to prove the details of a scheme: it is, however, required to prove beyond a reasonable doubt the following: that the defendant . . . willfully and knowingly devised a scheme or artifice to defraud . . . and, secondly, that the defendant used the United States Postal Service by mailing or by causing to be mailed some matter or thing for the purpose of executing the scheme to defraud.

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The instruction as given was correct in all respects. (Id. 626 F.2d at 930.)

In United States v. Grande, 620 F.2d 1026 (4th Cir.), cert. denied, --- U.S. ---, 101 [423 A.2d 581] S.Ct. 98, 66 L.Ed.2d 35 (1980), Judge Winter said for the court:

The...