IN RE O'KEEFE

• Decision Date: 02 July 2004
• Docket Number: No. 2003-B-3195.,2003-B-3195.
• Citation: 877 So.2d 79
• Parties: In re Michael H. O'KEEFE.
• Court: Louisiana Supreme Court

877 So.2d 79

In re Michael H. O'KEEFE.

No. 2003-B-3195.

Supreme Court of Louisiana.

July 2, 2004.

Charles B. Plattsmier, Chief Disciplinary Counsel, Counsel for Applicant.

Michael H. O'Keefe, New Orleans, Counsel for Respondent.

ATTORNEY DISCIPLINARY PROCEEDINGS

PER CURIAM.

This disciplinary matter arises from formal charges filed by the Office of Disciplinary Counsel ("ODC") against respondent, Michael H. O'Keefe, an attorney licensed to practice law in Louisiana but currently on interim suspension.¹

PRIOR DISCIPLINARY HISTORY

Before we examine the current disciplinary charges, we find it helpful to review respondent's prior disciplinary history.

Respondent was admitted to the practice of law in Louisiana in 1955. In 1983, respondent was convicted in the United States District Court for the Eastern District of Louisiana of one count of mail fraud and two counts of obstruction of justice arising from the sale of an apartment building. On December 22, 1983, respondent's conviction was affirmed by the United States Court of Appeals for the Fifth Circuit. United States v. O'Keefe, 722 F.2d 1175 (5th Cir.1983).

Following the finality of his conviction, respondent filed a petition for consent discipline with this court, seeking to be disbarred. On December 7, 1984, in an unpublished order, we accepted respondent's petition and ordered him disbarred, retroactive to December 22, 1983.

Thereafter, respondent applied for readmission. On April 7, 1989, we granted respondent's application for readmission. In re: O'Keefe, 541 So.2d 843 (La.1989).

UNDERLYING FACTS

The Felony Conviction Matter

In early 1991, Physicians National Risk Retention Group ("PNRRG"), a Louisiana medical malpractice insurer, began to experience financial problems that ultimately resulted in its liquidation. Respondent operated the company that was retained to manage PNRRG during this period of time. As part of the liquidation, and under the pretext of arranging for continued malpractice insurance coverage to protect the physicians insured by PNRRG, respondent arranged to have more than $10 million in cash assets of PNRRG transferred to his law firm's trust account. In fact, however, the insurance coverage was not maintained and claims were not paid for the insured physicians as promised. Instead, respondent and his cohorts diverted in excess of $7.5 million in assets of PNRRG to themselves personally and to companies they controlled.

In 1995, a federal grand jury returned a multi-count indictment charging respondent and others with conspiracy, mail and wire fraud, and money laundering in connection with the fraudulent insurance scheme. United States v. Michael O'Keefe, Sr., et al., No. 95-0106 on the Criminal Docket of the United States District Court for the Eastern District of Louisiana. On March 21, 1996, a jury found respondent guilty of conspiracy to commit mail fraud and wire fraud, a violation of 18 U.S.C. § 371 (as to Count 1); wire fraud, a violation of 18 U.S.C. §§ 1343 and 1341 (as to Counts 2, 4, and 5-8); and money laundering, a violation of 18 U.S.C. § 1956(a)(2)(A) (as to Counts 14-23).

On January 12, 1999, respondent was sentenced to serve 235 months in prison and was ordered to pay restitution to PNRRG in the amount of $1,174,849. On August 11, 2000, the United States Court of Appeals for the Fifth Circuit affirmed respondent's conviction in an unpublished opinion. On June 11, 2001, the United States Supreme Court denied respondent's petition for writ of certiorari; his conviction became final on August 6, 2001, upon the Supreme Court's denial of rehearing in the matter.

The Solicitation Matter

The following recitation is based on the factual findings of the hearing committee, as well as the testimony and other evidence in the record.

Following respondent's 1983 felony conviction and his readmission to the bar in 1989, respondent resumed the practice of law with the New Orleans law firm of O'Keefe, O'Keefe & Bernstein.² By all indications, the firm enjoyed a successful practice concentrated primarily in the defense of insurance companies and the Housing Authority of New Orleans. However, by the mid-1990's, the firm's traditional practice base began to decline as political regimes in New Orleans changed and several insurance carriers doing business in Louisiana failed or relocated.

Meanwhile, over the years, certain unscrupulous attorneys in the greater New Orleans area had begun using persons known as "runners" to locate potential accident victims.³ The practice was largely conducted in the open and was carried out with little fear of consequence or reprisal. The runners, who often earned as much as $600 cash for each person brought to a lawyer's office, spoke openly and publicly about their business. In time, this information came to be known by Ernest Aiavolasiti, who had previously worked as a legal assistant for a personal injury lawyer. Mr. Aiavolasiti realized that with his prior law firm experience, he could enter this business and thereby generate substantial income for himself, the runners, and the attorneys from whose office they operated.

Sometime in 1994, Mr. Aiavolasiti contacted his long-time friend, Michael Palmisano, about joining him in the plan. Mr. Aiavolasiti explained to Mr. Palmisano that in order to bring the plan to fruition, they would need to find a cooperating lawyer with start-up funds to pay the runners as well as the legitimate costs of funding the personal injury cases. Mr. Palmisano agreed to contact respondent, who years earlier had loaned him money for a business venture, to see if he might be interested in participating in the plan.

Respondent agreed to meet with Mr. Aiavolasiti and Mr. Palmisano, and after the operations were explained, he decided to participate. According to testimony in the record, respondent agreed to provide the law office, funding for the payment of runners, and "case development costs," as well as attorneys to try the cases that could not be settled. In exchange, respondent was to receive (through entities he owned or controlled) the legal fees generated from the settlement of the personal injury cases. Furthermore, loans and advances to clients were to be provided by finance companies owned or controlled by respondent, charging up to 36% interest and providing an additional source of cash flow to respondent. For their part, Mr. Aiavolasiti and Mr. Palmisano would work in the law office as salaried "legal assistants" and were promised a bonus from profits.

Respondent was apparently concerned about processing these new personal injury cases through O'Keefe, O'Keefe & Bernstein, as that firm was traditionally a defense firm. Accordingly, respondent approached Greer Goff, a young associate of the O'Keefe firm, about creating a separate law firm known as the "Law Offices of Greer Goff." Respondent explained to Ms. Goff that Mr. Aiavolasiti and Mr. Palmisano were paralegals with "their own cases" to bring to her firm. Ms. Goff's role would be to try those cases that Mr. Aiavolasiti and Mr. Palmisano could not settle out of court. Ms. Goff did not question this explanation and agreed to do as respondent asked.

Mr. Aiavolasiti and Mr. Palmisano then began spreading the word to local runners that a new personal injury office was open for business. Slowly, but progressively faster,⁴ potential clients were brought by the runners to the third floor of the Canal Street building housing the O'Keefe, O'Keefe & Bernstein firm. After paying the runners in cash from funds provided to them by respondent, Mr. Aiavolasiti and Mr. Palmisano screened the cases and retained the clients on behalf of the "Law Offices of Greer Goff."

Mr. Aiavolasiti and Mr. Palmisano referred the clients for medical treatment, negotiated settlements, and distributed the settlement funds to the clients. In the overwhelming number of cases, the clients never saw or spoke with Ms. Goff or any other lawyer; when questions arose in the course of the operation, Mr. Aiavolasiti and Mr. Palmisano directed them to respondent. The legal fees generated by the personal injury cases were paid to O'Keefe & O'Keefe, A.P.L.C., an entity owned by respondent, as well as to O'Keefe, O'Keefe & Bernstein, an entity owned almost entirely by O'Keefe & O'Keefe, A.P.L.C.⁵

Subsequently, certain doctors in the New Orleans area began paying kickbacks in the form of "referral fees" to lawyers who agreed to send injured claimants to their offices for medical treatment. Mr. Aiavolasiti and Mr. Palmisano relayed that information to respondent, and pursuant to his instructions, they began referring some of their clients to Dr. Mark Schwaiger, a chiropractor willing to make such payments.⁶ Respondent kept two-thirds of the referral fees paid by Dr. Schwaiger for himself, while Mr. Aiavolasiti and Mr. Palmisano split the remainder.

This arrangement continued for approximately two years. However, at some point, Ms. Goff began to realize that Mr. Aiavolasiti and Mr. Palmisano were not only working on "their own cases," as originally contemplated, but were also acquiring new personal injury cases and using her name to do so. Ms. Goff confronted respondent, told him that she was no longer comfortable with the arrangement, and threatened to quit the firm. Respondent placated Ms. Goff for a period of time by promising to address her concerns, but the practice nevertheless continued. Eventually, Ms. Goff resigned from the firm. At about the same time, Mr. Aiavolasiti and Mr. Palmisano left respondent's employ because the bonuses they had been promised had never materialized.

In April 1996, respondent approached his law partner, Stephen Bernstein, with a proposal that Mr. Bernstein create the "Law Offices of Stephen Bernstein" to serve as a vehicle for continuing the lucrative runner-based operation. Mr. Bernstein agreed, and within a relatively short time, the new firm was bringing in between 180 and 220 new personal...