November 2008

These notices of imposition of disciplinary sanctions and actions are published pursuant to Rule 3.5(d) of the Washington State Supreme Court Rules for Enforcement of Lawyer Conduct, and pursuant to the February 18, 1995, policy statement of the WSBA Board of Governors. For a complete copy of any disciplinary decision, call the Washington State Disciplinary Board at 206-733-5926, leaving the case name, and your name and address.

Note: Approximately 30,000 persons are eligible to practice law in Washington state. Some of them share the same or similar names. Bar News strives to include a clarification whenever an attorney listed in the Disciplinary Notices has the same name as another WSBA member; however, all discipline reports should be read carefully for names, cities, and bar numbers.

Disbarred

Tolan S. Furusho (WSBA No. 25055, admitted 1995), of Bellevue, was disbarred, effective August 22, 2008, by order of the Washington State Supreme Court following approval of a stipulation. This discipline is based on conduct involving the commission of a criminal act, making false statements to third persons, and engaging in conduct involving deceit or misrepresentation.

Mr. Furusho was the registered agent for a corporation which owned the majority of outstanding shares of stock of another corporation (Corporation E). Corporation E was a publicly traded Washington corporation based in Salt Lake City, Utah, purporting to be a developmental stage company that was in the business of developing coal mining properties in Wyoming. During all material times, Mr. Furusho's legal practice focused in part on securities law. As part of his practice, Mr. Furusho was familiar with securities laws governing restricted stock, exemptions from registration, freely tradable stock, restrictive legends, and opinion letters regarding exemptions from registration requirements. Mr. Furusho agreed to provide an attorney opinion letter to a co-conspirator (Ms. K) for Corporation E stating that the stock of Corporation E complied with an exemption from federal securities registration requirement. On May 9, 2006, Mr. Furusho signed an opinion letter drafted by Ms. K and sent it interstate via facsimile to Corporation E's transfer agent. Mr. Furusho knew the transfer agent would rely on the representations in his opinion letter to re-issue restricted shares of Corporation E's stock as freely tradable stock. The opinion letter falsely stated that:

• The transfer agent could remove the restrictive legends on the shares of Corporation E stock that had been issued to co-conspirators because the stock met an exemption from registration.
• Mr. Furusho had been furnished with, and had examined, "all such records of the Company, agreements and other instruments, certificates of officers and representatives of the Company, certificates of public officials, and other documents…deemed…necessary…as a basis for the opinions."
• Mr. Furusho had reviewed "documents and representation letters provided by the Shareholder and the broker involved in this transaction."

Mr. Furusho knew at the time he signed the letter that the statements were false.

On or about May 9, 2006, Mr. Furusho and other co-conspirators, pursuant to Mr. Furusho's opinion letter, caused Corporation E's transfer agent to issue 17,390,000 freely tradable shares of Corporation E stock. Between June 7, 2006, and June 8, 2006, Mr. Furusho, by virtue of having issued his opinion letter, and other co-conspirators caused 487,000 freely tradable shares of Corporation E stock to be sold for a total of approximately $88,326. Respondent's actions as described above violated Title 15 United States Code Section 78j(b) (15 U.S.C. § 78j(b)), 15 U.S.C. § 78ff(a), and Title 17 Code of Federal Regulations Section 240.10(b)-5 (17 CFR § 240.10(b)-5), and 18 U.S.C. § 371.

During the 2004 tax year, Mr. Furusho received gross income of approximately $146,000. During the 2005 tax year, Mr. Furusho received gross income of approximately $37,000. Mr. Furusho's income during the tax years 2004 and 2005 was substantially in excess of the minimum filing requirements and required Mr. Furusho by law to file an income tax return. Mr. Furusho failed to file income tax returns for the tax years 2004 and 2005 in violation of 26 U.S.C. § 7203, which resulted in tax liability in the amount of $36,600. On November 28, 2007, Mr. Furusho pleaded guilty in U.S. District Court to violating of 15 U.S.C. § 78j(b), 3 15 U.S.C. § 78ff(a), 17 CFR 240.10(b)-5, 18 U.S.C. § 371, and 26 U.S.C. § 7203. On December 13, 2007, U.S. District Court entered an acceptance of Plea of Guilty, Adjudication of Guilt and Notice of Sentencing accepting Mr. Furusho's plea of guilty.

Mr. Furusho's conduct violated RPC 4.1(a), prohibiting a lawyer in the course of representing a client from knowingly making a false statement of material fact or law to a third person; RPC 8.4(b), prohibiting a lawyer from committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; and RPC 8.4(i), prohibiting a lawyer from committing any act involving moral turpitude, or another act which reflects disregard for the rule of law.

Jonathan H. Burke represented the Bar Association. Mr. Furusho represented himself.

Suspended

Jeffrey R. Bivens (WSBA No. 34100, admitted 2003), of Vancouver, Washington, was suspended for 18 months, effective August 21, 2008, by order of the Washington State Supreme Court following approval of a stipulation. This discipline is based on conduct in two matters involving charging unreasonable fees, conflicts of interest, failure to preserve the identity of clients' property, and dishonest conduct.

Matter No. 1: Mr. Bivens was hired by a client on April 28, 2004, to evict a woman from the client's estranged husband's house after the husband committed suicide. At the time, Mr. Bivens worked full-time as an associate for a law firm (the firm). The client paid the firm two advance fee deposits that totaled $1,550. The firm deposited the client's advance fee deposits in its trust account and debited against the funds for fees and costs until the funds were exhausted. Because the house was the separate property of the client's husband, the husband's estate needed to be admitted to probate and the client appointed personal administrator before she had the power to evict the tenant. Mr. Bivens filed a petition to have letters of administration of the husband's estate issued to the client, which petition was granted on May 11, 2004. Mr. Bivens filed an eviction action on July 15, 2004. The husband's house was vacated three days later and the client assumed control of it. Mr. Bivens used the firm's resources to prepare and file the probate and eviction actions.

When Mr. Bivens was retained, the firearm used by the client's husband to commit suicide was being retained in the Clark County Sheriff's Office evidence room. Mr. Bivens offered to purchase the firearm and credit the value of it to the client's account at the firm in lieu of fees. The client agreed and gave Mr. Bivens a release that allowed him to take possession of the firearm from the Sheriff's Office. Mr. Bivens kept the firearm and attempted, unsuccessfully, to sell it. Mr. Bivens did not credit the value of the firearm to the client's account at the firm and did not pay the client or the firm for the firearm. Mr. Bivens did not arrange for the client to receive any refund of the monies she had already paid the firm.

Matter No. 2: A husband and wife (clients) hired the firm to represent them in pursuing a bankruptcy. Mr. Bivens was assigned to handle the case and represented the clients until he left the firm in June 2005. The clients paid the firm a $900 advance fee deposit on March 14, 2005. The firm deposited this amount in its trust account and debited against it for fees and costs until it was exhausted. The clients did not pay any additional money to the firm and were not billed by the firm for any work in excess of that covered by the $900 advance fee deposit. The clients' home was mortgaged. After their bankruptcy action was filed, the mortgage company moved for relief from the automatic stay. Mr. Bivens replied to this motion on behalf of the clients. He told the clients they owed the firm the $209 filing fee in addition to the $900 they had already paid, and that responding to the motion for relief from stay cost $600 more. Mr. Bivens did not bill the $800 in additional fees to the clients through the firm. The clients told him they were unable to pay the additional fees and, in lieu of the $800, suggested they provide Mr. Bivens items from a pawn shop they owned. Mr. Bivens agreed. On June 7 and 9, 2005, Mr. Bivens took possession of the following items from the pawn shop, with a value totaling $807: a Winchester 1300 12-gauge pump-action shotgun; a Ruger .22 caliber semi-automatic rifle; a block of .22 caliber ammunition; a used gun bag; a DeWalt reciprocal saw; and a fly rod. Bivens did not turn these items over to or pay the firm the value of the items, and he did not credit $807 to the clients' trust ledger.

In both matters, under firm policy, Mr. Bivens was required to turn property that he accepted in lieu of the firm's fees over to the firm or pay the firm the value of the property so it could be credited to the client's account. The firm did not agree that Mr. Bivens could keep the items and not pay the value of them to the firm.

Mr. Bivens's conduct violated RPC 1.5(a), requiring that a lawyer's fee be reasonable; RPC 1.8(a), prohibiting a lawyer who is representing a client in a matter from entering into a business transaction with a client or knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and terms on which the lawyer acquired the interest are fair and reasonable, the client is given a reasonable opportunity to seek the advice of independent counsel, and the client consents; RPC 1.14(b), requiring a lawyer to maintain complete records of all funds, securities, or other properties in the possession of the lawyer and render appropriate accounts to his or her client regarding them; and RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

M. Craig Bray represented the Bar Association. Timothy D. Blue represented Mr. Bivens.

Suspended

Rodney R. Moody (WSBA No. 17416, admitted 1987), of Kirkland, was suspended for 18 months followed by two years' probation, effective August 15, 2008, by order of the Washington State Supreme Court following a stipulated withdrawal of an appeal. This discipline resulted from conduct involving failure to communicate, failure to abide by a client's decisions, and trust account violations.

Matter No. 1: A Bar Association audit of Mr. Moody's trust account for the period of January 1, 2003, to February 29, 2004, and a second audit for the period from March 1, 2004, through August 31, 2006, disclosed a number of problems related to Mr. Moody's handling of his trust account:

• Failure to maintain complete records of all funds in trust;
• Failure to maintain individual client records;
• Actual deposits into Mr. Moody's trust account did not track the purported deposits into trust identified in his "Funds with Running Balances Reports";
• Funds were withdrawn from Mr. Moody's client trust account without substantiating or identifying his entitlement to the funds; and
• Mr. Moody did not reconcile his trust account bank statements with his check register.

Matter No. 2: In June 2002, Mr. Moody agreed to represent a client in a dissolution matter. The client had been arrested and incarcerated following an argument with his wife, and remained incarcerated during the entire dissolution proceeding. While representing the client, Mr. Moody engaged in the following conduct:

• Following a sale of the client's family home, Mr. Moody deposited all or a portion of the client's home sale proceeds into his general business account when the funds had not all been earned.
• Mr. Moody failed to abide by the client's decision to reject the proposed property settlement and go to trial, and instead entered into the final property settlement in the client's dissolution without the client's authorization.

Mr. Moody's conduct violated RPC 1.2(a), requiring a lawyer to abide by a client's decisions concerning the objectives of representation and consult with a client as to the means by which they are to be pursued; RPC 1.4, requiring a lawyer to keep a client reasonably informed about the status of a matter, promptly comply with reasonable requests for information, and explain a matter to the extent reasonably necessary to permit the client to make informed decisions about the representation; former RPC 1.14(a), requiring all funds of clients paid to a lawyer or law firm be deposited into one or more identifiable interest-bearing trust accounts maintained as set forth by the rules and no funds of the lawyer be deposited therein; and former RPC 1.14(b)(3), requiring a lawyer to maintain complete records of all funds, securities, and other properties of a client coming into the possession of a lawyer and render appropriate accounts to his or her client regarding them.

Leslie C. Allen and Debra J. Slater represented the Bar Association. Randy V. Beitel represented the Bar Association on appeal. Mr. Moody represented himself. Mary H. Wechsler was the hearing officer.

Non-Disciplinary Notice

Suspended Pending the Outcome of Disciplinary Proceedings

James K. Naito (WSBA No. 33636, admitted 2003), of Clallam Bay, was suspended pending the outcome of disciplinary proceedings, pursuant to ELC 7.1, effective September 12, 2008, by order of the Washington State Supreme Court. This is not a disciplinary action.