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Commonwealth of Massachusetts

No. BD 99-068


Last known address:
83 Grant Ave.
Belmont, MA 02178


This matter came before the Court, Abrams, J., on an Information and Record of Proceedings and the Vote and Recommendation of the Board of Bar Overseers filed by the Board on September 8, 1999.

Upon consideration thereof, it is ORDERED that NATHAN S. GIBSON is hereby suspended from the practice of law in the Commonwealth of Massachusetts for an indefinite period retroactive to October 2, 1995, the effective date of his temporary suspension.

By the Court, (Abrams, J.)

Entered: September 8, 1999


In 1988, the respondent became employed by University Loan Services, Inc., a corporation founded by his father to service for lenders various student loan programs of the United States Department of Education. Following his father's heart attack in December 1988, the respondent assumed the day-to-day responsibility for ULS. In 1989, the respondent became the executive vice president of the corporation.

DOE entered into contracts with various public and private non-profit entities to act as guarantee agencies for the loans. In the event of default, the guarantee agency would pay the lender and would in turn be reimbursed by the DOE. In Massachusetts, the guarantee agency was the Massachusetts Higher Education Assistance Corporation, also known as MHEAC.

DOE promulgated regulations in effect in 1989 that required lenders to take prescribed collection actions in order to qualify for the federal guarantee. These due diligence actions included making a certain number of telephone calls and writing a certain number of letters within thirty-day periods or "buckets." All contacts had to be documented in detailed reports. When a loan was delinquent for 180 days and the lender had complied with the regulations, the lender was permitted to submit the loan to the guarantee agency for reimbursement. Three or more violations of the due diligence requirements during the 180-day period would disqualify the lender from receiving payment from the guarantee agency.

In October 1989, Touche Ross audited ULS regarding its servicing of loans owned by the New England Educational Loan Marketing Corporation (Nellie Mae), ULS's largest customer. The audit showed that one-third of the loans which were more than thirty days delinquent lacked one or more of the required due diligence collection activities primarily because the required number of telephone calls were not being made. The respondent's father was informed of these findings.

The respondent and his father held a meeting at ULS attended by senior staff of the corporation. The respondent and his father instructed the staff to have ULS employees review the collection histories of each delinquent loan and to falsify records to show that the required collection activity had occurred when omissions in the due diligence were discovered.

From October 1989 to January 1990, senior staff at ULS carried out the directive received from the respondent and his father. Back-dated entries were entered into loan histories and entries were falsified to demonstrate compliance with DOE regulations. The respondent and his father personally participated in falsifying the records. Seventy loans presented by ULS and the successor corporation to MHEAC involved falsified collection histories involving three or more violations of the due diligence requirements that would have disqualified payment of the guarantee on the loan. The amount said on these loans was $196,879.61.

The respondent was temporarily suspended from the practice of law on October 2, 1995, in Matter of Gibson, 11 Mass. Att'y Disc. R. 88. On November 30, 1995, the respondent was convicted in the United States District Court for the District of Massachusetts of seventy counts of filing false statements and claims in violation of 18 U.S.C. Sect. 1001. He was sentenced to concurrent terms of six months of imprisonment followed by two years of supervised probation, with six months to be served in home detention. The respondent's conduct violated Canon One, DR 1-102(A)(4) and (6).

On July 14, 1999, Bar Counsel and the respondent filed a stipulation with the Board of Bar Overseers in which the respondent agreed to the facts and disciplinary rule violations alleged in Bar Counsel's petition for discipline. The parties further agreed that the respondent's conviction of multiple felony counts was a matter in aggravation and that the relatively limited time period in which the offenses occurred was a matter in mitigation. The Board and the Court could also consider that the offenses were charged in seventy counts rather than one conspiracy count at least in part to require the respondent and his father, the co-defendant, to each pay a $3500 special assessment rather than the $50 assessment that would apply to a single count of conspiracy. The parties asked that an indefinite suspension retroactive to October 2, 1995, be recommended to the Court.

On August 9, 1999, the Board of Bar Overseers voted to adopt the stipulation of the parties. An information was filed with the Court, and, on September 8, 1999, the Court ordered that the respondent be indefinitely suspended effective October 2, 1995.

1 Compiled by the Board of Bar Overseers based on the record before the Court.

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