Utz, In re

• Decision Date: 30 March 1989
• Docket Number: No. S005651,S005651
• Citation: 256 Cal.Rptr. 561,48 Cal.3d 468,769 P.2d 417
• Court: California Supreme Court
• Parties: , 769 P.2d 417 In re Jerome C. UTZ on Disbarment.

Page 561

256 Cal.Rptr. 561

48 Cal.3d 468, 769 P.2d 417

In re Jerome C. UTZ on Disbarment.

No. S005651.

Supreme Court of California,

In Bank.

March 30, 1989.

Rehearing Denied May 3, 1989.

Jerome C. Utz, in pro. per., Sondra Lee Utz and Utz & Utz for petitioner.

Diane C. Yu, Oakland, Truitt A. Richey, Jr., Richard J. Zanassi, San Francisco, Gregory B. Sloan, Oakland, and Marilyn Winch for respondent.

BY THE COURT ^*

We review the unanimous recommendation of the Review Department of the State Bar Court that petitioner, Jerome C. Utz, be disbarred from the practice of law. The recommendation is based on petitioner's conviction of seven counts of mail fraud (18 U.S.C. § 1341) and two counts of using interstate transportation to defraud individuals (18 U.S.C. § 2314).

We placed petitioner on interim suspension, to commence on March 2, 1984, pending the finality of petitioner's conviction. In July 1986, after petitioner's conviction was final, we referred the matter to the State Bar for hearing, report and recommendation of the appropriate discipline.

The hearing panel, composed of a single referee, recommended, pursuant to standard 3.3 of the Standards for Attorney Sanctions for Professional Misconduct (Rules Proc. of State Bar, div. V), that petitioner be summarily disbarred under Business and Professions Code section 6102, subdivision (c). ¹ The referee also determined that if section 6102, subdivision (c) did not apply, he would still recommend disbarment pursuant to standard 3.2 of the Standards for Attorney Sanctions, which calls for disbarment if the crime involves moral turpitude unless the most compelling mitigating circumstances clearly predominate. The review department unanimously adopted these findings and recommendations.

Petitioner contends that many of the findings and conclusions of the State Bar are erroneous. He contests the State Bar's recommendation of disbarment. He alleges this court's decision to place him on interim suspension and the excessive length of the suspension violated his constitutional rights. He also argues that the State Bar violated his Fifth Amendment rights and his right to an impartial hearing. After reviewing the record and petitioner's objections, we conclude that disbarment is the appropriate discipline, but under section 6102, subdivision (d) rather than section 6102, subdivision (c).

I. FACTS

Petitioner was admitted to the State Bar in 1961, and was a deputy attorney general when the events underlying this matter occurred. In 1978, petitioner left the Attorney General's office and entered private practice until this court suspended him in 1984.

In 1973, the Attorney General's office assigned petitioner, on a part-time basis, to the Monterey Park Task Force (MPTF). The MPTF was a group of federal, state, and local law enforcement authorities charged with the investigation of prison gangs. While petitioner was assigned to the MPTF, United States Marshal Art Van Court introduced him to David Pedley, a federal informant serving time for various fraud-related crimes in Placerville. Petitioner claims that during 1974-1975 Pedley identified various members of prison gangs for him. Petitioner's supervisors did not authorize him to associate with Pedley or any other federal witness.

In 1976, when Pedley was paroled from state custody, federal authorities approved his relocation in Cameron Park, California under the name of "Wellington." ² Wellington and his son formed two companies, Pacific Park Properties (PPP) and Diamond Pacific Realty (DPR), for the purpose of setting up a land sales operation in Cameron Park. An associate of Wellington, Mike Cano, started Cano Construction Company (CCC). Petitioner became involved in this operation, and essentially was a "silent partner" of the business. ³

Wellington and his associates solicited investors for their operation. They made several misrepresentations to them. First, they claimed that the lots they were selling were not burdened with any liens or encumbrances even though they knew all of the lots were subject to substantial liens, many of which were the subject of foreclosure proceedings. Second, Wellington and his associates repeatedly misrepresented their experience in constructing homes. Additionally, PPP, which purportedly owned some of the lots, was eventually found not to have had any interest in them whatsoever. In the meantime, Wellington and his associates diverted funds from the Cameron Park project to unrelated real estate ventures and other private undertakings. They leased several Mercedes automobiles and began to develop a potential television series concerning the federal sensitive witness program. As a result, many investors lost substantial amounts of money. In early 1978, CCC, PPP, and DPR were all forced to declare bankruptcy. ⁴

In June 1982, after a lengthy investigation, a federal grand jury indicted petitioner, Michael Cano, David Wellington and his son for aiding and abetting nine counts of mail fraud (18 U.S.C. § 1341) and two counts of interstate transportation to defraud (18 U.S.C. § 2314). Following a four-month jury trial, petitioner was convicted on nine of the eleven counts. He was sentenced to three years' imprisonment concurrently on each count, with imposition of all but six months suspended on condition that he be placed on probation for three years. Petitioner's conviction was affirmed by the Ninth Circuit. (United States v. Wellington (1985) 754 F.2d 1457 cert. den. 474 U.S. 1032, 106 S.Ct. 592, 88 L.Ed.2d 573.)

In addition to the facts underlying the conviction, the State Bar Court made findings of fact with respect to incidents related to the conviction.

1. Petitioner's Trip to New Jersey

In November 1977, Wellington was to be sentenced for a mail fraud conviction in New Jersey. Fearful that he might be sentenced to prison, he contacted the United States Attorney in New Jersey handling the matter, and requested that he contact petitioner to verify that he was a "cooperating individual" with the Attorney General's office. Petitioner confirmed that Wellington worked for the California Attorney General's office and any decision to imprison him would hinder an ongoing investigation.

At the New Jersey sentencing hearing, petitioner appeared in chambers of the presiding federal court judge and was introduced as a deputy attorney general from California. The judge considered placing Wellington on formal probation. Petitioner tried to persuade the judge to place Wellington on informal probation in order to protect his identity. Petitioner stated if Wellington's identity was revealed, it would compromise an ongoing investigation. The judge sentenced Wellington to time previously served and informal probation.

The Attorney General's office did not authorize petitioner to go to New Jersey. He could not validly claim that his visit in November 1977 related in any way to the MPTF because his duties with the MPTF had ended in January 1977. In addition, the Attorney General's office did not have an ongoing investigation which would have been compromised if Wellington had been identified.

2. Wellington's Credit Application (Bearup letter)

In August 1977, Wellington applied for an equipment lease from Donald Smith, the president of Interlease Financial Corporation. Smith advised Wellington that his credit could not be approved if he failed to submit copies of his federal income tax returns. In response to Smith's concern, Wellington provided Smith with a letter from Warren Bearup, Deputy United States Marshal (hereinafter the Bearup letter). The Bearup letter indicated that Wellington's tax returns were confidential and could not be copied for "extreme security reasons."

At petitioner's criminal trial, a government witness testified that the Bearup letter was initially prepared at petitioner's direction for another company nine months earlier. According to the witness, petitioner told him that he waited for United States Marshal Art Van Court to go on vacation. He then went to the United States Marshal's office and dictated the letter to Warren Bearup. Petitioner used his position as a deputy attorney general to gain access to the United States Marshal's office and persuade Bearup to type and sign the letter. The purpose of the letter was to keep Wellington in the land investment scheme. In addition, petitioner used his position as a deputy attorney general to lull Smith into a false sense that Wellington was totally clear of any past criminal misdeeds.

3. Legal Name Change in Washington

In February 1978, petitioner accompanied David and his son Mark Wellington to Olympia, Washington. Mark and David had used the Wellington name in lieu of their former name, but the change had never been formalized. Petitioner presented a petition in the judge's chambers requesting the name change. Petitioner informed the judge that David and Mark had been doing undercover work in California, and that they had moved to Olympia.

Petitioner knowingly misrepresented Mark and David's status to the judge. Petitioner knew the Wellingtons had no plans to move to Washington and their undercover work had ended well before they appeared in Washington.

4. Using Position as Deputy Attorney General to Give Credibility to Fraudulent Land Sale Scheme

Petitioner used his position as a deputy attorney general to assure a potential investor that the land sale project was safe. Several investors did not commit to the project until they were aware petitioner worked for the Attorney General's office. He told one potential investor that the Wellingtons were trustworthy and the investment project would be a sound investment. The investor relied on this information, and also informed other prospective investors about the assurances he received from an "Attorney General of the State of California" concerning the land investment project.

II. PROCEDURAL ISSUES

A. Appointment of a Single Referee

Petitioner...