Case Title: In re Twohey

Citation: 

Docket Number: 87565

State: illinois

Court: Illinois Supreme Court

Date: 2000-03-23T00:00:00Z

Document:
Opinion filed March 23, 2000.
JUSTICE BILANDIC delivered the opinion of the court:
The Administrator of the Attorney Registration and Disciplinary Commission 
(Administrator) filed a complaint with the Hearing Board charging respondent, 
William Nelson Twohey, with various instances of misconduct evolving from his 
advising a client to loan funds to Fox River Minerals, Inc., a corporation that 
respondent represented in his capacity as an attorney. The Hearing Board found 
that respondent had violated numerous provisions of the Illinois Rules of 
Professional Conduct (134 Ill. 2d R. 1.1 et seq.). The Hearing Board 
recommended that respondent be suspended from the practice of law for one year, 
but that respondent should not be ordered to pay restitution to his client. The 
Review Board adopted the factual findings of the Hearing Board, agreed that 
restitution was not proper in this case, but reduced the recommended suspension 
to a period of six months. This court granted respondent's petition for leave to 
file exceptions. See 166 Ill. 2d R. 753(e). Respondent challenges only the 
recommended sanction of six months' suspension.
For the reasons that follow, we approve the recommendation of the Review 
Board, and we approve in part and reject in part the recommendation of the 
Hearing Board. Respondent is suspended from the practice of law for six 
months.
BACKGROUND
I. The Evidence
Respondent is 60 years old and was admitted to the practice of law in 
Illinois in 1967. Respondent has been a resident of Ottawa, Illinois, for most 
of his life. Respondent is a sole practitioner with a general practice in 
Ottawa. Respondent has no prior disciplinary complaints against him.
A. Respondent's Relationship with Fox River Minerals, 
Inc.
Fox River Minerals, Inc. (FRM), was a sand processing company located in 
Seneca, Illinois. FRM was incorporated and began operations in 1991. According 
to the record, the sand processing business involves significant start-up costs 
and large operating expenses. There is no revenue until sand sales begin. FRM 
was significantly undercapitalized and had substantial debt and ongoing 
cash-flow problems.
In June 1992, respondent became legal counsel for FRM. In early September 
1992, respondent became the sole signatory on a bank account referred to as 
FRM's "special account," into which all receipts were deposited. Respondent 
wrote checks from the special account to creditors and transferred money into a 
payroll account as needed. Respondent worked an average of 15 to 20 hours per 
week for FRM. From approximately October 1992 through August 1993, FRM paid 
respondent $500 per week for his work.
As of September 3, 1992, FRM owed creditors approximately $400,000. This 
figure included two liens totaling $83,000 that were not reflected on FRM's 
accounts payable statements. On July 22, 1992, the Internal Revenue Service 
filed a $14,000 tax lien against FRM. Respondent testified that he was not aware 
of this lien until approximately October 1992. William Peabody, the accountant 
for FRM, testified that the tax lien was sent to the FRM post office box. 
Peabody testified that he was aware of the lien immediately, but that he did not 
recall discussing the matter with respondent, and that he did not recall 
forwarding a copy of the tax lien to respondent.
Also on July 22, 1992, Serena Construction Company (Serena) filed a 
mechanic's lien against FRM in the amount of $69,000. Respondent testified that 
he was not aware in August 1992 of the actual filing of the mechanic's lien. 
William Peabody testified that he too was not aware at this time that Serena had 
filed a mechanic's lien. Respondent testified, however, that he was aware of a 
claim by Serena against FRM, but that the parties disputed the amount owed. 
Respondent was also aware in late September 1992 that Serena had actually filed 
a lawsuit against FRM.
On July 23, 1992, respondent accompanied David Remy, FRM's chief executive 
officer and principal stock holder, to a meeting where Remy signed a "promissory 
note" in the amount of $120,000 payable to Joseph Thoesen. This note provided 
that it was secured by an assignment of all of Remy's stock in FRM. Thoesen 
testified that this was a "personal loan" by him to Remy as a "capital infusion" 
into FRM. Respondent testified that he was present when Remy signed the note. 
Respondent believed that Thoesen had made a capital investment of $120,000 in 
FRM and was not in the position of a lender or creditor. Respondent therefore 
advised Remy not to sign the note. Respondent was informed that, even though 
Thoesen was an investor in FRM, and not a creditor, "[t]his was their way of 
accounting, of keeping track, and that this was a receipt system." David Remy 
died in June 1994, and therefore did not testify at the hearing in this 
case.
B. Respondent's Relationship with Nancy Weck
Respondent represented Nancy Weck and her husband, Peter Weck, in various 
legal matters for several years. Peter Weck died in August 1991. Nancy Weck was 
left with assets including a commercial rental property in Ottawa and 
approximately $140,000. Respondent continued to represent Nancy Weck. In 1992, 
respondent represented Weck in a lawsuit in which Weck sought damages against an 
oil company for environmental contamination of the commercial rental property. 
Respondent also reviewed lease agreements for this property, and he prepared a 
will for Weck.
C. Financial Transactions Involving Respondent, FRM, and 
Nancy Weck
The disciplinary charges against respondent center on three monetary 
transactions involving respondent, FRM, and Weck, which occurred on August 5, 
1992, a day in late September 1992, and October 23, 1992.
Transaction of August 5, 1992
On August 5, 1992, Weck went to respondent's office to discuss her legal 
matters. Weck and respondent discussed Weck's finances. Weck had approximately 
$142,000 in liquid assets. She had deposited this money in a bank account. 
Respondent suggested that Weck invest money in FRM so that she would receive a 
better rate of return. Respondent told Weck about FRM's favorable earnings 
projections. FRM was located near prospective sand buyers, and there were 
estimates of significant sand reserves on FRM's site. Respondent told Weck that 
his wife was planning to invest in FRM. Respondent's wife did in fact later 
invest approximately $16,000 in FRM. Although respondent did not inform Weck of 
FRM's debts, Weck was advised that the company was in the start-up phase, had 
significant start-up expenses, and needed a loan to meet operating expenses.
Weck loaned FRM $15,000. David Remy signed a promissory note, which was 
prepared by respondent, stating that the note was due on October 1, 1992, and 
would bear interest of $2,500 for the period of the loan. As collateral for the 
loan, Remy executed a document that purported to assign to Weck 10% of Remy's 
unencumbered stock in FRM. This assignment recited that Remy owned 100% of the 
stock in FRM. It also stated that Remy had previously pledged or transferred 45% 
of the stock and owned 55% of the stock unencumbered.
Respondent did not advise Weck that Remy had no unencumbered stock because of 
the earlier assignment of all of his shares to Joseph Thoesen as collateral for 
the $120,000 "promissory note." Respondent testified that, although he knew of 
Remy's assignment of his shares to Thoesen, respondent thought that other 
unencumbered shares were available.
Transaction of September 1992
Weck met with respondent in late September 1992 and wrote a check to FRM for 
$5,000. At this point, Weck converted her position, for the full $20,000 that 
she had advanced, from a loan to an equity investment. Pursuant to this 
arrangement, Weck was to receive 5% of the outstanding stock in FRM. The only 
stock outstanding, however, was the 1,000 shares originally owned by Remy. 
Respondent did not advise Weck that Remy had pledged all of his shares as 
collateral to Thoesen.
Respondent deposited Weck's $5,000 check into FRM's special account. This 
money was used to cover payroll expenses, including respondent's retainer. Weck 
knew that FRM needed funds to cover payroll, but respondent did not tell Weck 
that some of her funds would be used to pay his fees.
Conflicting testimony was presented as to whether Weck first discussed the 
additional $5,000 with Remy, or whether respondent approached Weck about the 
additional loan. Weck testified that she was concerned about advancing 
additional funds, but that respondent assured her that she would soon be 
receiving a large amount of money from the environmental contamination lawsuit 
in which respondent was representing Weck. Respondent also told Weck that if she 
did not loan the additional $5,000 to FRM, she would lose the money that she had 
already loaned to the company. Weck further testified that respondent suggested 
that she convert her position to an equity investor, rather than a creditor, as 
that would be the most effective way to obtain the highest return, given FRM's 
projected sales. Weck never received any stock certificates or documentation 
reflecting her stock ownership.
Weck later told her boyfriend, now her husband, George Weems, that she had 
loaned money to FRM. Weems was a close friend of respondent. Weems was familiar 
with FRM and its financial condition, and advised Weck not to invest any further 
in the company.
Transaction of October 23, 1992
In mid October 1992, FRM was financially unstable. Several payroll checks had 
been returned for insufficient funds. On October 23, 1992, Weck went to Leland 
National Bank and met with respondent and bank president Robert Higgerson. Weck 
obtained a $20,000 loan and invested that money in FRM. Conflicting testimony 
was presented about the circumstances surrounding the making of this loan.
Weck testified that in October 1992, she met with Remy and he told her that 
FRM still needed funds. Weck informed him that she could not afford to invest 
any more money. At this time, respondent became "very pushy" in regard to Weck 
providing more money to FRM. Respondent would call Weck frequently and leave 
messages regarding the need to speak with Weck about FRM's need for more money. 
Carole Gulo, a friend and neighbor of Weck, testified that she heard several 
messages on Weck's machine from respondent. These messages referred generally to 
respondent's need to discuss a money situation with Weck.
Weck further testified that on October 22, 1992, respondent called Weck and, 
during their conversation, respondent "demanded" that she meet him at Leland 
National Bank the next morning. Respondent informed Weck that he had discussed a 
loan with Higgerson, the bank president, and arrangements were made for the loan 
to be signed at 10 a.m. Weck agreed to go to the bank because she "didn't know 
what else to do." Weck, respondent, and Higgerson met at the bank the next day. 
Higgerson testified that he advised Weck that it would be an unsound investment 
to give FRM more money. Nevertheless, Weck borrowed $20,000 from the bank to 
invest in FRM. This decision was made after Weck and respondent conferred in 
private for several minutes. Higgerson testified that this private conference 
was a mutual idea between respondent and Weck. Higgerson did not hear raised 
voices while respondent and Weck conferred privately in a room adjoining 
Higgerson's office, and Weck did not appear upset after this conference.
Respondent testified that, during their private conference, Weck told him 
that she was concerned because she appeared to be the only investor in FRM. 
Respondent told Weck that he was not able to invest in FRM because he was facing 
possible bankruptcy due to substantial medical bills he had incurred. Respondent 
proposed that, if Weck lost money, he would indemnify Weck out of any contingent 
fee he received in the environmental contamination suit in which he was 
representing Weck. On November 11, 1992, respondent wrote a letter to Weck 
memorializing this commitment.
In contrast, Weck testified that, during their private conference, respondent 
told her that she would lose her prior investment if she did not advance the 
$20,000. Weck acknowledged that respondent told her about FRM's financial 
condition, and that he offered to personally guarantee Weck's loan. Weck also 
testified that respondent threatened to reveal her relationship with George 
Weems, Weck's boyfriend and now husband, who was married to someone else at the 
time. Respondent denied making such a threat.
David Remy executed a promissory note and another stock assignment to Weck as 
collateral for the October 23 loan. Respondent drafted these documents and 
presented them to Weck. The assignment stated that Remy owned 100% of the shares 
of FRM, 54% of those shares had been previously pledged or sold, and Remy 
retained 46% of the shares unencumbered, of which he assigned 5% to Weck as 
collateral for this loan. Respondent did not tell Weck that all of Remy's stock 
was already pledged as collateral to Joseph Thoesen, and respondent did not tell 
Weck of the debt owed to Thoesen.
FRM filed for bankruptcy in 1993, and Weck lost her $40,000 investment. Weck 
was paid some interest due on her loan from Leland National Bank. Weck herself, 
however, repaid the principal of this bank loan. Weck filed a civil lawsuit 
against respondent. That suit was pending at the time of the hearing in this 
case.
Respondent testified at the hearing that, when he advised Weck to invest in 
FRM, he did not perceive a conflict of interest. Attorney Anthony Raccuglia 
testified as a character witness for respondent. Raccuglia has known respondent 
for 30 years. He testified that respondent has a reputation for being an ethical 
and skilled attorney. Edward Whitney, a former Ottawa police chief, a member of 
the Ottawa city council, and the commissioner of public health and safety, 
testified that he has known respondent for 45 years and that respondent is well 
respected and has a reputation for being honest.
II. The Hearing Board and Review Board
The Hearing Board found that the Administrator proved by clear and convincing 
evidence that respondent (1) breached his fiduciary duty; (2) represented a 
client when the representation was materially limited by respondent's 
responsibilities to another client, or by respondent's own interests, without 
full disclosure and the client's consent, in violation of Rule 1.7(b) of the 
Illinois Rules of Professional Conduct (134 Ill. 2d R. 1.7(b)); (3) represented 
multiple clients in a single matter without an explanation to each client of the 
risks involved, in violation of Rule 1.7(c) (134 Ill. 2d R. 1.7(c)); (4) entered 
into a business transaction with a client without full disclosure, in violation 
of Rule 1.8(a) (134 Ill. 2d R. 1.8(a)); (5) made a statement of material fact or 
law that respondent reasonably should have known was false, in violation of Rule 
4.1(a) (134 Ill. 2d R. 4.1(a)); and (6) engaged in conduct that tends to defeat 
the administration of justice or to bring the courts or the legal profession 
into disrepute, in violation of Supreme Court Rule 771 (134 Ill. 2d R. 771). The 
Hearing Board found, however, that the Administrator failed to prove by clear 
and convincing evidence that respondent engaged in conduct that involves 
dishonesty, fraud, deceit, or misrepresentation, in violation of Rule 8.4(a)(4) 
of the Illinois Rules of Professional Conduct (134 Ill. 2d R. 8.4(a)(4)).
The Hearing Board recommended that respondent be suspended from the practice 
of law for one year. The Hearing Board rejected the Administrator's request that 
respondent be ordered to pay restitution to his client.
Respondent filed exceptions before the Review Board. Respondent did not 
dispute the Hearing Board's findings but argued that the one-year suspension is 
excessive. The Review Board affirmed the findings of misconduct yet recommended 
a six-month suspension from the practice of law. The Review Board agreed with 
the Hearing Board that restitution is not proper under the facts of this 
case.
ANALYSIS
Neither party challenges the Hearing Board's factual findings. The sole issue 
in this case is the appropriate sanction to impose upon respondent. Respondent 
argues that he should receive either a sanction of censure or a sanction of less 
than six months' suspension. The Administrator argues that respondent's 
misconduct and the aggravating factors warrant a suspension of his law license 
for one year, and that respondent should be ordered to pay restitution to his 
client.
In determining the appropriate sanction, the recommendations of the Hearing 
and Review Boards are advisory. The ultimate responsibility for imposing 
discipline rests with this court. In re Chandler, 161 Ill. 2d 459, 
472-73 (1994); In re Demuth, 126 Ill. 2d 1, 13 (1988). A sanction 
imposed upon an attorney should be generally consistent with sanctions imposed 
upon other attorneys for similar misconduct. In re Smith, 168 Ill. 2d 269, 296 (1995); In re Goldstein, 103 Ill. 2d 123, 131 (1984). 
Nonetheless, each case presents a unique factual situation and must be evaluated 
based upon its own merits. Smith, 168 Ill. 2d  at 296; 
Goldstein, 103 Ill. 2d  at 131-32.
In any disciplinary proceeding, this court's goal is not to punish the 
attorney. Rather, the goals are to protect the public from incompetent or 
unscrupulous attorneys, maintain the integrity of the profession, and protect 
the administration of justice from reproach. Smith, 168 Ill. 2d  at 295; 
Demuth, 126 Ill. 2d  at 13. In this regard, it is important to recognize 
the deterrent value of a sanction and the need to impress upon others the 
seriousness of the misconduct at issue. In re Discipio, 163 Ill. 2d 515, 528 (1994); In re Imming, 131 Ill. 2d 239, 261 (1989). We consider 
these principles in determining the proper sanction to impose upon 
respondent.
We find the following cases instructive and relative to our determination of 
the proper sanction: In re Imming, 131 Ill. 2d 239 (1989); In re 
Demuth, 126 Ill. 2d 1 (1988); In re Rosin, 118 Ill. 2d 365 (1987); 
and In re Goldstein, 103 Ill. 2d 123 (1984).
In In re Imming, 131 Ill. 2d 239 (1989), the respondent attorney 
induced eight clients to loan substantial amounts of money to a financially 
distressed plastics manufacturing company, of which Imming was the president and 
sole shareholder. Imming never disclosed the financial problems of the company 
to the clients and took affirmative steps to falsify the company's financial 
condition. Imming also failed to advise these clients to seek independent legal 
advice before completing the transactions. The company issued unsecured 
promissory notes to these clients, and Imming personally guaranteed the 
repayment of the loans. The company never earned a profit, and Imming ultimately 
filed for bankruptcy. In determining the appropriate sanction, this court noted 
that Imming had been an attorney for 26 years and had no prior disciplinary 
record. We nevertheless stated that Imming's misconduct was serious and that 
Imming did not recognize the importance of his ethical obligations. This court 
ordered that Imming be suspended from the practice of law for two years. 
Imming, 131 Ill. 2d  at 242-50, 260-61.
Likewise, in In re Demuth, 126 Ill. 2d 1 (1988), the respondent 
attorney represented both a lender and a borrower in a transaction involving a 
loan of $18,000. Demuth deposited the lender's check in an escrow account and 
retained $2,000 from the loan as a "finder's fee." At one point before the 
borrower received the remaining $16,000, Demuth's escrow account had a balance 
of 11 cents. Demuth also told the lender that he would file the documents 
necessary to perfect the lender's security interest, yet failed to do so. The 
loan was never repaid to the lender. In an unrelated transaction, Demuth himself 
borrowed $11,600 from the same client/lender involved in the $18,000 
transaction. Demuth failed to advise the client to obtain independent legal 
advice. Demuth defaulted on the $11,600 loan, and the client sued Demuth to 
collect on the loan. This court determined that the appropriate sanction was 
suspension from the practice of law for one year. We recognized that Demuth had 
an otherwise unblemished record in his 11-year career, that the misconduct at 
issue had occurred eight years earlier, and that Demuth had ultimately made 
restitution to his client. Furthermore, a character witness had testified that 
Demuth was active in community affairs and various youth groups. Nevertheless, 
this court held that a one-year suspension was the appropriate sanction, as 
Demuth's misconduct was serious and it appeared that Demuth "still [did] not 
fully understand his ethical obligations." Demuth, 126 Ill. 2d  at 5-8, 
14-15.
Similarly, in In re Rosin, 118 Ill. 2d 365 (1987), the respondent 
attorney represented a medically and financially unstable client in a personal 
injury action that the parties ultimately settled. Rosin later drafted, without 
advance authorization from the client, an investment agreement pursuant to which 
the client loaned $100,000 of the proceeds from the settlement to a company that 
sold collectors' stamps. Robert McAuliffe, then a judge in the circuit court of 
Cook County, managed and directed the operation of this company. Rosin tried 
several cases before McAuliffe and also had a close personal relationship with 
him. Rosin failed to investigate the company to insure that the client's 
investment was sound, and failed to draft adequate security provisions in the 
investment agreement. Rosin himself also loaned a significant sum of money to 
the company without first communicating this information to his client. This 
court noted that, although Rosin did not intentionally defraud his client, and 
had no prior history of disciplinary action, he had put his client at 
considerable pecuniary risk. This court suspended Rosin from the practice of law 
for two years and until further order of the court, or, if he paid the client 
the monies lost by her as a result of his misconduct, plus interest, within 60 
days, then his suspension would terminate at the end of two years. 
Rosin, 118 Ill. 2d  at 368-78, 382, 388-89.
Finally, in In re Goldstein, 103 Ill. 2d 123 (1984), the respondent 
attorney borrowed funds totaling $86,000 from four clients over a period of two 
years. Goldstein used this money to invest in two financially distressed 
companies with which he was involved. Goldstein did not disclose to his clients 
the use to which the borrowed funds would be put, and failed to advise his 
clients to seek independent legal counsel. Goldstein gave each client a 
promissory note. In one case, Goldstein falsely represented the degree of 
security he was giving for the loan. In all four cases, Goldstein defaulted on 
the payments of the principal of the loans and had not made full restitution to 
his clients. This court suspended Goldstein from the practice of law for one 
year and until further order of the court, conditioned upon payment of 
restitution. We noted that Goldstein intended to repay the money he borrowed 
from his clients, and that he had no prior disciplinary record. We stated, 
however, that Goldstein failed to deal with his clients in a professional 
manner, caused them to be deprived of their money, and caused them to incur 
expense in seeking to recover the money. Goldstein, 103 Ill. 2d  at 
125-29, 132-33.
We consider the aforementioned case law, as well as the particular mitigating 
and aggravating factors in this case, in determining the appropriate sanction to 
impose upon respondent. Here, respondent's misconduct was serious but did not 
involve fraud or deliberate misrepresentations. It is undisputed that respondent 
had an attorney-client relationship with both Weck and FRM during August, 
September and October of 1992. At this time, respondent was preparing a will for 
Weck, assisting her with rental documents pertaining to her commercial building, 
and had agreed to represent her in the environmental contamination suit. Also at 
this time, FRM was paying respondent to handle the company's financial matters, 
which included dealing with FRM's many creditors.
Because respondent had an attorney-client relationship with Weck and FRM, he 
also had a fiduciary relationship with both of them. See Imming, 131 Ill. 2d  at 252-53. At the same time that respondent represented both Weck and 
FRM, however, Weck, pursuant to respondent's advice and assistance, loaned 
$40,000 to FRM and became one of FRM's creditors. On three separate occasions, 
respondent advised Weck to invest money in FRM. At no time did respondent inform 
Weck of his conflict of interest or advise Weck to seek independent counsel or 
advice. Respondent's failure to recognize such a clear conflict of interest in 
his representation of both a lender and a borrower reveals a lack of 
understanding of his ethical obligations as an attorney. See Demuth, 
126 Ill. 2d  at 13.
Nevertheless, the circumstances of this case differ from those in the cited 
cases. Imming, Demuth, Rosin, and Goldstein 
involve more serious misconduct and greater aggravating circumstances than are 
present here. The Hearing Board found that the Administrator failed to prove 
that respondent engaged in fraud or misrepresentation. The parties do not 
dispute this finding. Respondent thought that FRM was a good investment and that 
it would produce a profit once it endured the start-up phase. Indeed, respondent 
agreed that if Weck lost money, he would indemnify Weck out of any contingent 
fee he received in the environmental contamination suit in which he was 
representing her.
Furthermore, respondent himself did not borrow money from Weck. Rather, he 
told Weck about a potential investment in a start-up company. Respondent told 
Weck that her money would be invested in FRM, and her money was in fact invested 
in and used by FRM. Although respondent received financial compensation from 
FRM, he did substantial legal work on its behalf, and he did not receive any 
additional compensation as a result of the transactions with Weck.
We also recognize the importance of certain mitigating factors present in 
this case. Respondent has been practicing law for over 30 years and has no prior 
disciplinary complaints against him. Respondent has been cooperative throughout 
the entire disciplinary process, and evidence at the hearing revealed that 
respondent has a reputation for honesty and integrity with certain members of 
his community.
In light of respondent's misconduct, and the mitigating evidence presented in 
this case, a six-month suspension from the practice of law is the appropriate 
sanction. In rendering this sanction, we stress the importance of an attorney's 
fiduciary duty to his or her client and the requirement of full disclosure in a 
business transaction with a client.
Justice Rathje's dissenting opinion concludes that respondent should be 
suspended for two years and until further order of the court, and that 
respondent should be ordered to pay restitution. His dissent reasons that the 
aforementioned case law dictates this result. It states that, like respondent's 
case, there were no findings of fraud or misrepresentation in Imming, 
Rosin, or Demuth, and like respondent's case, the attorneys in 
Imming, Rosin, Demuth, and Goldstein had no 
prior history of disciplinary action. The dissent then criticizes our suspension 
of respondent for six months because this suspension is shorter than the one- 
and two-year suspensions imposed in the referenced cases.
We, of course, agree that there are similarities between the facts of 
respondent's case and the facts of Imming, Rosin, 
Demuth, and Goldstein. This is why we discuss these cases as a 
starting point in determining the appropriate sanction for respondent. There 
are, however, important differences between the facts of respondent's case and 
the facts of the aforementioned cases, which make a lesser sanction appropriate 
here.
Respondent advised Weck to invest $40,000 in FRM, a company in which 
respondent was not a shareholder. Imming, on the other hand, induced eight 
clients, on numerous occasions over a four-year period, to invest a total of 
$389,000 in a company in which Imming was the president and sole shareholder. 
Imming, 131 Ill. 2d  at 242-50. In Rosin, the Administrator 
cited in aggravation uncharged conduct that came to light during the course of 
the investigation, i.e., that Rosin did not follow the rules governing 
the payment of fees to a lawyer who refers a case to another lawyer, and that 
Rosin loaned $60,000 to a company controlled by a judge before whom Rosin 
practiced. Rosin, 118 Ill. 2d  at 388. No such aggravating evidence 
appears in respondent's case. In Demuth, this court affirmed the 
Hearing Board's finding that Demuth converted client funds. Demuth, 126 Ill. 2d  at 11-12. No such charge was brought against respondent in this case. 
Finally, as Justice Rathje's dissent recognizes, unlike respondent's case, the 
Goldstein case involved a finding of misrepresentation. See 
Goldstein, 103 Ill. 2d  at 130.
Because respondent's case involves fewer aggravating circumstances than the 
foregoing cases, a suspension shorter than one or two years is the appropriate 
sanction. Furthermore, as we have previously stated, each attorney disciplinary 
proceeding presents unique facts, and we must therefore carefully evaluate each 
case on its own merits. See Smith, 168 Ill. 2d  at 296; 
Goldstein, 103 Ill. 2d  at 131-32. In this case, after a thorough review 
of all of the relevant circumstances, we determine that respondent should be 
suspended from the practice of law for six months.
As a final matter, we hold that restitution is not appropriate under the 
facts of this case. Respondent did not commit fraud or make deliberate 
misrepresentations. Rather, respondent believed that FRM would ultimately be 
successful and was thus a good investment. Respondent did provide Weck with some 
negative information about FRM, including the fact that it was a start-up 
company and had problems meeting its payroll. Additionally, the Hearing Board 
found that Weck had more business acumen than she claimed, and was generally 
aware of the risks involved in investing in FRM.
Justice Rathje's dissent contends that respondent should be required to pay 
restitution to Weck. In support, the dissent cites In re Fleischman, 
135 Ill. 2d 488 (1990), and In re Alexander, 128 Ill. 2d 524 (1989). In 
those cases, the attorneys had been disbarred for bribing employees of the Cook 
County board of tax appeals, and were seeking reinstatement to the practice of 
law. Fleischman, 135 Ill. 2d at 490-95; Alexander, 128 Ill. 2d  
at 527-33. This court found that, because of the financial benefits to the 
attorneys, and the loss of tax revenue and integrity to the county, the 
attorneys would be required to pay restitution to Cook County in order to be 
reinstated to the practice of law. Fleischman, 135 Ill. 2d  at 497-99 
(granting reinstatement upon condition of restitution); Alexander, 128 Ill. 2d  at 536-39 (denying reinstatement but discussing restitution issue).
We reiterate that each attorney disciplinary case is unique, and we must 
evaluate all of the relevant circumstances. Here, the Hearing Board found that 
Weck was not a credible witness, and that many of the circumstances in this case 
contradicted her testimony. The Hearing Board found that Weck was generally 
aware of the risks involved in investing in FRM. The Hearing Board found that 
respondent did not engage in any fraud or misrepresentation, and that respondent 
believed that FRM was a good investment. The parties do not challenge the 
Hearing Board's findings. Restitution is not an appropriate sanction under these 
circumstances.
For the foregoing reasons, we approve the recommendation of the Review Board, 
and we approve in part and reject in part the recommendation of the Hearing 
Board. Respondent is therefore suspended from the practice of law for a period 
of six months.
Respondent suspended.
JUSTICE MILLER, dissenting:
I disagree with the majority's disposition of the present case. In my view, 
the respondent's misconduct warrants a suspension of at least one year. In 
addition, I believe that the respondent should be ordered to pay restitution to 
the injured client.
The respondent does not contest the findings of misconduct made below. The 
Hearing Board found that the respondent breached his fiduciary duty to Nancy 
Weck, his client; that he represented her when the representation was materially 
limited by his responsibilities to another client or to a third person, or by 
his own interests, without making full disclosure of that to Weck; that he 
represented multiple clients in a single matter without explaining to them the 
implications of his actions and the risks involved; that he entered into a 
business transaction with Weck without making full disclosure; that he made a 
statement of material fact or law that he should have known was false; and that 
he engaged in conduct that tends to defeat the administration of justice or 
brings the courts or legal profession into disrepute.
The majority opinion contains a detailed recitation of the circumstances 
surrounding the respondent's misconduct, and there is no need for me to repeat 
that evidence here. It is sufficient to note that the respondent served as 
counsel for Fox River Minerals, Inc. (FRM), receiving a weekly retainer of $500 
for his work. The respondent was the sole signatory on FRM's "special account," 
into which all receipts were deposited. The respondent would transfer funds from 
the special account into a separate payroll account as the money was needed. 
According to the testimony of one FRM employee, there was a scramble each week 
to raise enough money to cover FRM's payroll, and the respondent's role was "to 
deal with the continual money crisis" experienced by the company. It is clear 
that the respondent was intimately familiar with FRM's precarious financial 
condition.
On this record, I must disagree with the majority's conclusion that a 
six-month suspension is the appropriate sanction in this case. The evidence 
showed that the respondent encouraged the client to make her initial loan of 
$15,000 to FRM. The respondent broached the subject with Weck and told her that 
she would receive interest of $2,500 on the $15,000 loan within 60 days. The 
loan was to be secured by an assignment of 10% of the shares of FRM stock held 
by the company's principal shareholder, David Remy. Only two weeks earlier, 
however, the respondent had attended a meeting at which another person, Joseph 
Thoesen, received a promissory note from FRM for $120,000 and a written pledge 
of all Remy's FRM stock as collateral. The respondent assured Weck that the FRM 
company had great potential and that his wife planned to invest in the company. 
The respondent did not provide Weck with any specific information about FRM's 
finances, however, apart from the vague statement that the company required 
money to meet its payroll and expenses. The respondent did not advise Weck of 
his conflicting interests in the matter or recommend that she obtain independent 
advice before making the loan.
The circumstances surrounding the making of the second and third loans or 
investments are in dispute. Weck testified that the respondent approached her 
about the additional loans, while the respondent testified that they were Weck's 
idea. In any event, it is clear that the respondent still failed to inform Weck 
about his conflicting interests or recommend that she obtain independent advice. 
Apparently guided by the credo "In for a dime, in for a dollar," the respondent 
allowed Weck to extend further loans to FRM, even as its condition deteriorated 
and the likelihood that she would ever recover the value of her initial loan 
grew dimmer. On September 28, 1992, Weck gave the respondent a check for $5,000, 
which he immediately transferred to FRM's payroll account, then overdrawn. The 
respondent received a total of $1,000 from this sum in the form of weekly 
retainer payments. The respondent also urged her to convert her status from that 
of creditor to that of shareholder. This only increased the risk she was 
bearing, however, for in the event of an eventual bankruptcy, she would be 
further removed from recovering any portion of her funds. No shares were ever 
issued to represent her supposed equity interest in FRM.
On the occasion of the third loan, on October 23, 1992, Weck did not tap her 
own reserves for the amount of the loan but borrowed the sum-$20,000-from a 
bank. The respondent immediately deposited $7,500 of Weck's money into FRM's 
payroll account, which was again overdrawn. The respondent deposited the balance 
of the loan into another account, but that was exhausted within days, and was 
used primarily for payroll purposes. The respondent personally received $2,500 
from Weck's third loan of $20,000.
Weck's funds helped keep the enterprise afloat for a time; in that way, at 
least temporarily, she supported the value of the respondent's wife's $16,000 
investment in FRM. Moreover, the respondent further personally benefitted from 
the client's loans on those occasions when his weekly retainer was drawn on 
those fresh funds. In this case, the respondent did more than simply give his 
client a bad stock tip. He urged her to extend an initial loan to the company, 
and he later allowed her to make further loans or investments, without ever 
revealing to her his own interest in the matter and the conflict under which he 
was laboring. Even at the time of the hearing below, the respondent still 
refused to recognize the conflict of interests that arose in these 
circumstances. On this record, I believe that a suspension of at least one year 
is appropriate. In addition, I believe that restitution in the amount of Weck's 
loss is in order.
JUSTICE RATHJE, also dissenting:
I strongly disagree with the majority's conclusion that a six-month 
suspension is the appropriate sanction in this case. Respondent's conduct 
warrants at least a two-year suspension. Additionally, I would grant the 
Administrator's request that we make restitution to Nancy Weck a condition of 
respondent's reinstatement to the bar.
LENGTH OF SUSPENSION
Not much needs to be said in dissent, as the majority opinion reads like a 
dissent from its own conclusion. The majority begins its analysis by stating 
that respondent's sanction should be consistent with that imposed upon other 
attorneys for similar misconduct. Slip op. at 9. Next, the majority identifies 
four cases (Demuth, Rosin, Imming, and 
Goldstein) that are "instructive and relative to [its] determination of 
the proper sanction." Slip op. at 9. The majority reviews those cases, noting 
that each one involved a suspension of either one or two years. Thus, one 
assumes that the only mystery at this point is whether respondent will be 
suspended for one or two years. Then, in a twist that would make O. Henry proud, 
the majority decides not to follow its own "instructive and relative" authority 
and instead imposes a six-month suspension.
The majority offers several reasons for distinguishing the above cases, none 
of which is persuasive. First, the majority notes that the Hearing Board failed 
to prove that respondent engaged in fraud or misrepresentation. There were 
similarly no findings of fraud or misrepresentation in Demuth, 
Rosin, or Imming, yet Imming and Rosin were suspended for two 
years and Demuth was suspended for one year. In this part of its analysis, the 
majority also notes that respondent told Weck that, if she lost money, he would 
indemnify her out of any contingent fee he received as her attorney in an 
unrelated environmental contamination suit. Why the majority puts any stock in 
this statement, given everything else that respondent told Weck, is beyond me. 
Further, the record does not show that respondent returned any of Weck's money, 
and respondent has specifically argued throughout these proceedings that he 
should not have to make restitution to Weck.
The majority's next justification for its lenient sanction is that respondent 
himself did not borrow money from Weck. Although this is a factually accurate 
statement, it is entirely misleading. Respondent stood to gain personally from 
Weck's investment in FRM, and he directly benefitted from it. Respondent's wife 
invested $16,219.68 in the company, and respondent characterized this as a 
purchase of 10% of the company. Thus, respondent's family was potentially facing 
a significant loss if FRM went under. Further, at least $3,500 of the money Weck 
loaned to FRM went directly into respondent's pocket. In Rosin, we 
stated that, " 'Where an attorney exposes a client to the risk of loss, 
jeopardizes the freedom or the pecuniary or privacy interests of a client, or 
otherwise abuses his or her relationship with a client, whether or not the 
attorney receives an intended advantage, the attorney has breached a duty, owed 
to a client, of safeguarding the public.' " Rosin, 118 Ill. 2d  at 
388, quoting In re Saladino, 71 Ill. 2d 263, 276 (1978).
The majority's final reason for distinguishing the other cases is that 
respondent had "no prior disciplinary complaints against him" and had a 
"reputation for honesty and integrity." Slip op. at 13. This sounds familiar. 
Goldstein had a "previously unblemished record" (Goldstein, 103 Ill. 2d 
at 132); Imming had a "previously unblemished record for 26 years" 
(Imming, 131 Ill. 2d at 261); Rosin had "no prior history of 
disciplinary action" (Rosin, 118 Ill. 2d at 387); and Demuth had "not 
been charged with any other misconduct" and had a "good reputation in the 
community for honesty and integrity" (Demuth, 126 Ill. 2d at 14). If 
these cases are distinguishable, one wonders what the majority would consider to 
be "on all fours."
Respondent's conduct in this case was absolutely reprehensible. He committed 
six serious breaches of the Illinois Rules of Professional Conduct and caused 
his client to lose $40,000. I fail to see how a six-month suspension comports 
with the majority's stated desire to "impress upon others the seriousness of the 
misconduct at issue." Slip op. at 9. The majority recognizes that this type of 
conduct normally warrants a suspension of one or two years and then inexplicably 
suspends respondent for six months.
Additionally, the majority forgets to mention that, at the time of the 
hearing, respondent still did not concede that he had done anything wrong. In 
Demuth, we found it significant that the respondent did not fully 
understand his ethical obligations as an attorney. Demuth, 126 Ill. 2d  
at 15. Similarly, in Imming we based the discipline in part on the fact 
that the respondent did not appreciate the importance of his ethical 
obligations. Imming, 131 Ill. 2d  at 261. Here, respondent still 
maintained at the time of the hearing that there was no conflict of interest in 
this case. Further, respondent's petition to this court was based on his 
assertion that his conduct warrants only a censure. Respondent, like Imming and 
Demuth, deserves a suspension lengthy enough to impress upon him the seriousness 
of his misconduct.
RESTITUTION
Easily the most regrettable part of the majority opinion is its analysis of 
whether respondent should be ordered to make restitution to Weck. Here, the 
majority merely copies the Hearing Board's analysis, almost verbatim, without 
pausing to consider whether the Hearing Board's reasoning is sound or supported 
by authority.
The majority contends that respondent need not make restitution because he 
did not commit fraud or make deliberate misrepresentations. This point is not 
well taken. The majority's own "instructive and relative" authority shows that a 
finding of fraud or deliberate misrepresentation is not necessary for 
restitution to be made a condition of reinstatement. In Rosin, there 
were no findings of fraud or misrepresentation, and the respondent was suspended 
for two years and until further order of the court. The suspension would be for 
two years if the respondent made full restitution, with interest, to his client 
in the amount of her lost investment. Rosin, 118 Ill. 2d  at 388-89.
Whether the attorney commits fraud or misrepresentation is not the proper 
inquiry. Rather, restitution is appropriate when there is an improper benefit to 
the disbarred attorney or a loss to some victim. In re Fleischman, 135 Ill. 2d 488, 497-98 (1990); In re Alexander, 128 Ill. 2d 524, 536 
(1989). Restitution is a condition of reinstatement except in those rare 
instances where repayment to the victims is conclusively established to be 
impossible. Alexander, 128 Ill. 2d  at 536.
The majority's only other reason for denying restitution is that respondent 
explained some of the risks involved with FRM and that Weck had more business 
acumen than she claimed. I searched the Rules of Professional Conduct in vain 
for the provision that says that an attorney owes a fiduciary duty only to those 
clients who are lacking in business acumen. Even assuming that Weck had the 
business acumen of Bill Gates, what does that matter if respondent did not 
disclose his conflict of interest and gave her false information about what she 
was receiving in collateral? Respondent continually assured Weck of the 
long-term potential of the company and induced her to invest more money to 
protect her previous investments. He did all of this without disclosing his 
unquestionable conflict of interest and while giving Weck only illusory promises 
of security for her investments.
This is not a case about poor investment advice, as the Review Board 
suggested. Rather, this is a case about breaching fiduciary duties; representing 
multiple clients in a single matter without an explanation to each client of the 
risks involved; entering into a business transaction with a client without full 
disclosure; making statements of material fact that the attorney should have 
known were false; engaging in conduct that brings the legal profession into 
disrepute; and representing a client, without full disclosure, when the 
attorney's representation is materially limited by the attorney's 
responsibilities to another client and by respondent's own interests. The sad 
fact of the matter is that Nancy Weck lost $40,000 for no reason other than that 
respondent was her attorney. I would require respondent to repay this money as a 
condition of his reinstatement to the bar.
CONCLUSION
The six-month suspension imposed by the majority is too lenient, both on the 
facts of this case and in comparison to other cases involving similar 
misconduct. For all of the reasons stated above, and for those stated in the 
majority opinion, I would suspend respondent for two years and until further 
order of the court. This suspension would terminate at the end of two years only 
if respondent had made restitution to Nancy Weck in the amount of 
$40,000.