Opinion ID: 2570265
Heading Depth: 2
Heading Rank: 1

Heading: The ODC's Petition for Discipline

Text: On November 14, 2000, Petitioner Office of Disciplinary Counsel (the ODC) petitioned the Board to recommend sanctions against Au based on alleged violations of the Hawai'i Rules of Professional Conduct (HRPC) in three separate disciplinary matters.
The ODC alleged that, in the course of representing a client before the Circuit Court of the First Circuit, State of Hawai'i, Au drafted and filed two documents that cited to Sherry v. Ross, 846 F.Supp. 1424 (D.Haw. 1994) ( Sherry ). Au made the following representations to Circuit Court Judge Daniel G. Heely:  that Sherry was decided on the attorney-client crime-fraud provisions [of Rule 503 of the Hawai'i Rules of Evidence (HRE)] and the Fraudulent Conveyance Act ... [under] HRS 651 C-4;  that, in Sherry, the debtor conveyed real property to his wife with the help of an attorney who prepared the conveyance;  that the United States Court of Appeals for the Ninth Circuit upheld the Federal Court; and  that the Court [presumably the Ninth Circuit] found that fraudulent intent was not proven under the fraudulent conveyances provision as under the common law provision. In fact, Au's description of Sherry was not accurate because  Sherry addresses neither the attorney-client privilege nor the crime-fraud exception to the attorney-client privilege;  Sherry does not mention a relationship between an attorney and a client, nor does it mention an attorney or an attorney assisting in a conveyance;  Sherry was decided under neither the Fraudulent Conveyance Act nor the Uniform Fraudulent Transfer Act, but rather, Sherry was decided under the common law;  in Sherry, a third party (not the debtor) conveyed property to a debtor's wife, and a subsequent creditor challenged the conveyance; and  Magistrate Judge Francis I. Yamashita of the United States District Court for the District of Hawaii authored Sherry, and there was no Ninth Circuit opinion. The circuit court judge and opposing counsel complained separately to the ODC about Au's misconduct.
The ODC alleged that, with respect to several different clients, Au committed the following misconduct:  improperly deposited his clients' settlement proceeds into his office account;  improperly paid costs from his client trust account;  improperly deposited unearned fees into his office account;  improperly reimbursed his trust account;  failed to withdraw funds from his client trust account;  improperly deposited clients' settlement proceeds into his office account;  falsely certified in his annual registration statements for the Hawai'i State Bar Association (HSBA) that he was maintaining clients' funds and property in compliance with HRPC Rule 1.15; and  paid fees to a non-lawyer runner in exchange for the non-lawyer runner's referral of clients for legal services to Au.
The ODC alleged that, with respect to a particular client, Au improperly deposited unearned fees into his office account.