In re Husain, CASE NO. 14 MP 90007

• Decision Date: 09 July 2015
• Docket Number: CASE NO. 14 MP 90007
• Citation: 533 B.R. 658
• Parties: In re: Al–Haroon Husain, Respondent.
• Court: U.S. Bankruptcy Court — Northern District of Illinois

533 B.R. 658

In re: Al–Haroon Husain, Respondent.

CASE NO. 14 MP 90007

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

Signed July 9, 2015

Al–Haroon Husain, Himont Law Group, Ltd., Park Ridge, IL, pro se.

MEMORANDUM OPINION

Jacqueline P. Cox, United States Bankruptcy Judge

Before the court is an Attorney Disciplinary Proceeding brought pursuant to Local Bankruptcy Rule 9029–4B.¹ Attorney Al–Haroon Husain (“Mr. Husain”) is charged with violating applicable disciplinary rules by systematically altering documents, reusing debtors' signatures, signing documents on behalf of clients and causing clients to sign incomplete documents. For the reasons noted herein, the Court finds that the United States Trustee has proven by a preponderance of the evidence that Mr. Husain has violated various disciplinary rules by systematically altering documents, reusing debtors' signatures, signing documents on behalf of his clients and causing clients to sign incomplete documents.

Each finding noted herein is supported by a preponderance of the evidence. Mr. Husain will be permanently suspended from the practice of law before the Bankruptcy Court for the Northern District of Illinois due to the nature and extent of his misconduct. He has contended throughout these proceedings that he acted with his clients' consent. However, the provisions of Federal Rule of Bankruptcy Procedure 1008 (“Fed. R. Bankr.P.”) and 28 U.S.C. § 1746 can not be ignored by an attorney with a client's agreement.

I. Jurisdiction and Authority

This matter was initiated pursuant to Local Bankruptcy Rule 9029–4B. After being approved by the District Court for the Northern District of Illinois, the Rule became effective on January 1, 2012. It is authorized by, and promulgated pursuant to Federal Rule of Civil Procedure 83 and Fed. R. Bankr.P. 9029. Section 105(a) of the Bankruptcy Code provides additional authority for this Rule, as well as the inherent authority of bankruptcy judges to impose sanctions for misconduct. In re Rimsat, Ltd., 212 F.3d 1039, 1049 (7th Cir.2000) ; Matter of Volpert, 110 F.3d 494, 500 (7th Cir.1997) ; In re Evergreen Sec., Ltd., 570 F.3d 1257, 1273 (11th Cir.2009) ; 2 alan n. resnick & henry j. sommer, collier on bankruptcy § 105.02[6][b], at 105–34 (16th ed.2013).

A. Background

1. Procedural History

On April 29, 2014, Mr. Patrick Layng, the United States Trustee for the Northern District of Illinois, brought to the court's attention certain conduct on the part of Mr. Husain. Disciplinary Case No. 14–90007 (“Disc.Case”), Docket No. 2, pp. 2–13.

Pursuant to Local Bankruptcy Rule 9029–4B(B), a majority of the judges of this court voted that an evidentiary hearing was warranted in this matter. Before bringing this matter to the court's attention, the United States Trustee (“U.S.Trustee”) prosecuted a Motion for Sanctions against Mr. Husain before Judge Carol Doyle regarding his conduct in In re Hristo Manavski, Case No. 13–BK–011728. This inclusive proceeding was considered preferable because it covers Mr. Husain's conduct in several cases, including the matter before Judge Doyle.

Mr. Husain was served with the Statement of Charges commencing this proceeding on June 18, 2014. Disc. Case, Docket. No. 1, p. 12. Mr. Husain failed to timely answer the Statement of Charges within 28 days as required by Local Bankruptcy Rule 9029–4B(B)(7). On August 7, 2014, Chief Bankruptcy Judge Bruce W. Black issued an Order requiring him to file an answer by August 15, 2014 and appear for a hearing on August 18, 2014 or the allegations would be deemed admitted and permanent suspension from practice might result. Mr. Husain filed his Answer to the Statement of Charges on August 15, 2014. Disc. Case, Docket No. 6, mistakenly noted as the Statement of Charges. This matter was assigned to this Court for hearing and all further proceedings. See Disc. Case, Order of August 18, 2014, Docket No. 7. A discovery schedule was entered and a January 28, 2015 trial date was set. The trial of this matter began on that date; the trial concluded on February 27, 2015. While the pretrial order required Mr. Husain to file a list of witnesses by January 16, 2015, none was filed. He pursued a motion to allow him to adopt the U.S. Trustee's witness list; that motion was denied. Disc. Case, Order at Docket No. 24.² U.S. Trustee's Exhibits (“UST Ex(s).”) 1–73(z) have been admitted into evidence.

2. The Charges

The Statement of Charges alleges that Mr. Husain started practicing law as an Assistant Corporation Counsel for the City of Chicago in approximately 1999. He entered private practice in 2002. His practice consists mainly of bankruptcy cases and real estate transactions. He generally represents chapter 7 debtors in the Bankruptcy Court for the Northern District of Illinois.

Marilyn Kaghan was Mr. Husain's employee operating under his sole direction and control, assisting him in the preparation of petitions and other bankruptcy documents. She also conducted client consultations and meetings. Mr. Husain has taken responsibility for Ms. Kaghan's conduct. Husain's Proposed Findings of Fact and Conclusions of Law, Disc. Case, Docket Nos. 38 and 39, ¶ 158:

Regardless, as Respondent has stated, Respondent takes responsibility for all actions coming out of his office (and continues to do so). However, none of these actions were done with the intention to deceive the Court.

a. The Hristo Manavski Cases

Debtor Hristo Manavski (“Mr. Manavski”) currently resides in Plovdiv, Bulgaria. According to the deposition testimony of his sister, Mariya Manavska, he was born in Bulgaria and has resided in Bulgaria continuously since at least 2008. Transcript of Deposition of Mariya Manavska, UST Ex. 62, 10:3–5; Trial Transcript (“Trial Tr.”), 606:15 through 608:5.

Mr. Husain has never met Mr. Manavski and has never spoken to him directly. Trial Tr., 75:16–21. This is a problem. With the scourge of identity theft, it is not advisable for an attorney to file a bankruptcy case on behalf of a debtor he or she has never met, getting the documents and information from a third party. The potential for fraud is too great.

Notwithstanding Mr. Manavski's residence in Bulgaria, Mr. Husain filed two chapter 7 bankruptcy cases on his behalf, Case No. 12 B 29534 (“Manavski I ”) and 13 B 11728 (“Manavski II ”). The Manavski I petition for bankruptcy relief was filed on July 26, 2012. It indicated that Mr. Manavski resided in DuPage County, Illinois at 128 Forest Glen Road, Wood Dale, Illinois 60191 (the “DuPage County Address”). The filing of that case included schedules and a Statement of Financial Affairs. After Mr. Manavski failed to appear for the 11 U.S.C. § 341 meeting of creditors, the chapter 7 Trustee moved for dismissal. Mr. Husain filed a Motion to Excuse Appearance which indicated that Mr. Manavski resided in Bulgaria; he sought permission for Mr. Manavski to appear for the creditors' meeting via video.

That motion was not granted. Manavski I was dismissed on December 21, 2012.

On March 22, 2013, the Manavski II case was commenced with the filing of a voluntary chapter 7 petition. The Manavski II petition indicated that the Debtor resided at 1285 E. Washington Street, Unit 9, Des Plaines, Illinois 60016 (the “Cook County Address”). The U.S. Trustee alleges that although page 1 of the Manavski II petition is distinct from the Manavski I petition, pages 2 and 3 were taken from the Manavski I petition, and the dates next to the signatures of Mr. Manavski and Mr. Husain were altered to recite a new date. The Declaration Regarding Electronic Filing of Petition and Accompanying Documents, the schedules and the Statement of Financial Affairs in Manavski II appear to be identical to those filed in Manavski I, with the dates altered to reflect the new filing date. The Court finds that the allegation that a new date was added to pages 2 and 3 of Manavski II has been proven by a preponderance of the evidence. One need not be a handwriting expert to make this finding. On page 2 of Manavski I the date includes a strong slash that touches the signature line above the “t” in “Date”. On page 2 of Manavski II the bottom of a strong slash shows up above the “t” in “Date” although it is not part of the new or altered date, as the new or altered date in Manavski II was written a few spaces to the right from where it was written on Manavski I . It appears at the bottom of the first “2” in “3/22/13” and has nothing to add to the date. It is very likely that the person who redated the Manavski II petition did not white out or erase the entire date from Manavski I before reusing it.

Mr. Husain and Mr. Manavski's sister testified that Manavski II was filed using the Cook County address because Mr. Manavski was a truck driver who drove trucks from both DuPage County and Cook County. The Court finds this position to be incredible. The contention that Mr. Manavski had a residence or domicile in either DuPage County or Cook County is belied by the fact that he resided in the United States from approximately 2005 to 2008 when he returned to Bulgaria, leaving behind a few items of personal property, including clothing, an iron and a television. The evidence showed that he left the United States before his sister moved to the Wood Dale address in DuPage County, meaning that he never resided there. In addition, in both Manavski I and Manavski II the Schedules I—Current Income of Individual Debtor(s) each indicates that Mr. Manavski was unemployed when each bankruptcy case was filed. See Case Number 12–29534, Docket No. 6. p. 20 and Case Number 13–11728, Docket No. 5, p. 20.

Mr. Husain used the Cook County address for the Manavski II case because he believed that a Cook County chapter 7 Trustee would allow Mr. Manavski to appear for the creditors' meeting via Skype.

The documents filed in Manavski II contained information that Mr. Husain knew was materially inaccurate. The Manavski II petition failed to disclose the Manavski I case, even...