Mass.Gov home  home get things done agencies Search Mass.Gov

Commonwealth of Massachusetts

No. BD-2007-017


S.J.C. Order of Term Suspension entered by Justice Ireland on March 16, 2007, with an effective date of April 16, 2007.1


The respondent is a sole practitioner admitted to practice in 1969. He stipulated to the material facts charged in a petition for discipline.

The respondent represented Everett Savings Bank (ESB). The respondent was ESB’s general counsel, served on ESB’s board of trustees, and handled nearly all of ESB’s mortgage closings.

On September 27, 1993, a vice president in charge of the lending division of ESB arranged for a $4,000,000 line of credit to a developer. The purpose of the line of credit was to finance the purchase and development of a new residential real estate subdivision located in Malden, MA. The purchase price for the land was $3,080,000, but ESB authorized a loan of no more than $1,200,000 toward the purchase of the land. The remainder of the purchase price of the land was paid by the developer through the execution of twelve second mortgage notes (“second mortgages”).

In February 1994, the developer applied for an additional $1,000,000 loan for construction of the development project. The vice president never submitted the loan request to the Board of Investment for consideration. Instead, the developer recruited individual investors who would obtain loans from ESB in their own names and then turn the loan proceeds over to him to pay down his loan.

Between March and September 1994, the developer arranged the sales of twenty-seven lots to nineteen straw purchasers who purported to purchase the lots as personal investments. Each of the straw purchasers in turn obtained mortgage financing for the purchases from ESB. The vice president knew that the money loaned to the straw purchasers was actually going to the developer. In total, $3,282,000 was lent to the developer through the straw purchasers.

The respondent as counsel to the mortgage bank acted as settlement agent for the closings on the purported sales of Mountain View lots to the nineteen straw purchasers.

Between July and December 1994, the Federal Deposit Insurance Corporation (FDIC) conducted a safety and soundness examination of ESB. During this examination, the FDIC became concerned about loan disbursement checks issued payable to purchasers of the lots but endorsed by the developer. There were no power of attorney agreements included with the closing documents for these loans.

The FDIC sought powers of attorney documenting that the named purchasers of certain lots had, at the time of their loan closings with the bank, authorized the developer to endorse the checks representing the loan proceeds. The respondent had been the closing attorney and knew that no such powers of attorneys had been signed at the closings.

To protect his bank client, the respondent provided the FDIC with powers of attorney that he drafted for the purchasers’ signatures months after the closings and that he falsified by backdating. The respondent’s notarization of the purchasers’ signatures on the powers of attorney misrepresented the dates on which the signatories appeared before him. The respondent also misrepresented to the FDIC in a letter that the powers of attorney were signed contemporaneously with the closings. However, these violations all arose from the same factual nexus, the backdated powers of attorney were duly signed by the actual purchasers, and the purchasers had in fact agreed to turn the loan proceeds over to the developer. The respondent’s intention, however wrong, was to conform the paperwork to the parties’ arrangements.

On or about June 28, 1999, the respondent received from the FDIC a notice of intention to prohibit him from further participation in the conduct of the affairs of the ESB and any other insured depository institution or organization listed in the Federal Deposit Insurance Act, 12 U.S.C. §1818 section 8(e)(7)(A). The notice included allegations of unsafe or unsound banking practices and breaches of a fiduciary duty.

On October 14, 1999, the respondent signed a consent agreement in lieu of prosecution. The respondent signed a “Stipulation And Consent To The Issuance Of An Order Of Prohibition From Further Participation” for the purpose of the FDIC proceeding, and without admitting or denying any violations, consented to the issuance of an order prohibiting him from further participation in the conduct of the affairs of the ESB and any other insured depository institution, without the prior written approval of the FDIC. On January 12, 2000, the FDIC issued an Order of Prohibition from Further Participation.

By fabricating and backdating powers of attorney, causing the straw purchasers to execute backdated powers of attorney, and falsely notarizing the dates of the powers of attorney, the respondent violated Canon One, Disciplinary Rule 1-102(A)(4) (lawyer shall not engage in conduct involving dishonesty, fraud or misrepresentation) and (6) (lawyer shall not engage in any other conduct that adversely reflects on fitness to practice law), and Canon Seven, Disciplinary Rule 7-102(A) (6) (lawyer shall not participate in the creation or preservation of evidence when he knows that it is false).

By knowingly misrepresenting to the FDIC in a letter dated November 9, 1994, that all powers of attorney had been delivered to the ESB and that they had not been previously forwarded to ESB with the closing documents because the developer had the originals, the respondent violated Canon One, Disciplinary Rule 1-102(A) (4) and (6), and Canon Seven, Disciplinary Rule 7-102(A) (5) (lawyer shall not knowingly make a false statement of law or fact) and (6).

The matter came before the Board of Bar Overseers on a stipulation of facts, disciplinary violations and a joint recommendation for a three-month suspension from the practice of law. The respondent stipulated to the material facts in the petition for discipline and to the disciplinary rule violations charged in the petition. On February 12, 2007, the Board voted unanimously to accept the stipulation and to recommend the agreed-upon disposition to the Supreme Judicial Court. The Court so ordered on March 16, 2007.

1 The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

2 Compiled by the Board of Bar Overseers based on the record before the Supreme Judicial Court.

BBO/OBC Privacy Policy. Please direct all questions to
© 2001. Board of Bar Overseers. Office of Bar Counsel. All rights reserved.