Nitza I. Blasini appeared on behalf of the Office of Attorney Ethics. To the Honorable Chief Justice and Associate Justices of

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1 SUPREME COURT OF NEW JERSEY Disciplinary Review Board Docket No. DRB District Docket No. IV E IN THE MATTER OF IRWIN B. SELIGSOHN AN ATTORNEY AT LAW Decision Argued: July 16, 2009 Decided: August 25, 2009 Nitza I. Blasini appeared on behalf of the Office of Attorney Ethics. Respondent waived appearance for oral argument. To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey. This matter was before us on a motion for final discipline filed by the Office of Attorney Ethics ("OAE"), based on respondent s conviction of second-degree conspiracy to commit health care claims fraud, third-degree criminal use of runners, and third-degree tax fraud, in violation of RPC 8.4(b) (criminal act that reflects adversely on the attorney s honesty, trustworthiness or fitness as a lawyer), RPC 8.4(c) (conduct

2 involving dishonesty, fraud, deceit or misrepresentation), and RPC 8.4(d) (conduct prejudicial to the administration of justice). The OAE recommended that respondent should be disbarred. We agree. Respondent was admitted to the New Jersey bar in He has no history of discipline. He has been temporarily suspended in New Jersey since August 13, In re Seliqsohn, 192 N.J. 297 (2007). In August 2007, respondent appeared before the Honorable Joseph C. Cassini, III, J.S.C., and entered a guilty plea to three counts of an indictment. Pursuant to a plea agreement, respondent pleaded guilty to the following: second-degree conspiracy to commit health care claim fraud, in violation of N.J.S.A. 2C:5-2; third-degree knowingly using a runner, in violation of N.J.S.A. 2C: and 2C:2-6; and third-degree filing or preparing a false or fraudulent New Jersey tax return, a violation of N.J.S.A. 54:52-10 and 2C:2-6. At the August 2007 proceedings, respondent s counsel elicited the factual basis for respondent s plea: Q. Now, Mr. Seligsohn, during the -- the years -- October 30, 1993 through September 15, 2005, did you, on behalf of Goldberger, Seligsohn Shinrod, represent a large number of

3 Am individuals with respect to personal injury claims arising from automobile accidents?~ A number of these cases, specifically the cases referred to in Counts 5 through 13 of the indictment to which you have entered a -- a plea of guilty to Counts 4, 15 and 16, involved accident claims in which either one of the vehicles, it was claimed, did not stop or a two-car accident with a number of people in each vehicle, all of whom claimed to be injured; is that correct, sir? In retrospect, from reviewing the discovery provided by the State in this case, do you acknowledge that these were, in fact, staged accidents or otherwise never occurred and that the claims you pursued for the clients you represented in connection with these accidents were fraudulent? While you did not specifically know that these claims were fraudulent, do you acknowledge that the facts and circumstances of these cases were such that you should have been much more diligent and aware in accepting and pursuing these cases which led you to pursue what were, in fact, false accident claims in violation of the law? Now, furthermore, Mr. Seligsohn, during the period from July 14, 1999 through December of the Year [sic] 2001, did you make a number of check payments from the Goldberger, Seligsohn & Shinrod operating account to Daymon (phonetic) Brown, Edward Campbell, Jr., Louis Campbell, and Richard Williams? Yes, I did. Charges were also filed against respondent s law firm.

4 Ao Ao On many of these checks there is written in the memo line i-n-v, and these checks were caused to be classified in the records of Goldberger, Seligsohn & Shinrod as investigation expenses; is that correct, sir? And were these items then deducted as business expenses on the New Jersey corporation business tax returns of Goldberger, Shinrod & Seligsohn, a corporation, for the fiscal years ending May 31, 2000 through May 31, 2002? Now, the payments made to these individuals were not for any work done as an investigator or otherwise for Goldberger, Shinrod -- Goldberger, Seligsohn & Shinrod, but were made to compensate them for referring clients to the firm and to you; is that correct? Now, did you know that the payments to these individuals were for referring clients and were not for investigatory services and were not deductible for New Jersey tax purposes because New Jersey law makes it illegal for lawyers and other professionals to pay individuals for bringing them clients? [OAEBEx.D 8-12 to i0-25.] 2 In February 2008, Judge Cassini sentenced respondent to three concurrent terms of three years in prison.3 20AEB refers to the OAE s brief, dated March 27, The court sentenced respondent on the second-degree charge to a term appropriate to a third-degree charge. 4

5 Following a de novo review of the record, we determine to grant the OAE s motion for final discipline. A criminal conviction is conclusive evidence of guilt in a disciplinary proceeding. R. 1:20-13(c)(i). In re Maqid, 139 N.J. 449, 451 (1995). Respondent s guilty plea establishes his violation of RPC 8.4(b), as well as RP ~C 8.4(c) and RP ~C 8.4(d). The level of discipline imposed in disciplinary matters based on the commission of a crime depends on a number of factors, including the "nature and severity of the crime, whether the crime is related to the practice of law, and any mitigating factors such as respondent s reputation, his prior trustworthy conduct, and general good conduct." In re Lunetta, 118 N.J. 443, (1989). Attorneys in New Jersey who have been found guilty of insurance fraud have received a wide range of suspensions. Se ~e, e.~., In re Fisher, 185 N.J. 238 (2005) (one-year suspension in a reciprocal discipline matter from Pennsylvania, where attorney submitted a phony receipt to an insurance company for the purpose of obtaining insurance proceeds for his girlfriend, whose computer had been stolen, and then filed a complaint against the insurance company, based on the same claim; the attorney was convicted of insurance fraud, forgery, and conspiracy; prior three-month suspension considered in aggravation; passage of time, attorney s

6 inexperience at time of violation, and lack of financial motivation considered in mitigation); In re Wiss, 181 N.J. 298 (2004) (in a motion for reciprocal discipline, an attorney who pleaded guilty to the fifth-degree crime of insurance fraud received a six-month suspension; the attorney had directed a member of his staff to falsely notarize a client s signature on forms that were then submitted to an insurance company, made misrepresentations on a court form about the source of the client referral, and failed to supervise his staff, resulting in misrepresentations designed to improperly obtain insurance payments); In re Eskin, 158 N.J. 259 (1999) (in another motion for reciprocal discipline, an attorney received a six-month suspension for forgery and falsely notarizing his client s signature on a notice of claim that was served after the deadline had expired and for serving a second notice of claim misrepresenting the date of the injury to give the appearance that the notice had been timely filed); and In re Berqer, 151 N.J. 476 (1997) (two-year suspension imposed on an attorney who submitted false information to his insurance agent, including an improper jurat, with the intent to defraud the law firm s insurance carrier in connection with a fire loss). In a series of related cases, three attorneys pled guilty to mail fraud arising from a scheme to defraud insurance companies. 6

7 In In re Sloane, 147 N.J. 279 (1997),.!n re Takacs, 147 N.J. 277 (1997), and In re Kerriqan, 146 N.J. 557 (1996), the attorneys submitted false claims to insurance companies, alleging that either they or their clients had sustained personal injury. Sloane pleaded guilty to one count of mail fraud and received a two-year suspension; Takacs was suspended for three years, after pleading guilty to two counts of mail fraud; and Kerrigan was suspended for eighteen months because, at the time of his misconduct, he was not yet an attorney and because he promptly notified and cooperated with disciplinary authorities. Respondent s misconduct is most akin to that of the attorneys in the mail fraud cases, where fraudulent personal injury claims were pursued. The record does not reveal in how many instances respondent participated in this scheme that led to his guilty plea. The attorney in Sloane pled guilty to one count of mail fraud and received a two-year suspension. We liken respondent s misconduct to that of Sloane and find a two-year suspension appropriate for this aspect of respondent s misconduct. Respondent also pled guilty to one count of tax fraud. A violation of federal tax law is a serious ethics breach. In re 0ueenan, 61 N.J. 579, 580 (1972). "[D]erelections of this kind by members of the bar cannot be overlooked. A lawyer s training 7

8 obliges him [or her] to be acutely sensitive of the need to fulfill his [or her] personal obligations under the federal income tax law." In re Gurnik, 45 N.J. 115, (1965) (twoyear suspension for plea of nolo contendere to willfully and knowingly attempting to evade and defeat a part of the income tax due and owing by attorney and his wife). "[N]o matter what the excuse... a period of suspension is required in all such cases." In re Spitzer, 63 N.J. 532, 533 (1973). Although the level of discipline imposed for~ federal tax law violation depends on the underlying circumstances of the matter, in recent years, when an attorney has been guilty of tax evasion, a two-year suspension has been deemed the standard measure of discipline, even where the attorney has not been previously disciplined. See, e.~., In re Mischel, 166 N.J. 219 (2001) (two-year suspension for an attorney with a prior unblemished history, who pleaded guilty in the Supreme Court of the State of New York to a charge of offering a false instrument for filing; the false instrument was a New York State tax return that she knew contained false and fraudulent deductions); In re Rakov, 155 N.J. 593 (1998) (two-year suspension for an attorney with an unblemished disciplinary record, convicted of five counts of attempted income tax evasion; attorney failed to 8

9 report the interest paid to him on personal loans on his federal income tax returns); In re Batalla, 142 N.J. 616 (1995) (attorney suspended for two years for evading $39,066 in taxes by underreporting his earned income in 1990 and 1991; prior unblemished record); and In re Nedick, 122 N.J. 96 (1991) (twoyear suspension for failing to report $7,500 in cash legal fees in his taxable income; unblemished record and additional mitigating factors considered). See also In re Tuman, 74 N.J. 143 (1977)(filing a false and fraudulent joint tax return merited a two-year suspension from the practice of law); In re Becket, 69 N.J. 118 (1976) (a plea of guilty to the filing of false and fraudulent tax returns warranted suspension from practice of law for two years); and In re Gurnik, supra, 45 N.J. 115 (attorney suspended for a period of two years after he pleaded nolo contendere to a charge of tax evasion for one calendar year). But see In re D Andrea, 186 N.J. 586 (2006) (in a reciprocal discipline matter from Pennsylvania, the attorney pled guilty to filing a false federal tax return; eighteen-month suspension imposed in light of mitigating factors) and In re Kirnan, 181 N.J. 337 (2004) (attorney pled guilty to filing a false federal tax return; eighteen-month suspension imposed in view of special circumstances, including his cooperation with a criminal investigation).

10 In the present matter, respondent s misconduct was an intentional act through which his law firm employed deception to defeat the tax laws. The individuals employed by the firm as runners were labeled investigators so that their payments could be deducted on the firm s corporate tax returns. Respondent s conduct warrants discipline as serious as the two-year suspensions imposed in tax evasion cases. The appropriate measure of discipline in a runner case, determined on a case-by-case basis, ranges from a three-month suspension to disbarment. See, e.~., In re Gross, 186 N.J. 157 (2006) (three-month suspended suspension imposed for the attorney s use of a paid runner; the attorney stipulated that he paid $300 to a runner on at least fifty occasions between 1998 and 2000); In re Pease, 167 N.J. 597 (2001) (three-month suspension imposed on attorney who paid a runner for referring fifteen prospective clients to him and for loaning funds to one of those clients; in mitigation, the attorney had not been disciplined previously, had performed a significant amount of community service, and the misconduct was limited to a fourmonth period, which took place more than ten years prior to the ethics proceeding, when the attorney was relatively young and inexperienced); In re Breqq, 61 N.J. 476 (1972) (attorney i0

11 suspended for three months for paying part of his fees to a runner from whom he had accepted referrals in thirty cases; mitigating factors included the attorney s candor and contrition); In re Gross, 190 N.J. 194 (2007) (attorney received a four-month suspended suspension for his participation in his son s running scheme by issuing payments to a runner); In re Chilewich, 192 N.J. 221 (2007) and In re Sorkin, 192 N.J. 76 (2007) (one-year suspensions imposed in companion cases in which both attorneys admitted having runners refer to them twenty and fifty cases, respectively, and filed false retainer reports with the Office of Court Administration; considerable time had passed between the misconduct and the disciplinary proceedings); In re Berqlas, 190 N.J. 357 (2007) (on a motion for reciprocal discipline, attorney received a one-year suspension for sharing legal fees with a nonlawyer and improperly paying third parties for referring legal cases to him; the conduct took place over three years and involved two hundred immigration and personal injury matters); In re Birman, 185 N.J. 342 (2005) (attorney received a one-year suspension by way of reciprocal discipline; he had agreed to compensate an existing employee for bringing new cases into the office, after she offered to solicit clients for him); In re Berqer, 185 N.J. 269 (2005) (one-year suspension ii

12 imposed on an attorney who received a three-year suspension in New York for paying two runners nearly $42,000 between January 1995 and December 1996 and for filing about 350 false retainer statements between January 1995 and August 1996; although the New York court determined that the attorney had filed 350 inaccurate, incomplete and/or misleading statements, the record did not reveal the number of cases in which Berger used misleading information to conceal his use of a runner); In re Frankel, 20 N.J. 588 (1956) (two-year suspension imposed on attorney who paid a runner twenty-five percent of his net fee to solicit personal injury clients); In re Introcaso, 26 N.J. 353 (1958) (three-year suspension for attorney who used a runner to solicit clients in three criminal cases, improperly divided legal fees, and lacked candor in his testimony); In re Pajerowski, 156 N.J. 509 (1998) (disbarment for attorney who for almost four years used a runner to solicit personal injury clients, split fees with the runner, and compensated him for referrals in eight matters involving eleven clients; although the attorney claimed that the runner was his "office manager," in 1994 the attorney had compensated him at the rate of $3500 per week ($182,000 a year) for the referrals); and In re Shaw, 88 N.J. 433 (1982), (disbarment for attorney who used a runner 12

13 to solicit a client in a personal injury matter, "purchased" the client s cause of action for $30,000, and then settled the claim for $97,500; the runner forged the client s endorsement on the settlement check, depositing it in his own bank account, rather than the attorney s trust account; the attorney also represented a passenger in a lawsuit against the driver of the same automobile and represented both the passenger and the driver in litigation filed against another driver). Here, we have no details about the number of times that respondent paid an individual for referring clients to him or to his firm. We know that the misconduct lasted over two years. An attorney who was guilty of misconduct that combined two of respondent s three criminal violations (insurance fraud and tax fraud) was disbarred. In In re Struhl, 189 N.J. 524 (2007), the attorney pled guilty in the Superior Court of California to two counts of a felony complaint, which charged him with solicitation, acceptance or referral of fraudulent insurance claims, and willfully making or signing false tax returns. Struhl allowed his name and license to practice law to be used as a "shill" for operations conducted by non-attorneys. Arguably, Strulh s conduct was more troubling than respondent s. That is not to say, however, that the two do not 13

14 warrant the same measure of discipline. Respondent s participation in pursing personal injury claims following staged accidents to collect insurance proceeds, his filing of fraudulent corporate tax returns, and his use of runners constituted conduct that cannot be tolerated in the legal profession. His actions showed an all-embracing lack of moral character. This is not the situation where a long-time member of the bar abandons or neglects his practice due to alcoholism or drug abuse or mental illness. This attorney has exhibited an utter disregard for the obligations placed on members of the bar. That he had a previously unblemished career of forty-six years at the bar is not enough to mitigate his misconduct. We recommend that he be disbarred. Member Yamner recused himself. We further determine to require respondent to reimburse the Disciplinary Oversight Committee for administrative costs and actual expenses incurred in the prosecution of this matter, as provided in R ~. 1: Disciplinary Review Board Louis Pashman, Chair 14 By: ~~ ~ef Counsel

15 SUPREME COURT DISCIPLINARY VOTING OF NEW JERSEY REVIEW BOARD RECORD In the Matter of IRWIN B. SELIGSOHN Docket No. DRB Argued: July 16, 2009 Decided: August 25, 2009 Disposition: Disbar Members Disbar Suspension Reprimand Dismiss Disqualified Did not participate Pashman Frost Baugh Clark Doremus Stanton Wissinger Yamner Zmirich Total: 9