DISTRICT OF COLUMBIA COURT OF APPEALS BOARD OF PROFESSIONAL RESPONSIBILITY REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY

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1 DISTRICT OF COLUMBIA COURT OF APPEALS BOARD OF PROFESSIONAL RESPONSIBILITY In the Matter of: : : MARIA C. MENDOZA, : : Respondent. : Bar Docket No : A Member of the Bar of the : District of Columbia Court of Appeals : (Bar Registration No ) : REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY This matter is before the Board on Professional Responsibility (the Board ) based on a Specification of Charges filed by Bar Counsel on or about August 28, Respondent is charged with violating D.C. Rule of Professional Conduct ( Rule ) 8.4(c) of the District of Columbia Rules of Professional Conduct (dishonesty, fraud, deceit or misrepresentation) stemming from her alleged misconduct with respect to a factoring agreement that she entered into with one Nadean Pedersen. The matter was heard by Hearing Committee Three on November 13 and November 18, The parties stipulated to most of the facts in the case, and Respondent further stipulated that her conduct with respect to the factoring agreement violated Rule 8.4(c) in that she engaged in conduct involving dishonesty, deceit and misrepresentation. Joint Stipulation ( Stip. ), 23. After the hearing, Bar Counsel and Respondent recommended a one-year period of suspension. In a Report and 1 Tr. I refers to the transcript of the November 13, 2003 hearing, and Tr. II refers to the transcript of the November 18, 2003 hearing.

2 Recommendation issued on July 30, 2004 (the HC Rpt. ), the Hearing Committee found that Respondent violated Rule 8.4(c) and recommended a 30-day suspension, with the suspension stayed and Respondent placed on probation for one year. As a condition of probation, the Hearing Committee recommended that Respondent continue to make payments pursuant to the order of the United States Bankruptcy Court in connection with Respondent s Chapter 13 bankruptcy petition filed on or about August 2, Bar Counsel has taken exception to the Hearing Committee s sanction recommendation, in favor of a one-year suspension. Oral argument in the matter was held before the Board on November 18, FINDINGS OF FACT The Board has reviewed and adopts the findings of fact made by the Hearing Committee, which are set forth below with minor editorial changes and with some nonessential material omitted. For the sake of clarity and completeness, the Board has included certain additional factual findings based on clear and convincing evidence in the record. See Board Rule Additional findings made by the Board are indicated by reference to the record. 1. Maria C. Mendoza is a member of the Bar of the District of Columbia Court of Appeals, having been admitted on November 22, HC Rpt. at 2, 1. 2 Respondent filed for bankruptcy and pursuant to the bankruptcy plan she is required to make payments to Ms. Pedersen. 2

3 2. In 1994 or 1995, Respondent began accepting court appointments under the Criminal Justice Act ( CJA ) to represent individuals in the D.C. Superior Court (the Court ). HC Rpt. at 2, During the relevant period in this matter, , Respondent received compensation from the Court for her services pursuant to the CJA. After being appointed to a case, Respondent was given a CJA voucher to submit to the Court at the completion of the case. Prior to Respondent s receipt of the CJA voucher, either the Court or the CJA office would type in the case name and docket number, the type of case, the voucher number, and other information including Respondent s name and date of appointment in the case. HC Rpt. at 2 3, Respondent was responsible for completing the voucher, including a description of the services performed and expenses incurred, and then submitting the voucher to the CJA office after the conclusion of the case. The CJA office would review the completed voucher and forward it for the approval of the Judge or Hearing Commissioner who had presided over the case. The Judge or Hearing Commissioner would sign and date the approved voucher, which was then returned to the CJA office for payment. HC Rpt. at 3, Ms. Nadean Pedersen is a member of the Bar of the State of Maryland and works for the County Attorney s Office in Montgomery County. She started a factoring business in Ms. Pedersen is the complainant in this case. HC Rpt. at 3, 5. 3

4 6. On or about July 8, 1996, Respondent and Ms. Pedersen entered into a written contractual agreement called a Factoring Agreement for CJA Vouchers. Under the factoring agreement, Respondent would submit to Ms. Pedersen copies of the completed CJA vouchers she had submitted to the Court. Ms. Pedersen would then pay Respondent 80% of the amount claimed in the CJA voucher. Later, when Respondent received her reimbursement from the Court, she would endorse the check to Ms. Pedersen. Ms. Pedersen would compare the check against the copy of the CJA voucher she had received from Respondent. HC Rpt. at 3 4, 6. Respondent was responsible for compensating Ms. Pedersen for any deficiency resulting from the Court s reduction of a voucher amount below the amount advanced by Ms. Pederson. Respondent also paid fees determined by the length of time between the day Respondent received payment from Ms. Pedersen and the day Respondent submitted the check from the Court to Ms. Pedersen. Id.; Tr. I at 17 19; Bar Counsel s Exhibit 1 at 4 (Factoring Agreement for CJA Vouchers). 7. At the commencement of the factoring arrangement between Respondent and Ms. Pedersen, Respondent orally represented to Ms. Pedersen that each copy of a CJA voucher submitted to Ms. Pedersen for payment had already been submitted to the Court for payment. Stip., 15. Ms. Pedersen relied upon Respondent s representation that each voucher submitted for factoring had already been submitted to the Court in deciding to pay funds to Respondent. Stip., 19. 4

5 8. From July 1996 to the summer of 1997, Respondent and Ms. Pedersen performed in accordance with the factoring agreement without incident. HC Rpt. at 4, On or about June 1997, Respondent began depositing into her office account the checks she received from the Court, instead of endorsing them to Ms. Pedersen, and she began repaying Ms. Pedersen the sums advanced on CJA vouchers with her own checks, in order to pay off the oldest vouchers for which the most fees were owed. HC Rpt. at 4, Beginning on October 30, 1997, and continuing through February 1998, Respondent submitted copies of CJA vouchers to Ms. Pedersen for factoring that had not previously been submitted to the Court. HC Rpt. at 4 9. Respondent admits that she did so with the intent to mislead Ms. Pedersen into believing the vouchers had been submitted to the Court, in order to obtain funds from Ms. Pedersen before the case was completed and the vouchers were submitted to the Court. HC Rpt. at 5, 11; Tr. II at 40; Stip., 20. The vouchers that Respondent submitted to Ms. Pedersen were materially different from the actual vouchers Respondent eventually submitted to the Court in that they contained different disposition dates, different amounts claimed, and different case dispositions. HC Rpt. at 4 9. Respondent submitted at least 27 such false vouchers to Ms. Pedersen. HC Rpt. at 5, 10. Respondent did not inform Ms. Pedersen of the discrepancies. To the contrary, each voucher submitted to Ms. Pedersen for factoring included Respondent s signature 5

6 under preprinted language stating that she swore and affirmed the truth and correctness of the voucher. HC Rpt. at 4 5, Respondent was having financial troubles during the period in question, in part because of delays in the Court s payment of CJA vouchers. Respondent s testimony that between September and December of 1997 the payment process for CJA vouchers was chaotic was uncontradicted. HC Rpt. at 5, 11. In addition, for one of the vouchers factored by Ms. Pedersen, Respondent was reimbursed by the United States District Court for the District of Columbia at an amount below the amount paid by Ms. Pedersen. Under the factoring agreement, Respondent was responsible for paying the difference back to Ms. Pedersen as well as interest and fees on the amount advanced, which further exacerbated her financial condition. HC Rpt. at 5, Late in 1997, Ms. Pedersen realized that she had advanced funds to Respondent on quite a few vouchers for which she had not been repaid. The amounts that Respondent owed to Ms. Pedersen were increasing, and Ms. Pedersen encouraged Respondent to repay her for the advances on some of the older vouchers and to contact the CJA office to determine when checks would be forthcoming. HC Rpt. at 5, Ms. Pedersen inquired whether Respondent had received checks from the Court on some of the factored vouchers. The evidence and testimony do not show that Respondent made any false representations to Ms. Pedersen concerning her receipt of payments from the Court. The correspondence 6

7 between Ms. Pedersen and Respondent in the spring of 1998 shows that Respondent made no representations to Ms. Pedersen about payments on outstanding vouchers. In response to Ms. Pedersen s inquiry, Respondent explained that when she received a check from the Court she would use the funds to pay the oldest vouchers to reduce her debt, based on Ms. Pedersen s suggestion. In other words, the record shows that at some point during the period of the factoring arrangement, Ms. Pedersen agreed to accept repayment for factored vouchers from funds that Respondent received from the Court on other vouchers, or from other income. HC Rpt. at 6, Ms. Pedersen terminated her factoring business in 1998, because she was depleted of cash as a result of Respondent s failure to turn the CJA checks over to her or otherwise repay the funds advanced. HC Rpt. at 6, On or about August 2, 1999, Respondent filed for Chapter 13 bankruptcy protection in the United States Bankruptcy Court and listed her debt to Ms. Pedersen as $42,092. Ms. Pedersen claimed a debt of $47,000. As of the date of the parties joint stipulation in this case, Respondent had paid Ms. Pedersen, through the United States Bankruptcy Court, $20, HC Rpt. at 6, Respondent s source of income is from her practice of law, and she has no other source of income or assets she could use to comply with the payment plan ordered by the Bankruptcy Court. HC Rpt. at 7, 16. 7

8 17. Respondent stipulated that her conduct in connection with Ms. Pedersen and the factoring agreement violated Rule 8.4(c) in that she engaged in conduct involving dishonesty, deceit and misrepresentation. HC Rpt. at 7, There was no evidence of aggravating factors, apart from the misconduct itself and the prejudice to Ms. Pedersen in that she was forced to close her business. In mitigation, there was no evidence of prior discipline. Respondent also submitted five letters of recommendation from character witnesses and presented the testimony of Sue Ann Marie Hecht in support of mitigation of sanction. The letters were admitted into evidence without objection from Bar Counsel. The letters and testimony describe Respondent s dedication to her clients and her willingness to assist, often pro bono, Spanish-speaking individuals with legal problems. HC Rpt. at 7, 18. CONCLUSIONS OF LAW The Board concurs with the conclusions of law reached by the Hearing Committee. Based on the evidence before it, including the exhibits, testimony and the joint stipulation, the Board concludes that Respondent did indeed violate Rule 8.4(c), in that her conduct with respect to the factoring arrangement with Ms.Pedersen was dishonest, deceitful and involved misrepresentations. We agree with the Hearing Committee s conclusion, which is supported by Respondent s testimony and stipulations, that Respondent intentionally and dishonestly signed at least 27 false CJA vouchers, under pre-printed language attesting to their 8

9 accuracy, and then submitted copies of the vouchers to Ms. Pedersen for factoring. The vouchers were false in that they contained different disposition dates, different amounts claimed, and different case dispositions than the vouchers that later were actually submitted to the Court. 3 By falsely attesting to the accuracy of the vouchers, Respondent was dishonest and made misrepresentations in violation of Rule 8.4(c). See In re Soininen, Bar Docket Nos & at 12 (BPR Jul. 25, 2003) (the respondent violated Rule 8.4(c) by filing notices of appearance that misrepresented her status with the Bar), aff d in relevant part, 853 A.2d 712 (D.C. 2004); In re Uchendu, 812 A.2d 933 (D.C. 2002) (deliberate falsification of documents is sufficient to support finding of dishonesty). Further, Respondent implicitly held out the false vouchers as having been submitted to the Court prior to their submission to Ms. Pedersen, consistent with Respondent s representations to Ms. Pedersen at the outset of the factoring relationship. 4 Respondent did so with the express purpose of deceiving Ms. Pedersen into giving her cash in advance of when Respondent could have obtained it had she waited and submitted copies of the vouchers actually submitted to the Court. In In re Schneider, 553 A.2d 206, 209 (D.C. 1989), the Court held, 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 deceit in violation of the rule, whatever the ultimate intent or motives may have been in making such 3 Because these vouchers were submitted to Ms. Pedersen before the conclusion of a case, they necessarily contained Respondent s estimate of what she thought she would claim from the Court, and thus there were material differences between these vouchers and the actual vouchers later submitted to the Court. 4 The record is devoid of any evidence that Respondent specifically told Ms. Pedersen that the 27 false vouchers had been submitted to the Court. However, by presenting the vouchers to Ms. Pedersen without informing her otherwise, Respondent implicitly represented that the vouchers had been submitted to the Court in accordance with her initial understanding with Ms. Pedersen. See, e.g., In re Mitchell, 727 A.2d 308, 315 (D.C. 1999) ( Concealment or suppression of a material fact is as fraudulent as a positive direct misrepresentation. ). 9

10 alterations. The latter may go to sanction, but not to the threshold issue of violation vel non. Thus, Respondent additionally violated Rule 8.4(c) by knowingly proffering the false vouchers as having been submitted to the Court, in order to deceive Ms. Pedersen into advancing her money. See id.; cf. In re Romansky, 825 A.2d 311 (D.C. 2003) (remanding to Board for clarification of its findings concerning intent, where dishonest intent could not be established by the wrongful conduct itself). RECOMMENDED SANCTION The Hearing Committee has recommended a sanction of a 30-day suspension, with the suspension stayed and Respondent placed on a one-year period of unsupervised probation conditioned on (1) Respondent s successful payment of debts as required under the Bankruptcy Court order, and (2) her submission of quarterly reports to the Board, with a copy to Bar Counsel, regarding payments required by the Bankruptcy order. While Respondent initially concurred, in her brief to the Hearing Committee, with Bar Counsel s recommendation of a one-year suspension, she now concurs with the recommendation of the Hearing Committee. Bar Counsel continues to recommend a oneyear suspension for Respondent. The Board disagrees with both recommendations. First, we disagree with the sanction recommendation of the Committee, because it appears to rely too heavily on the Committee s conclusion that the purported inherent delays within the court system for making CJA payments should mitigate the sanction. 5 Assuming without opining that such delays existed, this in no way justifies Respondent s course of deceit. 5 See HC Rpt. at The Hearing Committee reasons that had the CJA system been functioning properly, the factoring business that led to the violations may not have existed. Id. at 10 n.3. 10

11 Second, we disagree with Bar Counsel that the misconduct is aggravated because Respondent acted for personal financial gain. This argument conflicts with the Hearing Committee s findings that Respondent did not seek anything that was not due her, 6 and was simply attempting to enforce her right [to payment from Ms. Pederson] before it accrued 7 findings which are supported by substantial evidence. The facts show that Ms. Pedersen had agreed to advance monies to Respondent pursuant to the understanding that a voucher or vouchers for payment from the Court had been submitted to the Court, and that when Respondent received payment from the Court, she would endorse the check to Ms. Pedersen. As the Hearing Committee notes, there has been no evidence presented that the copies of vouchers submitted to Ms. Pedersen prior to being submitted to the Court did not accurately reflect services rendered by Respondent, and thus she ultimately was (or should have been) paid for those services by the Court or the CJA office. HC Rpt. at 15. While there are some discrepancies between the amounts on some of the vouchers submitted to the Court and the supposed copies submitted to Ms. Pedersen, Bar Counsel has neither argued nor presented sufficient evidence for us to conclude that the discrepancies resulted in Respondent s obtaining more funds than she thought would become due to her in the future. Thus, we find that in presenting vouchers to Ms. Pedersen that had not yet been submitted to the Court, Respondent was prematurely seeking funds to which she believed she would become entitled under the factoring arrangement in the future. 6 HC Rpt. at HC Rpt. at

12 In the Board s estimation, the appropriate sanction thus lies between the one-year suspension imposed in In re Hutchinson, 534 A.2d 919 (D.C. 1987) (en banc) at the high end and the 30-day suspension imposed in Schneider, 553 A.2d at 206, at the low end. In Hutchinson, the respondent participated in insider trading and then falsely testified under oath in an administrative investigation by the Securities and Exchange Commission. 8 The respondent was convicted of a misdemeanor with respect to the insider trading and subsequently disciplined with a one-year suspension. 534 A.2d at Unlike Hutchinson, Respondent has not been convicted, did not lie under oath to an official investigative body or tribunal and, as discussed above, did not seek any personal gain due to her conduct. The instant matter is more comparable to Schneider and a similar case, In re Bikoff, 748 A.2d 915 (D.C. 1995) (per curiam). In Schneider, 553 A.2d at 206, the respondent was suspended for 30 days for altering credit card receipts for travel expenses to recoup expenses to which he believed he was entitled. 9 The respondent altered the receipts by overstating the amounts to reflect additional amounts for travel expenses for which he did not have receipts. Those acts occurred over a seven month period roughly comparable to the approximately four month period over which Respondent s transgressions occurred. The Court of Appeals concluded that the respondent in Schneider did not act for personal gain because he thought that he was entitled to the money. 8 While it appears the respondent did not know at the time of the trading that he was relying on insider information, he did become aware of that fact prior to testifying and nevertheless denied under oath speaking to the source of the information. 534 A.2d at It is important to note that the Board initially recommended a one-year suspension in Schneider and after remand by the Court, the Board recommended a six-month suspension. 553 A.2d at

13 In Bikoff, the respondent, who had been a member of this Bar for 20 years, was suspended for 60 days for dishonesty and deceit in connection with his intentional misclassification of more than $100,000 in expenses on clients bills over a four-year period, in order to avoid client scrutiny of the expenses (e.g., secretarial overtime was billed as long-distance charges). In re Bikoff, Bar Docket No at 2-3 (BPR May 2, 1995). Like the respondents in Schneider and Bikoff, it appears that Respondent acquired funds to which she thought she did have a right, albeit prematurely and deceitfully. Despite the similarity, however, Respondent s conduct here is more egregious. In Schneider, the respondent was in the first year of his practice when he committed his violations; Respondent had been practicing for approximately five years when her misconduct occurred. Further, the respondent in Schneider altered a total of eight credit card receipts. Here, there were at least 27 instances in which Respondent submitted false copies of vouchers 10 to Ms. Pedersen and deliberately gave Ms. Pedersen the false impression that the originals had been submitted to and were pending before the Court. Most significantly, Respondent s willingness to create false copies of Court documents, and to swear on the face of these documents that they were true and correct, makes her conduct more serious than in either Bikoff or Schneider. See Soininen, 853 A.2d at 732 (imposing six-month suspension where the respondent filed notices of appearance in 10 As noted above, there were disparities between the false copies of vouchers submitted to Ms. Pedersen and the vouchers that were later submitted to the Court, due to Respondent s estimates of what she thought she would receive from the Court. There was, however, no evidence to show that any inaccurate vouchers were submitted to the court. See transcript of oral argument by Bar Counsel before the Board, Nov. 18,

14 which she falsely represented herself to administrative agencies and clients to be a member in good standing of the Bar). Respondent s conduct is also more serious than that of the respondent in Uchendu, 812 A.2d at 933, in which the respondent received a 30-day suspension for improperly signing his clients names on court documents and notarizing some of his own signatures on these documents. The respondent in Uchendu had his clients authorization to sign the documents, did not falsify substantive information, and did not prejudice anyone as respondent prejudiced Ms. Pedersen. Respondent deceived Ms. Pedersen into believing that all sums she advanced to Respondent were secured by vouchers filed with the Court, such that payment from the Court would be forthcoming. In fact, Respondent had not filed the vouchers with the Court, thus placing Ms. Pedersen s money at risk. Ms. Pedersen had to close her business because she was depleted of cash as a result of Respondent s failure to turn the CJA checks over to her or otherwise repay the sums advanced. Unlike Schneider, Bikoff, and Uchendu, Respondent s violations did not directly relate to the representation of clients a fact that the Board takes into consideration in determining the appropriate sanction. See In re Kennedy, 542 A.2d 1225, 1230 (D.C. 1988) (noting that dishonest actions committed outside of the representation of a client need not necessarily be sanctioned to the same degree as similar acts committed in the course of representation. ). In Kennedy, the Court suspended the respondent for 90 days for giving false information as to his salary on a bank loan application and other acts including failure to pay bar dues and withholding fees from his law firm. The Court in Kennedy appears to have been swayed in its sanction determination by respondent s prior discipline and his 14

15 apparent lack of remorse. 11 In In re Cleaver-Bascombe, Bar Docket No (BPR Dec. 17, 2004), the Board recommended suspending the respondent for three months for submitting one false CJA voucher to the Court in which she claimed fees for meetings that never occurred. Here, although the record does not show that Respondent submitted any false vouchers to the Court, she did submit at least 27 false vouchers to Ms. Pedersen over an extended period of time. The Board is troubled by Respondent s pattern of misconduct, and particularly by her repeated false affirmations on the vouchers as to their accuracy and her ongoing deception in allowing Ms. Pedersen to believe the vouchers had been submitted to the Court representations Ms. Pedersen apparently relied on in disbursing the funds. However, we also take into consideration her lack of prior discipline and her pro bono activities, her tremendous remorse and acceptance of full responsibility for her actions, her cooperation with Bar Counsel and the Hearing Committee, and the fact that her actions did not affect clients. Accordingly, based on the foregoing, the Board believes that a sanction similar to that imposed in the Kennedy and Cleaver-Bascombe matters is in order, and the Board recommends a 90-day suspension. The Hearing Committee recommended staying the period of suspension in favor of a period of probation, as a means of ensuring that Respondent continues making payments pursuant to the Bankrupty Court order and as a form of leniency. The payments to Ms. Pedersen are already mandated by the Bankruptcy Court order. Further, we do not believe any purpose would be served by probation, where Respondent s 11 The respondent in Kennedy was previously informally admonished for violations including neglect, failure to seek a client s lawful objectives, failure to carry out a contract of employment and failure to deliver property to a client. 15

16 misconduct was not the result of practice-related problems that a period of probation might ameliorate, but was instead dishonest and deceitful. Cf. In re Edwards, No. 00-BG-552 (D.C. Mar. 17, 2005); In re Bettis, 855 A.2d 282 (D.C. 2004); In re Pullings, 724 A.2d 600 (D.C. 1999) (per curiam); In re Spaulding, 635 A.2d 343 (D.C. 1993) (per curiam). CONCLUSION Accordingly, the Board recommends that Respondent be suspended for 90 days. BOARD ON PROFESSIONAL RESPONSIBILITY By: Charles J. Willoughby Dated: July 27, 2005 All members of the Board concur in this Report and Recommendation except Ms. Coghill-Howard, who is recused, and Ms. Helfrich and Dr. Payne, who did not participate. 16