AND ANSWER TO FIRST AMENDED COMPLAINT. Respondent, ARTHUR GEORGE JAROS JR., by his attorney, Stephanie Stewart-Page of

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1 In the Matter of: BEFORE THE HEARING BOARD OF THE... ^ «. ILLINOIS ATTORNEY REGISTRATION JAN 1 UZ014 AND DISCIPLINARY COMMISSION FILED ATT R?AP! C COMM CHICAGO ARTHUR GEORGE JAROS JR., Commission No. 2013PR00073 Attorney-Respondent, No ANSWER TO FIRST AMENDED COMPLAINT Respondent, ARTHUR GEORGE JAROS JR., by his attorney, Stephanie Stewart-Page of The Gloor Law Group, LLC, hereby answers the First Amended Complaint as follows: RESPONDENT'S STATEMENT PURSUANT TO COMMISSION RULE 231 A. Respondent was admitted to the following jurisdiction on or about the dates indicated: Federal District Court Northern District of Illinois (1975) U.S. Tax Court (1981) Seventh Circuit U.S. Court ofappeals (1989) U.S. Supreme Court (2008) Federal District Court Western District of Wisconsin (2009) B. Respondent was licensed as a CPA in about 1976 and let the license go inactive in about Background (Incorporation of Eagle Cove Camp and Conference Center Inc.) 1. On or about May 15, 2002, Respondent's father, Arthur G. Jaros Sr., established a charitable trust entitled Arthur G. Jaros Sr. and Dawn L. Jaros Charitable Trust ("Jaros

2 Charitable Trust"). Respondent and his two younger siblings. Wesley A. Jaros ("Wesley") and Randall S. Jaros ("Randall"), were named trustees of the Jaros Charitable Trust. The Jaros Charitable Trust stated that its purpose was to "devote and apply... for the use of charitable, religious, and educational purposes and organizations... with special emphasis on the dissemination of the Word of God... purposes be interpreted broadly to include such things as Christian based camps, youth facilities, family services and other organizations of a Christian based charitable nature." 2. After Respondent's father's death, the Jaros Charitable Trust was funded with approximately 34 acres ofland located in Woodboro, Wisconsin, and $5,000,000 in cash. It was Respondent's idea, and the desire ofhis father and siblings, that the 34 acres ofland be used for developing a Bible camp. In addition to the 34 acres ofland, Respondent, as trustee ofthe Jaros Family Trusts, owned an additional 25 acres of land adjacent to the 34 acres, which would be available to the Bible camp's use. ANSWER: Admitted. 3. On or about December 17, 2004, Respondent drafted and executed a form entitled "Articles of Incorporation - Nonstock Corporation" to organize a corporation in the State of Wisconsin. On the form, the name ofthe corporation was listed as Squash Lake Christian Camp, Inc. ("SLCC") and the three directors of SLCC were listed as Respondent and his two siblings, Wesley and Randall. The listed purpose of SLCC was to "operate for religious purposes a Christian Bible Camp in Oneida County, Wisconsin..." Respondent incorporated SLCC as a notfor-profit organization exempt from federal income taxes under the Internal Revenue Code 26 U.S.C. 501(c)(3). Later, Respondent amended the name of Squash Lake Christian Camp, Inc.

3 ("SLCC") to Eagle Cove Camp and Conference Center. Inc. ("Eagle Cove Center"). ANSWER: Admitted, except for the last sentence. As to the last sentence, admitted that the name of the organization was so changed but denied that the amendment to the name was made by the Respondent. 4. At all times alleged in this complaint, Respondent was the President and Director of Eagle Cove Center. Respondent's two brothers were also directors and officers of Eagle Cove Center. In 2006, the estimated retail cost to develop Eagle Cove Center was $14,650,000. Affirmatively stated that the actual cost of development was estimated to be substantially less. 5. The land in Woodboro, Wisconsin where Respondent was seeking to develop Eagle Cove Center, as described in paragraph two, above, was zoned as a Single Family Residential and Residential and Farming zones. Due to these zoning restrictions, Respondent was denied permits from the town of Woodboro and Oneida County to develop Eagle Cove Center. Respondent spent more than four years unsuccessfully requesting and applying for rezoning and conditional use permits to allow Respondent and Eagle Cove Center to develop the Christian Bible camp. ANSWER: Denied that Respondent in his individual capacity was denied permits or requested or applied for permits. Denied that Respondent personally ever sought personal permission to develop the Christian Bible camp. The remaining allegations are admitted. Affirmatively stated that the development of the Christian Camp was by unanimous decision of the co-trustees of the charitable trust and of the directors of the non-stock corporation. 6. At various times in or about 2006 to the present, Respondent represented Eagle Cove Center as its attorney. As a result of Respondent's representation of Eagle Cove center, respondent had a fiduciary relationship with Eagle Cove Center that required him to exercise the highest degree ofhonesty, loyalty, and good faith. ANSWER: The first sentence is admitted but affirmatively stated that Eagle Cove Camp and Conference Center, Inc. has been and is represented by other attorneys-at-iaw and

4 that the scope of Respondent's representation was and is limited. Respondent neither admits nor denies the remaining allegations of Paragraph 6, as said allegations are not factual but state conclusions of law. To the extent an answer is deemed required, the allegations are denied. Conflict of Interest (Respondent's Representation ofjean D. Cooney) 7. In or about late 1978 or early 1979, Jean D. Cooney ("Mrs. Cooney") and John A. Cooney ("Mr. Cooney") hired Respondent's law firm, Richter & Jaros, to represent them in matters related to tax services, estate planning, estate administration, guardianship and litigation defense services. In or about the Spring of 1980, Respondent began to personally provide legal services to Mrs. and Mrs. Cooney. Respondent represented both Mrs. and Mr. Cooney, providing legal services, such as drafting trust agreements, until Mr. Cooney's death on August 5, After Mr. Cooney's death, Respondent continued to represent Mrs. Cooney. ANSWER: As to the first sentence, admitted only that Mr. and Mrs. Cooney hired Robert I. Richter to provide estate planning services and hired Respondent to provide income tax services. The remaining allegations of the first sentence are denied. As to the second sentence, admitted only that until April, 1993, Respondent provided only federal and Illinois income tax return preparation services. The remaining allegations of the second sentence are denied. Affirmatively stated that during May, 1993, the undersigned began providing estate planning services at the request of Mrs. Cooney. As to the third sentence, admitted that Respondent provided only federal and state tax services through May, Denied that Respondent ever drafted a trust agreement for either Mr. or Mrs. Cooney in that the trust agreements drafted for by them by Attorney Richter in 1979 were never terminated; admitted that Respondent drafted amendments to Mr. and Mrs. Cooney's 1979 trust agreements through August 5,1994. The fourth sentence is admitted. 8. At no time did Respondent have any familial or close familial relationship with Mrs. or Mr. Cooney. ANSWER: Admitted that Respondent was not a member of the Cooney family. Denied that Respondent did not have a close relationship with the Cooneys.

5 9. After Mr. Cooney's death, Respondent continued to represent Mrs. Cooney and drafted at least 15 Restatements or Amendments to Mrs. Cooneys' Trust Agreements until her death on October 16,2010. ANSWER: Paragraph 9 is admitted except as to the implication that any restatements or amendments were drafted after January, 2010, which implication is denied. 10. As a result of Respondent's representation of Mrs. Cooney, Respondent had an attorney-client relationship, which formed a fiduciary relationship obligating Respondent to act with honesty, loyalty, and good faith in counseling Mrs. Cooney in the disposition of her estate and trust. Respondent also had the duty to avoid placing himself in a position where Respondent's personal interests would conflict with the interests of Mrs. Cooney, to avoid engaging in transactions that benefited himself at the expense of Mrs. Cooney, her estate, or her trust, and avoid preparing restatements or amendments to the Jean D. Cooney Trust Agreement giving Eagle Cove Center $425,000. ANSWER: Respondent admits that he had an attorney-client relationship with Mrs. Cooney but neither admits nor denies the remaining allegations of Paragraph 10, as said allegations are not factual but state conclusions of law. To the extent an answer is deemed required, the allegations are denied. 11. Respondent breached his fiduciary duty by engaging in conduct, including but not limited to drafting restatements and amendments to Mrs. Cooney's trust agreements naming Eagle Cove Center as a beneficiary ofmrs. Cooney's trust, failing to communicate or explain the significance of the matter, failing to obtain consent or waiver, failing to advise Mrs. Cooney to seek out or procure independent legal advice concerning the designation ofeagle Cove Center in her trust agreement, and obtaining and distributing money to Eagle Cove Center, as described in paragraphs 12 through 23 below. ANSWER: Respondent neither admits nor denies the allegations of Paragraph 11, as

6 said allegations are not factual but state conclusions of law. To the extent an answer is deemed required, the allegations are denied. 12. In or about October, 2006, Respondent drafted a third restatement of the Jean D. Cooney Trust Agreement ("Third Restatement") that was executed by Mrs. Cooney on October 27, In Article Third, Section I of the Third Restatement, Mrs. Cooney designated certain non-profit organizations as beneficiaries to receive a specific pecuniary amount after her death. The Third Restatement named six non-profit organizations as beneficiaries to receive a share of $700,000 after Mrs, Cooney's death. SLCC was one of the six non-profit organizations designated a beneficiary, in the Third Restatement. The Third Restatement designated SLCC to receive $300,000. ANSWER: Admitted. 13. At no time before Mrs. Cooney executed her Third Restatement did Respondent explain to Mrs. Cooney that he had a potential conflict ofinterest in preparing the trust agreement designating SLCC as a beneficiary in her trust agreement to receive $300,000, make a full and frank disclosure ofall the relevant information regarding his personal interest in SLCC, and obtain consent or waiver from Mrs. Cooney regarding any potential conflict ofinterest. ANSWER: Admitted that Respondent did not specifically tell Mrs. Cooney that he had a "potential conflict of interest". The remaining allegations of Paragraph 13 are denied. In further answering, Mrs. Cooney was aware of Respondent's connection to the camp prior to naming it as a beneficiary. 14. At no time before Mrs. Cooney executed her Third Restatement did Respondent advise Mrs. Cooney to seek out or procure independent legal advice concerning the designation of SLCC as a beneficiary in her trust agreement. 15. In or about February 2007, Respondent drafted the fourth restatement of the Jean

7 D. Cooney Trust Agreement ("Fourth Restatement"), which was executed by Mrs. Cooney on February 20, In Article Third, Section I ofmrs. Cooney's Fourth Restatement, ten non profit organizations were designated as beneficiaries to receive a share of $822,500 after Mrs. Cooney's death. One of the ten non-profit organizations was Eagle Cove Center and was designated to receive $425,000 at Mrs. Cooney's death. 16. At no time before Mrs. Cooney executed her Fourth Restatement did Respondent explain to Mrs. Cooney that he had a potential conflict of interest in preparing the trust agreement designating Eagle Cove Center as a beneficiary in her trust agreement to receive $425,000, make a full and frank disclosure of all the relevant information regarding his personal interest in Eagle cove Center, and obtain consent or waiver from Mrs. Cooney regarding any potential conflict ofinterest. ANSWER: Admitted that Respondent did not specifically tell Mrs. Cooney that he had a "potential conflict of interest". The remaining allegations of Paragraph 16 are denied. In further answering, Mrs. Cooney was aware of Respondent's connection to the camp prior to naming it as a beneficiary. 17. At no time before Mrs. Cooney executed her Fourth Restatement did Respondent advise Mrs. Cooney to seek out or procure independent legal advice concerning the designation ofeagle Cove Center as a beneficiary in her trust agreement. 18. In six subsequent Restatements and amendments to Mrs. Cooney's trust agreement, SLCC or Eagle Cove Camp was named in Article Third, Section 1, to receive a pecuniary amount of $425,000 after Mrs. Cooney's death. 19. At no time before Mrs. Cooney executed the six subsequent restatements and

8 amendments to her trust agreement did Respondent explain to Mrs. Cooney that he had potential conflict of interest in preparing the trust agreement designating Eagle Cove Center as a beneficiary in her trust agreement to receive $425,000, make a full and frank disclosure of all the relevant information regarding his personal interest in Eagle Cove Center, and obtain consent or waiver from Mrs. Cooney regarding any potential conflict of interest. ANSWER: Admitted that Respondent did not specifically tell Mrs. Cooney that he had a "potential conflict of interest". The remaining allegations of Paragraph 19 are denied. In further answering, Mrs. Cooney was aware ofrespondent's connection to the camp prior to naming the camp as a beneficiary. 20. At no time before Mrs. Cooney executed her six subsequent restatements and amendments to her trust agreement did Respondent advise Mrs. Cooney to seek out or procure independent legal advice concerning the designation ofeagle Cove Center as a beneficiary in her trust agreement. 21. In Mrs. Cooney's last trust agreement, before her death on October 16, 2010, entitled Third Amendment to the Seventh Restatement of the Jean D. Cooney Trust Agreement ("Third Amendment to Seventh Restatement"), which was executed by Mrs. Cooney on January 5, 2010, nine non-profit organizations were named in Article Third, Section I, to receive a share of $470,000 if Mrs. Cooney died before January 1, One of the nine non-profit organizations was Eagle Cove Center, which was designated to receive $425,000 after Mrs. Cooney's death. ANSWER: Denied that the Third Amendment to the Seventh Restatement is accurately referred to as her "last trust agreement" but is instead properly referred to as the last revision of her 1979 trust agreement; the remainder is admitted. 22. At no time before Mrs. Cooney executed her Third Amendment to Seventh Restatement did Respondent explain to Mrs. Cooney that he had a potential conflict of interest in

9 preparing the trust agreement designating Eagle Cove Center as a beneficiary in her trust agreement to receive $425,000. make a full and frank disclosure of all the relevant information regarding his personal interest in Eagle Cove Center, and obtain consent or waiver from Mrs. Cooney regarding any potential conflict ofinterest. ANSWER: Admitted that Respondent did not specifically tell Mrs. Cooney that he had a "potential conflict of interest". The remaining allegations of Paragraph 22 are denied. In further answering, Mrs. Cooney was aware of Respondent's connection to the camp prior to naming the camp as a beneficiary. 23. At no time before Mrs. Cooney executed her Third Amendment to Seventh Restatement did Respondent advise Mrs. Cooney to seek out or procure independent legal advice concerning the designation ofeagle Cove Center as a beneficiary in her trust agreement. 24. On January 29, 2010, Mrs. Cooney resigned as trustee and as a result, Respondent became the trustee ofmrs. Cooney's trust agreement. 25. On October 16, 2010, Mrs. Cooney died. 26. On or about November 6, 2010, Respondent estimated the Cooney Estate to have an estimated value of $3,250, In or around 2012, Respondent, as trustee of Mrs. Cooney's trust agreement, made distributions to the designated beneficiaries, including $425,000 to the Eagle Cove Center. ANSWER: Admitted that such distributions were made during 2011 and Distributions to the six named residuary beneficiaries continue. 28. By reason of the conduct described above that occurred before January 1, 2010,

10 Respondent has engaged in the following misconduct: a. representing a client, Mrs. Cooney, when the representation of that client may be materially limited by his own interests, as the president, co-trustee, and attorney for Eagle Cove Camp and Conference Center, by conduct including failing to obtain consent from the client, failing to disclose or communicate information reasonably sufficient to permit the client to appreciate the significance ofthe matter in question, in violation ofrule 1.7(b) ofthe Illinois Rules ofprofessional Conduct (1990); and b preparing an instrument for his client, Mrs. Cooney, in which Respondent's non profit organization Eagle Cove Camp and Conference Center, was designated as a beneficiary to receive a substantial gift from that client with whom he was not related to, by conduct including but not limited to exerting undue influence or failing to advise the client to obtain independent legal advice, in violation of Rule 1.8(c) ofthe Illinois Rules of Professional Conduct (1990). ANSWER: Respondent neither admits nor denies the allegations of Paragraph 25, subparagraphs a through b, inclusive, as said allegations are not factual but state conclusions of law. To the extent an answer is deemed required, the allegations are denied. 26. By reason of the conduct described above that occurred on or after January 1, 2010, Respondent has engaged in the following misconduct: a. representing a client, Mrs. Cooney, when the representation ofthat client will be materially limited by his own interest, as president, co-trustee, and attorney for Eagle Cove Camp and Conference Center, by conduct including failing to obtain informed consent, in violation ofrule 1.7(a)(2) ofthe Illinois Rules of Professional Conduct (2010); and b. preparing on behalfofa client, Mrs. Cooney, an instrument giving the Respondent's non-profit organization, Eagle Cove camp and Conference Center, a substantial gift, by conduct including exerting undue influence or failing to advise the client to have the detached advice that another lawyer can provide, and where Respondent was not related to or did not maintain a close familial relationship with that client, in violation ofrule 1.8(c) ofthe Illinois Rules ofprofessional Conduct (2010). ANSWER: Respondent neither admits nor denies the allegations of Paragraph 26, subparagraphs a through b, inclusive, as said allegations are not factual but state conclusions of law. To the extent an answer is deemed required, the

11 allegations are denied. WHEREFORE, the Respondent requests that this complaint be dismissed and for all other relief the Hearing Board deems just. Respectfully Submitted, GLOOR LAW GROUP, LLC. Stephanie Stewart-Page GLOOR LAW GROUP, LLC. 225 West Wacker Drive Suite 1800 Chicago, Illinois / / Fax