Opinion ID: 1097213
Heading Depth: 1
Heading Rank: 1

Heading: The Scheme

Text: A recital of the facts must precede resolution of the issues raised on appeal. The Louisiana-wide get-rich-quick scheme involved the staging of fraudulent automobile accidents for the purpose of creating false personal injury claims. These claims would be submitted to the insurance carriers for the respective vehicles involved in the wrecks with the aid and contrivance of certain physicians and lawyers. As the scheme evolved, the participants even coined their own terminology which, though alien to the unintiated, became known to all those who participated. This glossary of modern day crookedness was quite descriptive. Certain participants were known as `recruiters'. The recruiters function, not unnaturally, was to recruit others who assumed titles commensurate with their organizational function. There were the `hitters', whose function it was to drive the `hitter' vehicle in each collision which supposedly was to be liable for causing the accident. Then there was the `target' vehicles. The occupants of the `target' were known as the `driver' and the `riders'. It was determined at the outset that pregnant women made exceptionally good riders as they could claim pregnancy related injuries which would be both hard to disprove and easily settleable with the insurance carriers. Throughout the scheme there was an effort made on the part of the participants to use vehicles and drivers which were covered by high limits of liability insurance. According to a pre-arranged timetable, the `hitter' vehicle would strike the `target' vehicle either broadside or in the rear end. The occupants of the `target' vehiclethe driver and ridersand occasionally some of those in the `hitter' vehicle, feigning injuries, would be sent to a particular doctor and lawyer who would facilitate phony claims by creating a medical history for treatment of non-existent injuries and making a demand on the appropriate insurance company. The key to immediate financial gain in each staged collision was advances paid by the attorneys to the `riders' for whom allegedly false claims were being submitted. These advances were paid in the form either of cash payments or loans from local financial institutions, co-signed by the attorney handling the claim. Of the usual advance ranging from $250 to $500, part was retained by the rider-claimant with the rest being distributed among the organizers, recruiters, and others who assisted with various aspects of staging the wreck. When the claim was ultimately settled with the insurance carrier, the proceeds would be applied to (i) repay the advancing attorney or in such cases, to liquidate the guaranteed bank loan and (ii) to pay the inflated doctor's bill, not infrequently, with kickbacks going to both the organizers and the participating attorneys in addition to their usual shares. U. S. v. Perez, 489 F.2d 51, 54-55. (Footnotes omitted). Several objections to the commissioner's findings of fact and conclusions of law have been raised by respondent, who first contends that this proceeding is premature because his conviction is not yet final, there being an appeal presently pending in the Fifth Circuit from a ruling by a federal district judge that denied his motion for a new trial. Article XV, § 8, paragraph 7 of the Articles of Incorporation of the Louisiana State Bar Association, under which this proceeding was brought, provides: (7) After the conviction has become final, that is, all appeals have been concluded or exhausted, the procedure shall be as follows: (a) The Committee will file a petition in the Supreme Court seeking disbarment or any other remedy that the Committee deems appropriate, and the petition will be served upon the respondent in the same manner as in ordinary proceedings. (b) When issue is joined by answer by the respondent, a Commissioner will be appointed by the Supreme Court to represent the Court in the same manner as in ordinary proceedings. (c) At the hearing before the Commissioner, the certificate of the conviction of the respondent shall be conclusive evidence of his guilt of the crime for which he has been convicted. (d) At the hearing based upon a respondent's conviction of a crime, the sole issue to be determined shall be whether the crime warrants discipline, and if so, the extent thereof. At the hearing the respondent may offer evidence only of mitigating circumstances not inconsistent with the essential elements of the crime for which he was convicted as determined by the statute defining the crime. Respondent's conviction became final in June of 1974, twenty-five days after the United States Supreme Court denied his application for a writ of certiorari. Rule 58 of the Rules of the Supreme Court of the United States. See Louisiana State Bar Association v. Ponder, 263 La. 743, 269 So.2d 228 (1972). The appeal on which respondent relies is a post-conviction application for a new trial, first filed in December of 1972 after the first appeal from the conviction was taken April 29, 1971. The possibility of post-conviction relief through applications for writs of habeas corpus or motions for new trials does not affect the finality of the conviction. Louisiana State Bar Association v. Ponder, supra . Next, respondent contends that Article XV, § 8, paragraph 7(c), relating to the certificate of conviction being conclusive evidence of guilt, is not applicable because his conviction on December 18, 1970 occurred before the effective date of this article, September 1, 1971. This argument has no merit. The conviction became final in June of 1974, twenty-five days after the United States Supreme Court denied writs. Article XV, § 8, paragraph 7 was effective when the conviction became final and is applicable to this proceeding. Louisiana State Bar Association v. Ponder, supra. Finally, respondent contends that the commissioner erred in refusing to consider the testimony offered by the respondent, through various witnesses, affidavits and transcripts, tending to negate his guilt of the crime charged. Specifically, respondent attempted to show through various witnesses that he had no knowledge of the fact that the accidents were staged. The commissioner's ruling is correct. Paragraph 7(c) and (d) of Article XV, § 8 provides: (c) At the hearing before the Commissioner, the certificate of the conviction of the respondent shall be conclusive evidence of his guilt of the crime for which he has been convicted. (d) At the hearing based upon a respondent's conviction of a crime, the sole issue to be determined shall be whether the crime warrants discipline, and if so, the extent thereof. At the hearing the respondent may offer evidence only of mitigating circumstances not inconsistent with the essential elements of the crime for which he was convicted as determined by the statute defining the crime. Accepting respondent's position would require the committee to try the respondent anew for the crime of which he clearly stands convicted. This is unrealistic and not contemplated by the articles of incorporation. Rather, under 7(c), supra, the certificate of conviction shall be conclusive evidence of his guilt of the crime. Respondent, at the hearing, may introduce evidence only of mitigating circumstances not inconsistent with the essential elements of the crime for which he was convicted. An essential element of the crime for which respondent was convicted is knowledge. 18 U.S.C. § 371. United States v. Johnson, 504 F.2d 622 (7th Cir. 1974); United States v. Roselli, 432 F.2d 879 (9th Cir. 1970). Thus, evidence that respondent had no knowledge of the fact that the accidents were staged is inconsistent with an essential element of the crime for which he was convicted, and hence inadmissible at the hearing. Mitigating circumstances are such as do not constitute a justification or excuse of the offense in question, but which, in fairness and mercy, may be considered as extenuating or reducing the degree of moral culpability. See In re Greiner, 61 Wash.2d 306, 378 P.2d 456 (1963). Respondent argues that the testimony of these witnesses is relevant, even if he cannot be heard to contest his guilt of the crime, to show that his participation in the scheme was somehow lesser than others, i.e., he was on the periphery of the scheme, not in the center. We believe, however, that such evidence is not evidence of mitigating circumstances not inconsistent with the essential elements of the crime. Rather, such evidence goes to the guilt or innocence of the respondent. The committee is not a jury. The jury at his trial found sufficient evidence to prove him guilty beyond a reasonable doubt of mail fraud and conspiracy. The jury determined that Shaheen was not so far toward the periphery of the scheme that he was guiltless, but that he was so directly involved that he was guilty beyond a reasonable doubt. The committee can hear evidence in mitigation, extenuating circumstances which tend to diminish the need for punishment, but it need not hear evidence tending to show only that respondent did not commit the act for which he was convicted. As to the merits, we agree with the commissioner's finding that the offenses for which Shaheen stands convicted are serious enough to warrant discipline. The remaining issue is the extent of discipline. The crimes involved in this case strike at the very heart of our legal profession. Respondent stands convicted by a jury of participating in a scheme to defraud insurance companies by the staging of fake accidents, resulting in fake injuries, for which damages were sought and received from unwitting insurers. Respondent Shaheen's part in this episode is summed up by Chief Judge Brown: The convicted professionals, five lawyers and two physicians in number, are unanimous in their contention that they were misled by both their clients, or patients as the case was, and the DeMary brothers as to the fraudulent character of the collisions. They contend that the testimony relied on to establish their knowing complicity was self-serving, uncorroborated and unreliable. Appellants point to certain testimony by the government's key witnesses which was controverted by others of the government's witnesses and argue tenaciously that these inconsistencies undermine from the validity of the verdict. We find these contentions without merit. Not only do we refuse to invade the province of the jury, except where the most compelling absence of evidence so dictates, here we perceive much more than the slight evidence required. Tomplain v. United States, [5 Cir., 1930, 42 F.2d 202] supra. Other than the testimony of Kenneth and Larry DeMary and others similarly situated, which is assailed on common grounds (see, notes 41 and 42, supra), the showing on the crucial question of knowledge on the part of the convicted professionals was entirely circumstantial. Nonetheless, it was substantial. Repeatedly, the lawyers dealt, not with their clients, but directly with the DeMary brothers and their appointees. Money exchanged hands, employment contracts were signed, and promissory notes were executed without the lawyers ever having laid eyes on the second party to the transaction. . . .