Title: Disciplinary Counsel v. Schwartz

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Disciplinary Counsel v. Schwartz, Slip Opinion No. 2012-Ohio-5850.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2012-OHIO-5850 
DISCIPLINARY COUNSEL v. SCHWARTZ. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Disciplinary Counsel v. Schwartz,  
Slip Opinion No. 2012-Ohio-5850.] 
Attorney misconduct, including engaging in illegal conduct involving moral 
turpitude and engaging in conduct involving dishonesty, fraud, deceit, or 
misrepresentation—Permanent disbarment. 
(No. 2012-0644—Submitted August 21, 2012—Decided December 12, 2012.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 11-008. 
__________________ 
 
Per Curiam. 
{¶ 1} Robert Leon Schwartz, Attorney Registration No. 0000818, was 
admitted to the practice of law in Ohio in October 1964.  For most of his legal 
career, Schwartz practiced as a sole practitioner specializing in representation of 
plaintiffs in personal-injury cases.  In a previous disciplinary case, Schwartz was 
issued a public reprimand because of a conflict-of-interest situation in which 
SUPREME COURT OF OHIO 
2 
 
Schwartz represented both a personal-injury plaintiff and her health insurer.  See 
Cincinnati Bar Assn. v. Schwartz, 74 Ohio St.3d 489, 660 N.E.2d 422 (1996). 
{¶ 2} On June 8, 2010, the United States District Court for the Southern 
District of Ohio, Western Division, entered a judgment finding Schwartz guilty of 
two felony counts.  As a result, we issued an interim suspension of Schwartz’s 
license to practice law on August 5, 2010.  See In re Schwartz, 126 Ohio St.3d 
1526, 2010-Ohio-3605, 931 N.E.2d 127. 
{¶ 3} On February 14, 2011, relator, disciplinary counsel, filed a two-
count complaint against Schwartz that parallels the two counts of Schwartz’s 
felony conviction.  Count One concerns Schwartz’s conviction for mail fraud in 
connection with his scheme to defraud Hadassah Hospital, a beneficiary of the 
estate of Beverly W. Hersh, of approximately $2,492,469 between May 5, 2005 
and May 6, 2009.  Count Two concerns the filing of a false tax return for tax year 
2007, in which Schwartz failed to report three types of income:  income he paid 
himself from the Hersh trust, income he diverted from the trust to care for his 
mother, and income from other legal fees. 
{¶ 4} The complaint went to hearing before the panel on December 5, 
2011.  Schwartz, who was incarcerated, testified by telephone, and an attorney 
appeared at the hearing on his behalf.  Relator presented a case based on 
documentation of Schwartz’s guilty plea in which he stipulated to the factual 
bases for his conviction. 
{¶ 5} With respect to Count One, the complaint charged, and the panel 
and the board found, that Schwartz’s conduct prior to February 1, 2007, the 
effective date of the Rules of Professional Conduct, constituted violations of the 
Code of Professional Responsibility, specifically DR 1-102(A)(3) (prohibiting a 
lawyer from engaging in illegal conduct involving moral turpitude), 1-102(A)(4) 
(prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, 
deceit, or misrepresentation), and 1-102(A)(6) (prohibiting a lawyer from 
January Term, 2012 
3 
 
engaging in conduct that adversely reflects on the lawyer’s fitness to practice 
law).  With respect to Schwartz’s conduct on or after February 1, 2007, the 
complaint charged, and the panel and the board found, violations of the Rules of 
Professional Conduct as follows:  Prof.Cond.R. 8.4(b) (prohibiting a lawyer from 
committing an illegal act that reflects adversely on the lawyer’s honesty or 
trustworthiness), 8.4(c) (prohibiting a lawyer from engaging in conduct involving 
dishonesty, fraud, deceit, or misrepresentation), and 8.4(h) (prohibiting a lawyer 
from engaging in conduct reflecting adversely on the lawyer’s fitness to practice 
law). 
{¶ 6} With respect to Count Two, the false tax return for tax year 2007, 
the complaint charged, and the panel and the board found, violations of 
Prof.Cond.R. 8.4(b), 8.4(c), and 8.4(h).  After weighing the aggravating and 
mitigating factors, the panel overruled relator’s recommendation of disbarment 
and recommended indefinite suspension with reinstatement conditioned on 
Schwartz’s completing his supervised release and making full restitution.  The 
board adopted the panel’s findings of fact and conclusions of law, but 
recommends permanent disbarment. 
{¶ 7} We adopt the board’s recommendation, and we order that Schwartz 
be permanently disbarred from the practice of law. 
Misconduct 
{¶ 8} The facts underlying Schwartz’s conviction for mail fraud and tax 
fraud were stipulated to by Schwartz himself as part of the federal court’s 
adoption of the plea agreement. 
Background 
{¶ 9} On or about May 9, 2003, Schwartz was given power of attorney 
for the financial affairs of a wealthy elderly friend and client named Beverly W. 
Hersh.  Schwartz assisted Hersh in preparing several codicils to her will and 
SUPREME COURT OF OHIO 
4 
 
arranged for the preparation of three trust agreements and subsequent 
amendments thereto by a local Cincinnati law firm. 
{¶ 10} Hersh’s estate plan provided that as of December 13, 2003, her 
adjusted estate was to be placed in the Beverly W. Hersh Trust, dated September 
23, 2003.  Thereafter the estate plan provided for distribution of the adjusted 
estate as follows:  (1) 20 percent to Hadassah Hospital, (2) 30 percent to the 
Beverly W. Hersh Charitable Trust, dated December 13, 2003, and (3) 50 percent 
to the Hersh Revocable Trust, dated December 13, 2003.  Schwartz was named 
executor and trustee for the related trusts. 
{¶ 11} As for funds of the Beverly W. Hersh Charitable Trust, they were 
to be distributed to organizations with Internal Revenue Code 501(c)(3) tax 
exempt status, like Hadassah Hospital, which was a 501(c)(3) organization.  The 
funds of the Hersh Revocable Trust were to be distributed at the sole discretion of 
Schwartz, as trustee, to organizations or to individuals in a manner that would 
assist them with overcoming financial and substance-abuse issues and help them 
live more fulfilling lives and to provide benefits to those who assisted and 
befriended Mrs. Hersh during her life. 
{¶ 12} On May 5, 2005, Beverly Hersh died.  The estate tax return, which 
Schwartz in his capacity as executor and trustee filed on behalf of the Hersh 
Estate on or about August 2, 2006, indicated that Hadassah Hospital was to 
receive approximately $2,502,469, while the Hersh Charitable Trust was to 
receive approximately $3,756,703.  The remaining residual estate balance of 
approximately $6,261,172 was to be disbursed at Schwartz’s direction through the 
Hersh Revocable Trust—which was also known as the Hersh Private Trust or the 
Hersh Discretionary Trust. 
Count One:  Fraud and the Hadassah Hospital Bequest 
{¶ 13} The essence of Count One, mail fraud, is that Schwartz used the 
U.S. Postal Service in conjunction with defrauding Hadassah Hospital of the 
January Term, 2012 
5 
 
funds it was to have received pursuant to the Hersh estate plan.  As part of 
Schwartz’s plea, he explicitly agreed that “mandatory restitution in the amount of 
at least $2,492,469 will be ordered paid to Hadassah Hospital for the guilty plea to 
Count One,” and in conjunction with that agreement, Schwartz expressly 
stipulated that “the readily provable fraud loss caused by the defendant was 
$2,492,469.” 
{¶ 14} By August 2008, Schwartz had disbursed more than $9 million 
from the Hersh Discretionary Trust, which was significantly more than 50 percent 
of the estate that was allocated under the estate plan.  Meanwhile, Schwartz had 
made distributions to recognized charities of less than $50,000 from the Hersh 
Charitable Trust.  To Hadassah Hospital, Schwartz had made contributions 
totaling $210,000.  Despite the representations Schwartz made as trustee on the 
estate tax return and the benefit the estate enjoyed by virtue of the reporting of 
charitable deductions, Schwartz distributed only nominal amounts to Hadassah 
Hospital and other charities. 
Count Two:  Filing False Tax Return 
{¶ 15} As for Count Two, Schwartz signed and submitted his tax year 
2007 federal individual income tax return on April 14, 2008, knowing it to be 
false in that the return omitted a substantial portion of his gross receipts.  More 
specifically, the falsehood consisted of Schwartz’s failure to report as gross 
receipts approximately $806,739, which was composed of (1) money he had paid 
to himself from the Hersh trust funds, (2) money he had diverted for the care of 
his mother from trust funds, and (3) money he had received from other clients.  
Schwartz also agreed that he had filed materially false returns for tax years 2002 
through 2006, underreporting gross receipts for those years by approximately 
$2,533,515. 
 
 
SUPREME COURT OF OHIO 
6 
 
Federal Sentence 
{¶ 16} The federal district court sentenced Schwartz to a four-year prison 
term plus a three-year term of supervised release.  Also part of the sentence was 
the order that Schwartz pay $3,227,686.12 (consisting of $2,292,469 in restitution 
to Hadassah Hospital plus $935,217.12 in restitution to the Internal Revenue 
Service). 
Aggravation and Mitigation 
{¶ 17} The panel and the board found two aggravating factors:  
Schwartz’s prior discipline, see BCGD Proc.Reg. 10(B)(1)(a); and the existence 
of a dishonest or selfish motive, see BCGD Proc.Reg. 10(B)(1)(b).  In mitigation, 
the panel and the board found that Schwartz (1) had made full and free disclosure 
and displayed a cooperative attitude throughout the disciplinary proceedings, see 
BCGD Proc.Reg. 10(B)(2)(d), (2) presented character evidence, see BCGD 
Proc.Reg. 10(B)(2)(e), and (3) had paid $972,185.03 in restitution up to the time 
of the hearing. 
Recommended Sanction 
{¶ 18} Relator recommended disbarment, relying on four cases.  
Disciplinary Counsel v. Bertram, 85 Ohio St.3d 113, 707 N.E.2d 464 (1999); 
Disciplinary Counsel v. Sabroff, 123 Ohio St.3d 182, 2009-Ohio-4205, 915 
N.E.2d 307; Toledo Bar Assn. v. Ritson, 127 Ohio St.3d 89, 2010-Ohio-4504, 936 
N.E.2d 931; Disciplinary Counsel v. Hunter, 106 Ohio St.3d 418, 2005-Ohio-
5411, 835 N.E.2d 707.  The panel disagreed, recommending indefinite suspension 
on the authority of Disciplinary Counsel v. Smith, 128 Ohio St.3d 390, 2011-
Ohio-957, 944 N.E.2d 1166.  The board disagrees with the panel’s recommended 
sanction and instead recommends permanent disbarment.  Schwartz has filed 
objections to the board’s recommendation. 
 
 
January Term, 2012 
7 
 
Objections and Disposition 
{¶ 19} Schwartz’s objections focus on the sanction:  Schwartz urges the 
court to adopt the panel’s recommended sanction of indefinite suspension rather 
than the board’s recommendation of disbarment.  The principal points advanced 
by the objections are that (1) another law firm that was engaged to draft estate and 
trust documents performed its work in a manner that contributed to Schwartz’s 
wrongful acts, (2) the amount of “adjusted estate” and therefore the amount of the 
bequest owed to Hadassah Hospital was not known until after Schwartz was 
sentenced, (3) several matters relating to these issues are in litigation. 
{¶ 20} We find Schwartz’s objections to be unpersuasive.  First of all, we 
have stricken the Bonasera opinion letter on which Schwartz predicates his theory 
that in drafting the estate and trust documents, the outside law firm committed 
errors that contributed to the wrongs perpetrated by Schwartz.  See 132 Ohio 
St.3d 1468, 2012-Ohio-3168, 970 N.E.2d 969.  Second, Schwartz’s theory that the 
amount owed to Hadassah Hospital was unknown conflicts with the facts to which 
Schwartz himself stipulated when entering his guilty plea; he expressly 
acknowledged in that context that “the readily provable fraud loss caused by the 
defendant was $2,492,469.”  We decline to accept Schwartz’s post hoc assertions 
of factual ambiguity when he clearly and explicitly agreed to the facts in the 
criminal proceedings.  Finally, we find that the pendency of litigation concerning 
aspects of Schwartz’s dealings is irrelevant to our determination of the facts and 
the imposition of the proper sanction, given all the circumstances that confront us 
in this matter. 
{¶ 21} We also find that the panel’s reliance on Disciplinary Counsel v. 
Smith, 128 Ohio St.3d 390, 2011-Ohio-957, 944 N.E.2d 1166, was misplaced.  
Smith involved an attorney’s conviction for a scheme to conceal income from the 
Internal Revenue Service, an aspect not entirely dissimilar from Count Two 
against Schwartz.  But the present case also presents Schwartz’s fraud in 
SUPREME COURT OF OHIO 
8 
 
distributing money intended for Hadassah Hospital.  In spite of the decedent’s 
plain intent to bestow substantial funds on that charity, in callous dereliction of 
the trust and confidence that the decedent had placed in Schwartz to effectuate her 
wishes, and in contravention of the recipient’s rights as a beneficiary of the estate 
and the trust, Schwartz diverted funds to other purposes.  This grievous offense 
does not correlate with any wrongdoing alleged in Smith.  Accordingly, we find 
that the Smith case is not apposite. 
Conclusion 
{¶ 22} For all the foregoing reasons, we adopt the findings and 
conclusions of the board and we adopt the recommended sanction that Schwartz 
be disbarred.  We therefore order that Schwartz be permanently disbarred from 
the practice of law.  Costs are taxed to respondent. 
Judgment accordingly. 
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL, 
LANZINGER, and CUPP, JJ., concur. 
KENNEDY, J., not participating. 
__________________ 
 
Jonathan E. Coughlan, Disciplinary Counsel, and Philip A. King, Assistant 
Disciplinary Counsel, for relator. 
 
Robert L. Schwartz, pro se. 
______________________