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Commonwealth of Massachusetts

NO. BD-93-042

IN RE: PAUL COOPERSTEIN

S.J.C. Order of Reinstatement entered by Justice Cheney on July 21, 19991

REPORT OF HEARING PANEL

The Petitioner, Paul A. Cooperstein, was convicted in the United States District Court for the District of Massachusetts of making a false statement to a federally insured bank in violation of 18 U.S.C § 1014. The Petitioner was sentenced to probation for one year with three months home detention, required to perform 200 hours of community service, and fined $25,000.00.

On July 2, 1993, the Petitioner was temporarily suspended from the practice of law. On May 9, 1994, the Supreme Judicial Court (Greaney, J.) entered an order of indefinite suspension retroactive to July 3, 1993. Matter of Cooperstein, 10 Mass. Att'y Disc. R 41 (1994).

On January 20, 1998, the Petitioner filed a "Motion for Special Leave to Engage in Employment as a Paralegal." Bar Counsel opposed the motion on the ground that it was premature since it was filed prior to the termination of five years from the effective date of the indefinite suspension. On March 4, 1998, the single justice denied the motion.

On August 26, 1998, the Petitioner filed a renewed motion to engage in paralegal work. Bar Counsel did not oppose the motion. On September 9, 1998, the Court allowed this motion.

On September 1, 1998, the Petitioner filed a petition for reinstatement pursuant to S.J.C. Rule 4:01, §18. On October 7, 1998, the Petitioner filed his completed reinstatement questionnaire with the Board of Bar Overseers.

On February 23, 1999, a Hearing Panel of the Board of Bar Overseers conducted a hearing on the petition for reinstatement. The Chair of the panel is Steven P. Sabra, Esq. Other panel members are Cynthia J. Cohen, Esq., and Naomi Gordon. The Petitioner was represented by Thomas R. Kiley, Esq., and the Bar Counsel was represented by Nancy Kaufman, First Assistant Bar Counsel.

The panel received in evidence twenty-eight exhibits offered by the Petitioner and two exhibits offered by Bar Counsel. The Petitioner and eight other witnesses testified.

I. FACTUAL BACKGROUND

A. The Petitioner

The Petitioner was born in New Bedford, Massachusetts, and is 45 years old. (Exhs. 1:1; 11:1) He was graduated from Ithaca College in 1974 and from Western New England School of Law with a J.D. in 1978. (Tr. 110) The Petitioner was admitted to the bar of the Commonwealth on December 15, 1978.2

The Petitioner practiced law in the office of Irving Sheff for about one year, in 1978 (Tr. 24), and then began a practice with David Prince under the name of Prince & Cooperstein. (Tr. 73) The Petitioner handled divorces, bankruptcies, simple wills, and real estate matters at a "low cost." (Tr. 73)

The Petitioner's practice expanded to include "trademark licensing and enforcement litigation for rock and roll people. . ." (Tr. 74) He also began concentrating in real estate.

B. Events giving rise to Petitioner's indefinite suspension from the practice of law

By the mid-1980's, the Petitioner's practice had centered on handling the affairs of Edward Desmond. (Tr. 74) In about 1985, the Petitioner suggested to Desmond that he be employed as Desmond's in-house counsel. (Tr. 75, 111). Until about 1987, the Petitioner was so employed by a Desmond-controlled entity named Carlyle-Omni Realty Investors, Inc. The Petitioner handled two major condominium conversion projects and three to four subdivisions in addition to representing Carlyle-Omni in the purchase of a parcel of land in Harvard, Massachusetts, from Ruth Erickson. (Tr. 77)

In about January 1987, Carlyle-Omni, through its employee Sohiel Omar, and Erickson agreed that Carlyle-Omni would purchase the Harvard land for $850,000.00. In May 1987, a purchase and sale agreement negotiated by the Petitioner and Erickson's lawyers was drawn up for that amount. (Exh. 2:15) Also in May 1987, the Petitioner drafted documents creating the Wake Realty Trust with Sharen Oxman as trustee. Wake Realty Trust and Oxman, who was Omar's girlfriend, were straws for Desmond. (Exh. 2:16) Desmond applied for a loan from the Capital Bank & Trust Co. for the Harvard parcel along with some other parcels. Capital Bank & Trust lent 100% of the value of the property. The Petitioner drafted purchase and sale agreements and other documents purporting to show that the Harvard property was being purchased for $1.88 million when the true purchase price was $850,000. (Exh. 2:16-18), (Tr. 77). The Petitioner also gave false information to closing counsel resulting in the creation of two deeds, one showing a transfer of $850,000 and the other showing the fraudulent transfer of $1,880,000. (Exh. 2:18)

In addition to assisting Desmond in the "land flip" involving the Harvard property, the Petitioner also handled the sale of some thirty condominium units involving -^undisclosed second mortgages. (Tr. 81) . The Petitioner was not charged with this misconduct as part of his plea agreement with the government. (Tr. 81),(Exh. 1:3)

In 1987, the Petitioner left Desmond's employment to return to a solo practice. (Tr. 83) He continued to represent Desmond until at least 1989 in a couple of lawsuits, and he had a business interest with Desmond and another client and friend named Jacques Sultan in a parcel of land located in Cambridge, Massachusetts. (Tr. 112) From about January 1989 to July 1991, the Petitioner represented an individual named Artemis Joukowsky III, to whom he was introduced by Sultan. (Tr. 83, 113). Joukowsky had several business enterprises, chief among them being Highland Financial Group (HFG) and HFG Expansion Fund. HFG was the general partner of HFG Expansion Fund, a venture capital limited partnership formed for the purpose of raising money to invest in so-called "portfolio" companies "seeded" by HFG. (Tr. 123-124) The respondent initially represented Joukowsky in a few transactions, but the professional relationship expanded to include both legal and business advice. (Tr. 90)

One of HFG's portfolio companies was Cambridge Design Partners, which involved an investment in real estate contiguous to the parcel owned by the Petitioner, Sultan, and Desmond. (Tr. 125) The respondent represented Joukowsky in this investment. Although the Petitioner maintains that he informed Joukowsky of his interest in the adjoining parcel", Joukowsky asserts that the Petitioner did not disclose that interest until later in the representation. (Tr. 112) The Petitioner represented the various Joukowsky enterprises as well as the portfolio companies without appreciating the conflicts of interest among them, including the conflicts created by representing both the lender and the borrower in the transactions involving the Joukowsky interests and the portfolio companies. (Tr. 92, 93, 125)

At some point, Joukowsky met an individual named Peter Knollenberg, the principal of Greater New England, Inc. (GNE). Joukowsky and Knollenberg decided to form a partnership comprised of the portfolio companies owned by HFG and land purportedly owned by Knollenberg. The Petitioner undertook to represent the partnership, to be known as GNE/H and Alterra Financial Group, and Joukowsky's interests, again without appreciating that he could not represent the interests of each adequately. (Tr. 93) In addition, the Petitioner sought an equity interest in the new entity being created by Knollenberg and Joukowsky, and he served as an interim CEO for HFG and Alterra, again without recognizing the irreconcilable conflicts of interest created by his numerous roles and his financial interest in the new venture. (Tr. 127) Although it was arguably his responsibility to do so, the Petitioner never actually formed the proposed partnership. (Tr. 128) In addition, the Petitioner never appreciated that Knollenberg had failed to transfer his property to any partnership £>r entity in which Joukowsky had a cognizable interest, although Joukowsky, on the Petitioner's instructions, transferred all of the portfolio companies to the alleged partnership. (Tr. 127-128). The Petitioner acknowledged that he was both incompetent and negligent in protecting Joukowsky's interests in these matters. (Tr. 93-94)

In July 1991, the Petitioner was arrested on Federal charges of bank fraud and making false statements to Capital Bank arising from his conduct in the Harvard transaction. (Tr. 113) , (Exh. 1:1) . He then resigned or was discharged by Joukowsky.

Around this time, a dispute arose between Joukowsky and Knollenberg over a portfolio company called Coastland, which "owned a process that could eat wasteD" and produce "an organic product." (Tr. 129). Joukowsky had provided the financing for the acquisition, but Knollenberg asserted control despite his failure to put up any equity. (Tr. 128-129) The ensuing lawsuit between Knollenberg and Joukowsky gave rise to Joukowsky's lawsuit against the Petitioner in 1994. (Tr. 115, 130) The lawsuit against the Petitioner eventually settled for $575,000 paid to Joukowsky.3 (Tr. 88-89)

Joukowsky, the Petitioner, and Sultan had enrolled (although not at the same time) in a course called Ontological Design Course (O.D.C.), which taught the "language theory" of Dr. Fernando Flores. Flores had developed a theory "that what human beings do is create their realities in language. What we do as an animal is language. That's how we come together." (Tr. 84) Language, according to Dr. Flores, can be divided into the components of "promises, requests, de[clarations], assertions, and assessments." (Tr. 84) The Petitioner acknowledged that the language theories of Dr. Flores might have interfered with the Petitioner's ability to communicate to Joukowsky the nature of the conflicts that the Petitioner faced as lawyer for Joukowsky, lawyer for the lender and borrower entities, and lawyer for the general and limited partners as well as the conflicts created by the Petitioner's functioning simultaneously as lawyer, business advisor, potential investor, and chief executive officer for the various business enterprises. Exhibits 20 and 30 provided examples of the murky nature of the Petitioner's and Joukowsky's communications. In Exhibit 29, dated April 29, 1991, Joukowsky complained:

...[W]hat I see missing in this communication and in working with you over the past three weeks is that in the domain of working as the CEO you are working for me, as the chairman and majority owner and in the domain of employee and worker, I am working for you.

I have a sense from this communication that authority for you is an absolute thing but a series of conversations that make up the management of the company.

In saying that you say you make an accusation that I have not been. . .sincere in the domain of authority and clear working lines of communications. Sincerity remember is a commitment to withhold and conceal private conversations and not make them public, while making other conversations public that do not disclose real concerns.

The respondent replied later that day as follows:

I am understanding that you would be..upset by the level of my private conversations. And I have never confronted you with them as such with any number of stories, your not being open, me trying to be your lawyer, etc. . .but in the context of our new relationship conversation I cannot, will not and have not kept them private and I sense that you are open to being open to listening to these assessments in a way that you have not been before.

I like to think that I an not authoritarian with my authority and I am aware that at times I have been and will be authoritarian with you. I think it is in the nature of working out a new and unusual situation and it is a personal dance that we have to be in by the nature of the company that we are, the history that you have been, and the future that we are as a company...1 live in the conversation that authority generally relates to competence and yet as CEO I am the holder of all the promises thus I may exercise authority without com[p]etence at times."

(Exh. 30)

On April 1, 1993, the Petitioner appeared in United States District Court for the District of Massachusetts to enter a plea under North Carolina v. Alford, 400 U.S. 25 (1970), to one count of making false statements to a federally insured bank. (Exh. 2:23) . The Petitioner did not admit his guilt at the plea change on the advice of counsel, although he acknowledged his criminal conduct at the reinstatement hearing. (Tr. 148) The Petitioner was sentenced on June 8, 1993, to one year of probation, with three months to be served in home confinement, 200 hours of community service, and a fine of $25,000. (Exh. 3) The Petitioner has paid his fine, and he performed the community service at the Milton Food Pantry. (Tr. 80) Since completing his community service, the Petitioner has contributed $30 per month to the food pantry.

II. FINDINGS AS TO THE REINSTATEMENT PETITION

A. The Standard for Reinstatement

To sustain his burden of proof for reinstatement following suspension from practice, Petitioner must affirmatively demonstrate that (I) he has the moral qualifications required for the admission to practice law; (2) he has the competency and learning in law required for admission; and (3) his resumption of practice will not be detrimental to the integrity or standing of the bar, and administration of justice, or the public interest. S.J.C. Rule 3:01, § 1.3, 4:01 Section 18(5). Matter of Cappiello, 662 N.E. 2d 268, 416 Mass. 340, 9 Mass. Att't Disc. R. 47 (1993); Matter of Waitz, 621 N.E. 2d 1166, 416 Mass. 298 (1993). The factors to be considered include: (1) the nature of the original offense, (2) the lawyer's character, maturity and experience at the time of the original-ioffense, (3) the lawyer's occupation and conduct in the time since his suspension, (4) the time lapse since suspension and (5) the lawyer's present competence in legal skills. S.J. C. Rule 4:01, § 18(5), Matter of Prager, 661 N.E. 2d 84, 422 Mass. 86 (1996); Cappiello, supra.; Matter of Gordon, 429 N.E. 2d 1150, 385 Mass. 48 (1982) . In evaluating a petition for reinstatement, the true test must always be the public welfare. Matter of Waitz, supra.

At the reinstatement hearing, there was testimony from Judith Ginns (a long time friend of the Petitioner and his wife) ; James Baranowski (a neighbor of the Petitioner for 13 years); Attorney Samuel Greydanus (worked with Petitioner early on in his career and employed him as a paralegal after his suspension); Gary Goldfarb (employed Petitioner after his suspension); Michael Tate (worked with Petitioner at New England Stereo); Tom Marx (friend of Petitioner through O.D.C.); and the Petitioner himself. The Panel also has as exhibits documents from the criminal matter (Exhibits 1-3), the record from the prior discipline, the Petitioner's Reinstatement Questionnaire, as well as numerous letters attesting to the Petitioner's character and present fitness to practice law from former colleagues, friends and former clients, all of whom support Petitioner's reinstatement.

1. Moral Qualifications

The first part of the three prong test for reinstatement is that Petitioner demonstrate that he has the moral qualifications required of a member of the bar. The evidence included the undisputed testimony of Attorney Greydanus, the witnesses mentioned above, and the Petitioner, as well as the many letters of support for the Petitioner's reinstatement from friends and colleagues, former clients, Rabbi Jerome Weistrop, and Alan G. Rosmarin, M.D., all of whom express their view that, except for the events giving rise to the suspension, the Petitioner has always been a person of high moral caliber, integrity and honesty.

From 1997, to the present, the Petitioner has been the director of business development for New England Stereo, Inc. Gary Goldfarb, a principal of New England Stereo, employed the Petitioner to organize a multi-million-dollar promotion throughout New England Stereo, which the Petitioner handled with great success. (Tr. 33-34) Goldfarb expressed the greatest confidence in the Petitioner's integrity and competence despite the Petitioner's conviction. Michael Tate, the CEO of New England Stereo, observed that the Petitioner had developed his listening skills and was considerably less abrasive and arrogant than before his conviction. Tate also trusted the Petitioner and held him in high esteem. (Tr. 44)

The Petitioner is married and is the father of two boys. He is active in his temple and in the neighborhood. The Petitioner went out of his way to include an elderly neighbor in outings and to perform needed services for the neighbor.

The Petitioner serves as a volunteer director on the board of directors of the Partnership Foundation, desc-ribed as an "offshoot of Lew Epstein's Men's and Women's Clubs." (Tr. 50) The tenets of the Partnership Foundation are learning to speak and listen with "compassion", creating "intimacy" in personal relationships, and "honoring commitments." (Tr. 51) The Petitioner was instrumental in the publication of "Trusting You Are Loved" , a book by Epstein which "provides a road map for mastering... ten Practices for Partnership..." (Exh. 27) Tom Marx, a mentor and business associate of the Petitioner, observed that the Petitioner now understands that it is "critically important" to honor his commitments to his family and to "his Bar Association." (Tr. 53)

2. Competency and learning in the Law

After his suspension, the Petitioner attended a certificate program at Cornell University in dispute resolution in 1995 and 1996. (Exh. 11:2), (Tr. 96) On November 13, 1998, the Petitioner took and passed the Multistate Professional Responsibility Examination (MPRE). (Exh. 12),(Tr. 95) He has also taken courses in zoning, business lawyering, landlord-tenant law, estate planning, protecting assets from creditors, venture capital financing, and the new Massachusetts Rules of Professional Conduct. (Tr. 95-96, 132) The Petitioner subscribes to Lawyers Weekly, and, since September 1998, by permission of the Court, he has worked about 27 days as a paralegal in the law office of Samuel Greydanus, doing title rundowns, getting discharges, drafting interrogatory responses in tort cases, and doing research. (Tr. 28), (Exh. 9) The Petitioner is willing to accept as a condition of his reinstatement that he attend ethics courses each year. (Tr. 98)

The Petitioner asked for "special leave" to work as a paralegal prior to the conclusion of the five-year minimum term for an indefinite suspension mandated by S.J.C. Rule 4:01, § 18(5). The Petitioner's reasons for going so were partly "financial" and partly that he "wanted to be as involved as I could" with the practice of law. (Tr. 142) The request was denied, and the Petitioner understood that an exception could not be created in his case.

3. Public protection and public perception

Petitioner's present moral qualifications, the leading of an honest life since the incidents leading to suspension, the community acceptance of him as evidenced by the tributes paid to him on the record, the existence of a supportive network of family and friends, full compliance with the suspension order, his competency and learning in the law, the fact that he passed the Multi-State Professional Responsibility Examination, as noted above, all suggest that his reinstatement will not negatively affect the public's perception of the bar nor will it expose the public to any risk.

If he is reinstated, the Petitioner does not plan to be involved in the day-to-day practice of law. (Tr. 109) Instead, he plans to be involved in "a number of ancillary tasks that would be related to the practice of law." The Petitioner plans to work with Scott Hunter, a non-practicing but fuily licensed lawyer from Los Angeles, California. They will provide management consulting designed to introduce the concepts of "compassionate listening" to law firms in order to develop "healthy, more fulfilling" professional relationships. (Tr. 103) In addition, the Petitioner plans to work "with people who have serious legal problems to find the right lawyer for them", taking into account personalities as well as legal skills. (Tr. 108, 136-137) To perform this latter service, the Petitioner will make "some superficial analyses" of legal issues which would require a law license. (Tr. 131) The Petitioner understands that he cannot split fees with the lawyers to whom he refers clients and plans to charge only the clients for this service. (Tr. 138) The Petitioner had not considered how he might advertise this service or whether it might run afoul of other prohibitions in the rules of professional conduct. (Tr. 138) He is agreeable to having his business monitored by Bar Counsel on a periodic basis to determine whether it complies with the Massachusetts Rules of Professional Conduct. (Tr. 145)

The Petitioner's resumption of the practice of law will not be detrimental to the integrity and standing of the bar, the administration of justice, and the public interest so long as certain precepts are observed. The Petitioner's participation in self-improvement courses is laudable, but the concepts learned in these courses do not always satisfy the obligations a lawyer owes a client. The Petitioner's plan to match clients to lawyers based on "personality fit" as well as knowledge could confuse clients as to the nature of the Petitioner's actual services, thus creating problems similar to those that have plagued the Petitioner in his professional career. The Petitioner will therefore have to be absolutely clear in describing the services he plans to provide to prospective clients and the fees charged for those services. His advertising cannot state or imply that he is an authorized referral service, and the Petitioner will not be able to advertise that he has any special expertise in providing referrals, unless that claim is true and verifiable. The Petitioner will also have to avoid any conflict of interest in choosing lawyers to whom he makes referrals. For these reasons, it is recommended that the Petitioner engage in at least six hours of CLE training in professional responsibility annually and submit to Bar Counsel every six months for two years following reinstatement a detailed description of the nature of his practice, copies of all advertising and solicitation letters, proof of attendance at CLE programs relating to professional responsibility, and a representative sample of the referral services provided to clients and fees charged over the previous six months. At Bar Counsel's request, the Petitioner will also be required to meet with Bar Counsel to discuss his report and to produce any other information Bar Counsel deems necessary to insure the Petitioner's compliance with the order of reinstatement and the rules of professional conduct.

III. CONCLUSION AND REQUESTED RECOMMENDATION

In this case, based upon the testimony and other evidence in the record, the Hearing Panel concludes that the Petitioner does have the present moral qualifications and competency in legal skills such that his readmission to the practice of law will not be detrimental to the integrity or standing of the bar, the administration of justice or the public interest.

Accordingly, the Panel recommends that the Petition be allowed, subject to the following conditions:

1. that the Petitioner be required to attend at least six hours of CLE courses annually on professional responsibility and provide proof of attendance to Bar Counsel;

2. submit to Bar Counsel every six months for two years following reinstatement a detailed description of the nature of his practice, copies of all advertising and solicitation letters, and a representative sample of the referral services provided to clients and fees charged over the previous six months;

3. at Bar Counsel's request, the Petitioner will be required to meet with Bar Counsel to discuss numbers one and two above and to produce any other information Bar Counsel deems necessary to insure the Petitioner's compliance with the order of reinstatement and the rules of professional conduct.

Steven P. Sabra, Chair
Cynthia J. Cohen
Naomi Gordon

FOOTNOTES:

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

2 The dates proposed are taken from the registration division of the Board of Bar Overseers and the petitioner's application for admission to the bar provided to the Supreme Judicial Court. The petitioner's testimony that he was graduated from law school in 1976 (Tr. 74) conflicts with his answer to question 3 on the questionnaire that he graduated from Ithaca College in 1976 and from Western New England School of Law in 1979. (Exh. 11:2) None of the dates provided by the petitioner can be correct given his admission in 1978 and his testimony that he was immediately admitted to the bar following graduation from law school. (Tr. 110)

3The petitioner filed a motion to work as a paralegal prior to his petitioning for reinstatement. In connection with that motion, he provided to Bar Counsel, at Bar Counsel's request, a completed questionnaire used in reinstatement proceedings. The petitioner listed the lawsuit filed against him by Joukowsky, but he reported it as "dismissed with prejudice," without indicating that the case had been dismissed with prejudice by agreement of the parties after payment to the plaintiff of $575,000. (Tr. 116) The information contrasted with the description the petitioner provided about another lawsuit filed against him during the period of the indefinite suspension. As to that matter, Cambridge One Realty Trust v. D'Agostine, the petitioner explained that the case had been dismissed with prejudice and settled in the petitioner's favor. (Tr. 116) . Bar Counsel advised the petitioner that the description of the Joukowsky case was misleading. When the petitioner filed another questionnaire in connection with his petition for reinstatement, the petitioner characterized the resolution of the Joukowsky suit as "Settled and Dismissed with Prejudice." (Exh. 11:5) Petitioner testified that he made full disclosure to counsel who formulated the response on the petition and that he did not intend to hide any information.



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