Hampton, Matter of

• Decision Date: 24 January 1989
• Docket Number: No. 385,385
• Citation: 533 N.E.2d 122
• Parties: In the Matter of John V. HAMPTON. S 75.
• Court: Indiana Supreme Court

Page 122

533 N.E.2d 122

In the Matter of John V. HAMPTON.

No. 385 S 75.

Supreme Court of Indiana.

Jan. 24, 1989.

Jack A. Quirk, Muncie, for respondent.

Martin E. Risacher, Staff Atty. Indianapolis, for the Indiana Supreme Court Disciplinary Com'n.

PER CURIAM

This matter is before us on a Verified Complaint for Disciplinary Action charging the Respondent, John V. Hampton, with thirteen counts of professional misconduct. A Hearing Officer appointed by this Court pursuant to Admission and Discipline Rule 23 has heard the matter and has tendered his findings of fact and conclusions of law. The Respondent has petitioned for review of the same. The Disciplinary Commission has filed its answer brief which the Respondent now challenges as being filed untimely and requests that it be struck.

Addressing the initial procedural issue, it is well established that the mere expiration of a time period does not constitute denial of procedural due process. In re Wireman (1977), 270 Ind. 344, 367 N.E.2d 1368, cert. denied 436 U.S. 904, 98 S.Ct. 2234, 56 L.Ed.2d 402. The Respondent does not contend that he has been prejudiced by the delay or otherwise denied procedural due process, but argues, without supporting authority, that, as a matter of policy, the filing periods should be strictly enforced. We are unpersuaded by this argument and now deny Respondent's request that the Commission's answer brief be stricken.

The established review process in attorney disciplinary cases involves a de novo examination of all matters presented on review. While the Hearing Officer's findings receive emphasis, they are not necessarily controlling. In re Phillips (1986), Ind., 486 N.E.2d 1031. Respondent's challenges will be resolved within the context of this review process and this Court's ultimate determination of the findings of fact and conclusions of law.

The charges against the Respondent arise out of misappropriation of funds during his tenure as License Branch Manager of Delaware County. Count I of the complaint involves allegations that the Respondent made a false statement under oath to the Delaware County Grand Jury; Counts II through VI involve allegations that the Respondent mishandled state and county funds; Counts VII, VIII and IX charge that the Respondent engaged in illegal acts involving conspiracy and corrupt business practices; Counts X through XIII involve allegations that the Respondent hired and paid "ghost employees".

Upon review of all matters tendered in this case, we find that John V. Hampton is an attorney licensed to practice in Indiana and is, thus, subject to this Court's jurisdiction. In the Spring of 1978, the Commissioner of the Bureau of Motor Vehicles appointed the Respondent to be the manager of the Delaware County License Branches. As the manager of the branches, the Respondent was responsible for, among other matters, the accounting, managing and reporting of all funds collected through the branches within Delaware County. The Respondent employed several persons including Marshall K. Willis, a long-time confidant. Willis was a certified public accountant who was hired to perform all accounting duties regarding the operations of the Delaware County license branches. Willis handled all funds and bank accounts for the license branch including the borrowing and depositing of funds. A branch office manager, Judith Goe, handled the day to day operations. The Respondent came into the branch no more than once a week and turned his duties over to Willis and Goe.

The fees collected through the operation of the licence branches included fees belonging to the State, the County, as well as fees generated for the operation of the branch. The collected funds were allocated to the County, the State and the Branch pursuant to Bureau of Motor Vehicle Guidelines and Indiana law. The money for the State and County accounts was public money and was earned when collected. The fees were deposited in 1) a State Fee Account, 2) a County Excise Tax Account, and 3) the Branch Manager's Account. There was a statutory requirement, pursuant to IC 5-12-1-1 and 5-12-1-3 (now superseded by IC 5-13-6 et seq), that public monies be deposited on a daily basis. However, strict procedures were not followed in the Indiana license branches.

It was the practice of the Delaware County License Branch during the period of 1978-1981 to place all fees collected into one account, the Clearing Account, and then to periodically transfer into the State, County and Branch accounts.

During the period of time Respondent was manager of the Delaware County License Branch, the Respondent had personal and family expenses paid from the Branch Manager's Account. These amounted to many thousands of dollars annually and included car, truck, mortgage payments, payments to various credit card accounts, payments to Sears, Penney's and other department stores, payments for repairs to Respondent's home, payments to remodel Respondent's law office and apartment building, as well as cash taken by Respondent and Respondent's wife for their use.

In 1982, the Respondent hired and paid a weekly salary to Ann Augustine, his private legal secretary, from accounts of the Delaware County License Branch. Ann Augustine was not assigned nor did she perform any duties for the Delaware County License Branch. In 1982 and 1983, the Respondent paid his children John P. Hampton, William A. Hampton and Marguerite Hampton, as employees of the license branch when they, in fact, had no assigned duties, did not perform any, and, much of the time, were full-time college students.

Funds belonging to the Branch Manager's account could be used by the Branch Manager for whatever purpose he desired, including personal matters. However, as a result of the extensive use of the funds in the Branch Manager's account on strictly personal matters, the account was frequently overdrawn and sometimes for several weeks at a time. In order to balance the Branch Manager's Account, it was common practice for officials of the Delaware County License Branches to transfer funds from the Clearing Account to the Branch Manager's Account prior to those funds being earned by the Respondent.

The transfer of such funds were considered loans by the Respondent and were represented as "cash advances" on liability accounts on a monthly financial statement prepared for and presented to the Respondent. The "loans" or "cash advances" amounted to thousands of dollars annually: $24,667.19 for 1978; $9,445.59 for 1979; $12,554.12 for 1980; $8,824.46 for 1981 $78,778.08 for 1982. No officials of the State of Indiana or the Delaware County Treasurer's office ever consented to or were even aware of these "loans" or "cash advances" to the Respondent of funds owing to the State or the County. In 1981 the Respondent told Willis, the accountant, to make whatever transfers were necessary to keep Respondent's Branch Manager's Account covered.

The Bureau of Motor Vehicles and the State Board of Accounts promulgated a set of accounting procedures to bring the County license branches into compliance with IC 5-12-1-3 (the Daily Deposit Law), to remove the branch manager's signature and his authority to withdraw funds from the County Excise account and the State account and to formally restrict the access to public monies. Under these procedures, which became effective on January 1, 1982, all fees were to be deposited daily in a Clearing Account. From the Clearing Account the funds had to be transferred, at least three times a week, into the State, County Excise and Branch Manager's Account according to an established allocation system. Authority to withdraw from the Clearing Account rested with the Branch Manager or the Commissioner of the Bureau of Motor Vehicles. Funds in the State account could be withdrawn only by the Commissioner of the Bureau of Motor Vehicles, and funds in the County account could be withdrawn only by the County Treasurer.

The new procedures were explained in detail in a memorandum and set of instructions distributed to all license branches. The Bureau of Motor Vehicles and the Indiana State Board of Accounts also held a meeting for the purpose of explaining the new procedures. The meeting was attended by two of Respondent's employees, Judith Goe and Mary Jane Upchurch. Thereafter, the employees met with the Respondent and the accountant, Willis, and fully explained the new requirements.

In the Fall of 1981, the Respondent and Willis discussed the idea of depositing branch fees into an interest bearing account. The Respondent advised Willis that it was Respondent's opinion that such a plan was legal.

On December 23, 1981, Willis opened an interest bearing savings account named "John V. Hampton Branch Account" which allowed for withdrawal only by Willis. In December of 1981, Willis began depositing into this account, checks mailed to the branch in payment of automobile registration fees and continued this practice until July of 1983. The savings account earned interest in 1981, 1982 and 1983; the interest was reported as income on Schedule C of Respondent's federal income tax return for 1982 and 1983. Judith Goe, the assistant branch manager, informed the Respondent of the account sometime in late December of 1981 or January of 1982. On February 12, 1982 the Respondent requested Willis to transfer $2,000 from the savings account to Respondent's law office account. Pursuant to the request, Willis obtained a deposit slip from Respondent's secretary and made the transfer.

From December of 1982 to January 1983, Willis transferred $203,400 from the savings account into his personal account and later loaned the money to a corporation in which he owned stock. Willis executed promissory notes for each transfer.

In the Spring of 1983, the Indiana State Board of Accounts, by its field examiner, William Gonser, conducted an audit of the Delaware County License Branches for the period of January 1, 1982 ...