Case Title: Disciplinary Counsel v. Ulinski

Citation: 2005-Ohio-3673

Docket Number: 20042115

State: ohio

Court: Ohio Supreme Court

Date: 2005-08-03T00:00:00Z

Document:
[Cite as Disciplinary Counsel v. Ulinski, 106 Ohio St.3d 53, 2005-Ohio-3673.] 
 
 
DISCIPLINARY COUNSEL v. ULINSKI. 
[Cite as Disciplinary Counsel v. Ulinski,  
106 Ohio St.3d 53, 2005-Ohio-3673.] 
Attorneys — Misconduct — Engaging in conduct involving moral turpitude — 
Engaging in conduct involving deceit, fraud, misrepresentation, or 
dishonesty — Engaging in conduct adversely reflecting on fitness to 
practice law — Conflict of interest — Failure to maintain client funds in 
separate, identifiable account — Permanent disbarment. 
(No. 2004-2115 — Submitted February 16, 2005 — Decided August 3, 2005.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 04-001. 
__________________ 
 
Per Curiam. 
{¶ 1} Respondent, Christopher Karl Ulinski of Akron, Ohio, Attorney 
Registration No. 0046731, was admitted to the Ohio bar in 1990.  On November 
21, 2003, we suspended respondent from the practice of law on an interim basis 
pursuant to Gov.Bar R. V(5)(A)(4) upon notice that he had been convicted of a 
felony.  See In re Ulinski, 100 Ohio St.3d 1490, 2003-Ohio-6184, 799 N.E.2d 
173. 
{¶ 2} On February 5, 2004, relator, Disciplinary Counsel, charged 
respondent with violations of the Code of Professional Responsibility.  A panel of 
the Board of Commissioners on Grievances and Discipline heard the cause and, 
based on comprehensive stipulations, made findings of fact, conclusions of law, 
and a recommendation, all of which the board adopted. 
Misconduct 
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{¶ 3} On July 31, 2003, respondent pleaded guilty to conspiracy to 
commit securities fraud, mail fraud, and wire fraud in violation of Section 371, 
Title 18, U.S. Code.  He was sentenced to probation for a term of two years and 
ordered to participate in home confinement with electronic monitoring for six 
months.  Respondent was also ordered to pay $137,511.50 in restitution, although 
this requirement was not made a condition of his probation. 
{¶ 4} Respondent’s conviction followed his affiliation in 1992 with 
Andrew P. Bodnar, whom we disbarred for financial misdealing in Akron Bar 
Assn. v. Bodnar (2000), 90 Ohio St.3d 399, 739 N.E.2d 297.  In 1992, however, 
Bodnar was a practicing lawyer, securities salesman, financial planner, and tax 
preparer.  Gregory J. Best, a broker-dealer registered with the United States 
Securities and Exchange Commission, sold securities in Akron from 1992 through 
1997, and in 1998, he bought and took over part of Bodnar’s operation. 
{¶ 5} The parties stipulated that Bodnar, Best, and Ulinski engaged in 
activities from 1994 through April 1998 that led to Bodnar’s and Best’s 
indictment and to the information in which respondent was charged.  According 
to the stipulations, the group conspired through a Ponzi scheme to defraud 
investors in Ohio and other states.  A Ponzi scheme is perpetrated with fabricated 
investment deals in which investors are paid not with actual dividends and 
principal, but with money on loan from another source, usually new investors.  
See Cunningham v. Brown (1924), 265 U.S. 1, 7-9, 44 S.Ct. 424-425, 68 L.Ed. 
873, for a discussion of the original Ponzi swindle. 
{¶ 6} Bodnar organized and presented seminars on estate planning to 
attract potential investors.  Ulinski assisted with the seminars and provided legal 
counsel, including the preparation of trusts, to interested attendees.  Through their 
attorney-client relationships and services, Bodnar and Ulinski learned the extent 
and nature of unsuspecting clients’ assets.  Afterward, Bodnar, Best, and agents 
other than respondent approached the seminar clients and persuaded them to 
January Term, 2005 
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invest in their fraudulent scheme, which eventually approached or exceeded $41 
million.  The parties stipulated to some details of this scheme: 
{¶ 7} “The investments consisted of the following: (1) QuickStart 
Promissory Notes, supposedly to make bridge loans to QuickStart; (2) 
International Aerotech Promissory Notes, supposedly to make bridge loans to 
International Aerotech; (3) CBT and related entities; (4) [“The London Deal”]; 
and, (5) Hamilton-Larking, LLC and Laurex bridge loans. 
{¶ 8} “From 1995 through 1998, Bodnar and Best * * * sold so-called 
‘bridge loan’ investments, which they purported would use investors’ funds in 
order to form a pool of funds which would be advanced to various and mostly 
well-known companies, as [supposed] short-term loans.  [Bodnar and Best] 
represented that payment of high interest rates would be made, and promissory 
notes were signed by investors, with Bodnar and Best representing that 
investments would be repaid with significant interest, usually within 30 to 90 
days.  Bodnar and Best would represent that the investments were safe and secure, 
because there were stocks which would be used as collateral to protect the 
investments. 
{¶ 9} “In truth, Bodnar and Best knew, and, at some point, Ulinski knew 
there was a Ponzi scheme, and that investors were paid monies received from 
other bridge loan investors, done in a manner to conceal the fraudulent nature, and 
to lull investors into a false sense of security, so as to quiet any complaining 
investors, and to keep them from complaining to law enforcement authorities, and 
to induce investors to keep their princip[al] invested, and to have them increase 
investments.  In fact, there was no collateral securing any of these investments, 
except QuickStart Technologies, which was purportedly secured by QuickStart 
stock, purchased by Bodnar in his name, but purchased with investors’ money.  
Additionally, Bodnar and Best, and ultimately Ulinski, knew that, even this so-
called collateral was grossly insufficient. 
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{¶ 10} “Bank accounts at Key Bank were opened with Ulinski listed as 
the escrow agent, causing a false impression to investors that Ulinski was acting 
as a fiduciary who was protecting the interests of the investors.  On February 13, 
1995, Ulinski began issuing large checks to Bodnar out of Ulinski’s Interest on 
Lawyers’ Trust Accounts (“IOLTA”) account with Key Bank, into which Ulinski 
had deposited large amounts of investors’ funds, as escrow agent and fiduciary for 
said investors’ funds.  A February 13, 1995 Ulinski check, payable to Bodnar for 
$50,000.00, was identified as ‘QuickStart overage,’ but the source of the check 
was entirely from investor funds.  Additional checks were written from February 
16, 1995 through December 31, 1997, with the source for all these checks coming 
from investors’ deposits, in violation of a fiduciary duty, all of which aided 
Bodnar in perpetrating the Ponzi scheme. 
{¶ 11} “Ulinski also drafted a number of legal documents, including 
promissory notes and bridge loan agreements, which he knew [at some time] to be 
false and fictitious, and which were intended to be provided to investors by 
Bodnar and Best, and other securities salesmen and other co-conspirators. 
{¶ 12} “On a few occasions, Ulinski engaged in a fee-splitting 
arrangement with Best and other salesmen, wherein he would split a portion of his 
legal fees in return for their referral of their securities customers.  On some 
occasions, Best also paid a portion of his fees to the [respondent], Ulinski, in 
return for his referral of legal clients.” 
{¶ 13} The parties stipulated and the board found that respondent’s 
involvement in this fraudulent investment scheme had violated DR 1-102(A)(3) 
(barring illegal conduct involving moral turpitude), 1-102(A)(4) (barring conduct 
involving fraud, deceit, dishonesty, or misrepresentation), 1-102(A)(6) (barring 
conduct that adversely reflects on a lawyer’s fitness to practice law), 5-101(A)(1) 
(barring a lawyer, except with a client’s consent after full disclosure, from 
accepting employment where the lawyer’s conflicting interests may reasonably 
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affect the lawyer’s judgment on the client’s behalf), and 9-102(A) (requiring a 
lawyer to maintain client funds in a separate, identifiable bank account). 
Sanction 
{¶ 14} In recommending a sanction for this misconduct, the board 
considered the mitigating and aggravating factors of respondent’s case.  See 
Section 10 of the Rules and Regulations Governing Procedure on Complaints and 
Hearings before the Board of Commissioners on Grievances and Discipline 
(“BCGD Proc.Reg.”).  The board found that respondent had no prior disciplinary 
record and had cooperated completely with relator and federal authorities, his 
assistance to the United States Attorney having been instrumental in the 
convictions of nine codefendants.  BCGD Proc.Reg. 10(B)(2)(a) and (d).  The 
board further found that respondent had complied with the terms of his probation 
and interim suspension.  Respondent also reported his felony conviction to this 
court and stopped practicing law even before his interim suspension.  Since his 
suspension, respondent has worked for his wife, another attorney, preparing tax 
returns, and as of the hearing date, he had paid $2,128 in restitution, 
approximately ten percent of his gross salary, in a good faith effort to comply 
with the federal sentencing order. 
{¶ 15} Before the panel, respondent explained that he had not realized at 
first that he was defrauding investors and acting illegally by facilitating Bodnar’s 
and Best’s machinations.  He lamented his inexperience in securities law and 
conceded that he should have recognized the fraudulent scheme sooner, but he 
“looked away” from his ethical obligations and trusted in his associates.  
Respondent insisted that he had never intended to mislead investors but still 
accepted full responsibility for his misconduct. 
{¶ 16} The board was impressed with respondent’s testimony and remorse 
for his misconduct.  The board was also impressed by the testimony and many 
letters extolling respondent’s competence and character apart from his 
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involvement with Bodnar and Best.  These supporters related that respondent was 
dedicated to his family, church, and community, regularly volunteering on a 
personal and professional basis in a wide variety of ways.  Many supporters also 
insisted that respondent’s crimes were completely out of character because he was 
known in the legal community for his honesty, conscientiousness, and genuine 
concern for his clients. 
{¶ 17} The parties jointly recommended that respondent’s license to 
practice be indefinitely suspended, with his reinstatement to be conditioned on 
full compliance with the terms of his federal probation.  Respondent additionally 
requested that he be credited for the time served since the interim suspension of 
his license.  Adopting the panel’s recommendation, the board recommended that 
respondent be indefinitely suspended from the practice of law, and, based on the 
strength of his mitigation evidence, that he be given credit for the time served 
from the date of his November 21, 2003 interim suspension. 
{¶ 18} Upon review, we agree that respondent violated DR 1-102(A)(3), 
1-102(A)(4), 1-102(A)(6), 5-l0l(A)(1), and 9-102(A), as found by the board.  We 
find the recommended indefinite suspension, however, far too lenient for 
misconduct of this magnitude. 
{¶ 19} “A lawyer is prohibited by the Disciplinary Rules from 
participating in fraudulent or dishonest schemes.”  Disciplinary Counsel v. Dukat 
(1997), 79 Ohio St.3d 189, 190, 680 N.E.2d 972.  Thus, in Disciplinary Counsel 
v. Bein, 105 Ohio St.3d 62, 2004-Ohio-7012, 822 N.E.2d 358, we disbarred a 
lawyer who knowingly conspired with others in an illegal commercial enterprise 
involving the interstate transportation and sale of stolen property.  And even 
though the lawyer in Disciplinary Counsel v. Williams (1993), 66 Ohio St.3d 71, 
609 N.E.2d 149, cooperated with authorities and was considered the least culpable 
codefendant, we disbarred him for knowingly conspiring to launder proceeds 
from illegal drug sales. 
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{¶ 20} In imposing our most severe sanction, we admonished in Bein: 
{¶ 21} “A lawyer who engages in the kind of criminal conduct committed 
by respondent violates the duty to maintain personal honesty and integrity, which 
is one of the most basic professional obligations owed by lawyers to the public. 
Respondent's misconduct was harmful not only to the businesses affected but also 
to the legal profession, which is and ought to be a high calling dedicated to the 
service of clients and the public good.”  Id., 105 Ohio St.3d 62, 2004-Ohio-7012, 
822 N.E.2d 358, ¶ 13. 
{¶ 22} Respondent claims that he initially executed his fiduciary duties 
overseeing the escrow account and the funds held in his client trust account 
without realizing any impropriety.  But as early as February 1995, respondent 
knew that there were “problems” with paying off promissory notes and did 
nothing to protect his clients’ or investors’ interests.  Not until the fall of 1997 did 
respondent finally conclude that the collateral in escrow had become grossly 
insufficient and that Bodnar and his agents were duping more and more investors 
by misrepresenting the security of their loans. 
{¶ 23} In addition to the lawyer’s mental state, the ethical duties that he or 
she violated, and attendant mitigating or aggravating circumstances, we consider 
the injury caused by the professional misconduct in determining the appropriate 
sanction.  Cleveland Bar Assn. v Glatki (2000), 88 Ohio St.3d 381, 384, 726 
N.E.2d 993.  Here, the effect was devastating.  The investment scam in which 
respondent participated eventually affected $41 million in investor funds.  
Respondent acknowledged the “overwhelming” number of injured investors, 
estimating that approximately 100 of his own clients may have been victimized.  
Moreover, at the time he began cooperating with the United States Attorney’s 
Office, respondent estimated that he was holding $3 to $5 million of investors’ 
money without sufficient security. 
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{¶ 24} Respondent’s cooperation, contrition, character evidence, lack of a 
prior disciplinary record, and attempt at restitution do little to counterbalance the 
financial havoc he helped to cause for so many clients and others.  The public’s 
protection requires our most rigorous sanction.  Respondent is therefore 
permanently disbarred.  Costs are taxed to respondent. 
Judgment accordingly. 
 
MOYER, C.J., RESNICK, PFEIFER, LUNDBERG STRATTON, O’CONNOR, 
O’DONNELL and LANZINGER, JJ., concur. 
__________________ 
 
Jonathan E. Coughlan, Disciplinary Counsel, and Stacy Solochek 
Beckman, Assistant Disciplinary Counsel, for relator. 
 
Law Offices of Charles W. Kettlewell and Charles W. Kettlewell, for 
respondent. 
______________________