In re Schneider, 86-21.

Citation553 A.2d 206
Decision Date24 January 1989
Docket NumberNo. 86-21.,86-21.
PartiesIn re Thomas J. SCHNEIDER, Respondent.
CourtCourt of Appeals of Columbia District

W. Gary Kohlman, with whom Warren Anthony Fitch, Washington, D.C., was on the brief, for respondent.

Samuel McClendon, Asst. Bar Counsel, with whom Thomas H. Henderson, Bar Counsel, Washington, D.C., at the time the brief was filed, was on the brief, for petitioner, for Office of Bar Counsel.

Before ROGERS, Chief Judge,* and NEWMAN and STEADMAN, Associate Judges.

STEADMAN, Associate Judge:

In this disciplinary case, we are called upon to deal with the question of the imposition of sanction upon a member of the bar who, without intent of personal gain, engages in action involving alteration of documents; viz., eight credit card receipts submitted for travel expense reimbursement.

I. The Facts.

While a first-year associate with the law In a he had joined upon graduation from law school,1 respondent Schneider submitted false travel expense reports to this firm on eight separate occasions over a seven-month period in 1981. Specifically, Schneider altered eight credit card receipts by inserting a "1" before each actual charge, thus overstating the amounts represented by such slips by a total of $800. Each receipt purported to be the cost of "hotel expenses."2 All of the charges related to the representation of the firm's client, the Kellogg Company, and Schneider was reimbursed by Kellogg through the law firm's accounting department for the expenses he had claimed. The hearing committee found that Schneider was attempting only to recoup money that he believed he personally had advanced for other legitimate client-related travel expenses. He believed each of these eight alterations represented an accurate estimate of his out-of-pocket expenditures for the client and were no more than the amount of the money he believed he had advanced for the client. The hearing committee further found that in each of these eight instances, Schneider did not intend to personally gain by his act, nor did he intend to deceive or materially misrepresent to either the law firm or the client "the true and accurate total amount of his client-related expenditures."

However, the committee found, Schneider did in fact deceive both the firm and the client because he materially misrepresented the amount of the particular expense for which the altered receipt was submitted. It concluded that there was no doubt that Schneider engaged in dishonest, fraudulent and deceitful conduct by submitting the altered receipts for reimbursement, in violation of DR 1-102(A)(4), which reads:

"(A) A lawyer shall not:

. . . . .

(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation."3

With respect to the sanction, the committee found some analogy to cases involving misappropriation. However, it noted, those cases generally involved more egregious conduct, prior discipline, and additional rule violations. Taking into account that respondent had not been the subject of previous discipline and had no record of dishonest conduct, and concluding that the conduct was a temporary aberration resulting, in part, from the demands of Schneider's practice, the committee recommended a sixty-day suspension.

The Board on Professional Responsibility agreed with the hearing committee that there was "no doubt" that Schneider had engaged in dishonest, fraudulent and deceitful conduct by submitting the altered receipts for reimbursement. However, it did not accept the recommendation for sanction. Instead, in its first report to this court, dated January 3, 1986, six participating members of the Board recommended a one-year suspension (one in a concurrence recognizing the sanction was "at the severe end of the spectrum") and one member recommended disbarment. Subsequent to the preparation of the Board's report, we decided In re Reback, 513 A.2d 226 (D.C. 1986) (en banc), which had also involved a violation of DR 1-102(A)(4), among other provisions, and involved mainly the issue of appropriate sanctions. Accordingly, we remanded the Schneider matter to the Board for further consideration in light of that decision.

The Board has now submitted to us a second report, dated November 25, 1986, dealing with what it rightly describes as "the difficult question of matching appropriate discipline" to Schneider's misconduct. The Board saw as the gravamen of Schneider's offense that he intended to submit false documents to the firm and ultimately to the client,4 and that this knowing, conscious decision to physically alter the receipts and to submit the false claims was totally unnecessary and totally dishonest. The Board unanimously recommends to us a six-month suspension.

Schneider makes two arguments before us attacking the recommendation of the Board. First, he asserts that because he had no intent to deceive and because the mis-stated facts were not material, no violation of DR 1-102(A)(4) occurred at all. Second, he asserts that even if such a violation occurred here, his sanction, at most, should be public censure.

II. Violation of DR 1-102(A)(4)5

Here, as in many situations, two elements intertwine: first, the physical acts committed by the party and second, the state of mind with which such acts were done. Schneider argues that a violation of DR 1-102(A)(4) can occur only when there is proof of scienter, which, as we understand him to suggest, means that the actor must have an affirmative wrongful intent that the recipient of the conduct misunderstand or be defrauded or deceived. Here, he asserts, both the committee and the Board specifically found that Schneider did not intend to deceive the client or the firm.

There are several difficulties with this argument. To begin with, the finding is not as clear-cut as stated by Schneider. The precise wording of the hearing committee report is that Schneider did not "intend to deceive or materially misrepresent to either Sayfarth and Shaw or his client the true and accurate total amount of his client-related expenses." It is somewhat ambiguous whether the committee found a complete absence of any intent to deceive or instead found no intent to deceive as to the total amount of expenses (leaving open the question of intent to deceive with respect to the credit card slips themselves).

Even absent a positive intent to deceive, that does not end the inquiry. Here, in the Board's words, Schneider "intended to submit false documents to the firm." He made a "knowing, conscious decision to physically alter the receipts and to submit the dishonest, false claims."6 Furthermore, his alterations did in fact deceive the firm, and potentially the client, because "he materially misrepresented the amount of a particular expense for which the altered expense was submitted"; that is, the expense evidenced by the altered receipt (and accompanying trip expense report, see note 2 supra) was not in fact actually incurred as shown on the receipt, but rather was part of other, generalized (and nonreceipted) travel expenses. Thus, Schneider intentionally altered documents so as to represent facts that were false in two significant aspects: a) that expenses had been incurred that were in fact different from those actually incurred, and b) that documentary proof, issued by a third party, existed evidencing such expenses.

Schneider's argument comes down to the proposition that an attorney may intentionally falsify documents and those falsified documents may in fact be acted upon, and yet the attorney has committed no disciplinary violation because he did not affirmatively intend to deceive. However his strict scienter argument may apply in other contexts,7 we are unwilling to adopt it in a case of the deliberate falsification of documents, and particularly not where they touch on the sensitive area of matters involving, albeit indirectly, client funds. Documents are an attorney's stock in trade, and should be tendered and accepted at face value in the course of professional activity. If an attorney knowingly proffers altered documents in a context where the attorney knows or should know that action may be taken thereon, the attorney has engaged in conduct involving deceit8 in violation of the rule, whatever the ultimate intent or motives may have been in making such alterations. The latter may go to sanction, but not to the threshold issue of violation vel non.

It is instructive to examine respondent's own explanation for his conduct, as he testified at the hearing:

I was trying to accurately represent travel expenses, and in my mind . . . all I really did was try to put together a shorthand way of accounting for my travel expenses. Changing the receipts was a shortcut way to account for a lot of lacking receipts, sloppy bookkeeping, and when I was thinking about it, I didn't really think about it. It seemed like an easy way to avoid having to ask — Mr. Kramer, when he made the comments that everybody always gets compensated for receipts, maybe when you're a partner you do, but when you're an associate, people ask you questions and everything else, where are the receipts, how can you document it and so forth, these were at the end of some long days, and I really just didn't want administrative hassles, and this seemed like the easiest and neatest way to simply account accurately for incurred expenses in travel. . . . What I was simply doing was saying, look, this is a legitimate travel expense, and I was simply trying to provide the backup documentation, and I was doing it through the changed receipts.

It is difficult to reconcile respondent's own testimony with any assertion that he could not have expected anyone to act on the misrepresentations at any time. Indeed, by providing false backup documentation, he did achieve hassle-free reimbursement. The preference for documentation in the expense account field is hardly a secret. Respondent's own testimony shows he...

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  • MATTER OF ADDAMS
    • United States
    • D.C. Court of Appeals
    • August 6, 1990
    ...for commingling, misappropriation, making false statement and presenting false evidence to Bar Counsel). 16. See In re Schneider, 553 A.2d 206, 211-12 (D.C. 1989) (alteration of credit card receipts submitted by young associate to law firm for reimbursement in violation of DR 1-102(A)(4) (d......
  • IN RE ABRAMS
    • United States
    • D.C. Court of Appeals
    • February 5, 1997
    .... . ., our role in reviewing the Board's recommendation may be more assertive than in more familiar types of misconduct." In re Schneider, 553 A.2d 206, 211 (D.C. 1989); accord, In re Reback, 513 A.2d 226, 230 (D.C. 1986) (en banc). We should also give some consideration in our calculus to ......
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    ...determining the appropriate sanction for attorney misconduct. See In re Ponds, 888 A.2d 234, 240–44 (D.C.2005); see also In re Schneider, 553 A.2d 206, 212 (D.C.1989) (Board recommended six-month suspension as disciplinary process had “dragged” into sixth year); In re Hessler, 549 A.2d 700,......
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