Leonard, In re
| Decision Date | 01 October 1976 |
| Docket Number | No. 48344,48344 |
| Parties | , 1 Ill.Dec. 62 In re John M. LEONARD, Jr., attorney, Respondent. |
| Court | Illinois Supreme Court |
William J. Martin, Ltd., Chicago, for respondent.
Mary M. Conrad, Chicago, for the Administrator of the Attorney Registration and Disciplinary Commission.
This is a disciplinary proceeding pursuant to Supreme Court Rule 751 (Ill.Rev.Stat.1975, ch. 110A, par. 751) against respondent, John M. Leonard, Jr., for engaging in conduct unbecoming a member of the legal profession, and involving dishonesty, fraud, deceit, misrepresentation and moral turpitude. The Hearing Board of the Attorney Registration and Disciplinary Commission unanimously recommended that respondent be suspended from the practice of law for a period of three years. on consideration by the Review Board, with one member dissenting, the recommendation was modified with the addition that the suspension should be for a period of three years and until further order of the court. Respondent contests the propriety of that sanction.
On January 30, 1974, a 21-count criminal indictment, No. 74 CR 75, was returned and filed in the United States District Court, Northern District of Illinois, Eastern Division, against respondent and certain other named defendants. Following plea negotiations, respondent entered a plea of guilty on January 2, 1975, to counts 1 and 21 of the indictment, which charged the offenses of knowingly, wilfully and unlawfully conspiring to commit offenses against the United States, to-wit: using the United States mail to scheme and defraud, and utilizing facilities in interstate commerce to promote the unlawful activity of bribery; and, also, unlawfully assisting in the preparation of fraudulent Federal corporate income tax returns; in violation of title 18, section 371, and title 26, section 7206(2), United States Code. On February 18, 1975, respondent was convicted and sentenced to three years imprisonment on each of counts 1 and 21, the sentences to run concurrently, but the execution of the sentences was suspended and respondent was placed on probation for three years and ordered to pay a fine of $15,000. All other counts of the indictment were dismissed on the motion by the government.
Respondent's conviction resulted from his involvement in bribery payments allegedly made to the late Paul Powell, as Secretary of State, in connection with a State contract for the manufacturing of motor vehicle license plates. In February 1969, an out-of-State firm was awarded the contract for manufacturing the license plates. James P. Manning, who acted as a consultant to Powell on license plate matters, also had a manufacturer's representative contract with this out-of-State firm, which entitled him to a sales commission on each license plate sold to the State. Respondent was recruited by Talmadge Rauhoff, a codefendant in the indictment, to organize Structolite, Inc., as an Illinois corporation to act as manufacturer's representative. Manning, who became one of the beneficial owners of the stock of Structolite, assigned his commission contract to the corporation. A portion of the proceeds of the deposits in Structolite's account, which were derived from commission payments, would be withdrawn in the form of purported salary checks which would then be converted into cash for the bribery payments. Respondent organized the corporation under the laws of Illinois, knowing full well that a protion of its function would be to funnel a substantial amount of money to Powell as bribes in connection with the license plate contract. In addition to signing 10 to 20 checks on the Structolite account, respondent assisted in cashing checks on two occasions at a Chicago bank and the cash generated therefrom was used as bribes. In reference to the preparation of a fraudulent income tax return, the facts show that for a period of time respondent maintained the checkbook and corporate records of Structolite. He furnished these records to the accountant who prepared the income tax form, knowing that they reflected a false amount of compensation paid to a member of the corporation, since the compensation paid was substantially less than indicated. The difference between the amount of compensation recorded and that actually paid provided cash for the bribery payments.
At the proceedings before the Hearing Board, respondent testified in mitigation to the circumstances surrounding his involvement in the offenses. Respondent stated that he did not know Paul Powell other than having casually met him in a reception line at a cocktail party. During his organization of Structolite, he had no communication of any type with Powell, except for sending the articles of incorporation to Powell as Secretary of State. He explained that Talmadge Rauhoff was an acquaintance of long standing and that he and his law firm did legal work for Rauhoff. In August 1969, Rauhoff asked respondent to organize Structolite. Respondent expressed the belief that Structolite was not organized merely to be a dummy corporation, but was initiated with the thought of eventually entering the plastic business. In this regard, respondent and his firm assisted Structolite in the purchase of a plastics company and a tract of real estate. For these services, including the incorporation, which covered a period of time from 1969 to 1971 or 1972, respondent's firm charged Structolite approximately $4000. Respondent testified that other than these fees, he received none of the proceeds from Structolite, and at no time did he give Powell or anyone on his behalf any money in connection with Structolite. He further stated that in the course of entering his guilty plea he agreed to truthfully relate his knowledge of the circumstances surrounding this case to the United States attorney.
During cross-examination, respondent admitted he was not only the attorney for Structolite, but also was the corporate secretary, a director and a consultant to the corporation. He maintained the books and records for Structolite and was authorized to sign checks. He stated, however, that he did not receive compensation for the positions he held with the corporation.
On questioning by the Hearing Board, respondent related that he drew somewhere between 10 and 20 checks over a one-year period of time, while three or four times that many were issued by the corporation. He admitted that he knew certain checks were written for the purpose of generating money to be paid as bribes to Powell. Respondent recalled a conversation at a Chicago hotel among Rauhoff, an employee who worked for Powell, and himself, wherein they discussed the payment of money by Structolite to Powell. He also recalled a telephone conversation with Rauhoff when the subject was again discussed. He directed Rauhoff not to pay the money,...
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