Case Number(s): 10-C-02624
In the Matter of: ALLEN JEFFREY GROSS, Bar # 141082, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Sue K. Hong, Bar #285852,
Counsel for Respondent: Allen Jeffrey Gross, Bar #141082,
Submitted to: Assigned Judge.
Filed: October 10, 2013.
<<not>> checked. PREVIOUS STIPULATION REJECTED
Note: All information required by this form and any additional information which cannot be provided in the space provided, must be set forth in an attachment to this stipulation under specific headings, e.g., "Facts," "Dismissals," "Conclusions of Law," "Supporting Authority," etc.
1. Respondent is a member of the State Bar of California, admitted June 14, 1989.
2. The parties agree to be bound by the factual stipulations contained herein even if conclusions of law or disposition are rejected or changed by the Supreme Court.
3. All investigations or proceedings listed by case number in the caption of this stipulation are entirely resolved by this stipulation and are deemed consolidated. Dismissed charge(s)/count(s) are listed under "Dismissals." The stipulation consists of 11 pages, not including the order.
4. A statement of acts or omissions acknowledged by Respondent as cause or causes for discipline is included under "Facts."
5. Conclusions of law, drawn from and specifically referring to the facts are also included under "Conclusions of Law".
6. The parties must include supporting authority for the recommended level of discipline under the heading "Supporting Authority."
7. No more than 30 days prior to the filing of this stipulation, Respondent has been advised in writing of any pending investigation/proceeding not resolved by this stipulation, except for criminal investigations.
8. Payment of Disciplinary Costs-Respondent acknowledges the provisions of Bus. & Prof. Code §§6086.10 & 6140.7. (Check one option only):
<<not>> checked. Until costs are paid in full, Respondent will remain actually suspended from the practice of law unless relief is obtained per rule 5.130, Rules of Procedure.
checked. Costs are to be paid in equal amounts prior to February 1 for the following membership years: three (3) billing cycles following the effective date of the Supreme Court order. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.) If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
<<not>> checked. Costs are waived in part as set forth in a separate attachment entitled "Partial Waiver of Costs".
<<not>> checked. Costs are entirely waived.
Attachment language (if any):.
ATTACHMENT TO
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION
IN THE MATTER OF: ALLEN JEFFREY GROSS, State Bar No. 141082
STATE BAR COURT CASE NUMBER: 10-C-02624
FACTS AND CONCLUSIONS OF LAW.
Respondent admits that the following facts are true and that the facts and circumstances surrounding the offense for which he was convicted involved other misconduct warranting discipline.
Case No. 10-C-02624 (Conviction Proceedings)
PROCEDURAL BACKGROUND IN CONVICTION PROCEEDING:
1. This is a proceeding pursuant to sections 6101 and 6102 of the Business and Professions Code and rule 9.10 of the California Rules of Court.
2. On December 28, 2009, the Superior Court of California, County of Los Angeles issued an Arrest Warrant on a felony complaint for the Respondent on five counts of violating Revenue and Tax Code Section 19706, failure to file income tax returns.
3. Respondent was arrested on January 28, 2010.
4. On March 6, 2012, Respondent was arraigned on the five counts of 19706 of the California Revenue & Taxation code, by the Superior Court of California, County of Los Angeles.
5. On September 25, 2012 Respondent pled guilty to and was convicted of five misdemeanor counts of violating section 19701 of the California Revenue & Taxation code, by the Superior Court of California, County of Los Angeles.
6. Respondent was sentenced to 3 years of summary probation, 10 days in county jail (Respondent was given total credit for 10 days in custody, 5 days of actual custody and 5 days of good time/work time), 500 hours of community service, and ordered to pay restitution of $171,103 in taxes, and $33,932 in investigation costs. Respondent agreed to extending probation an additional 3 years if these amounts are not paid by the end of the original three year probation period.
7. On May 3, 2013, the Review Department of the State Bar Court issued an order referring the matter to the Hearing Department for a hearing and decision recommending the discipline to be imposed in the event that the Hearing Department finds that the facts and circumstances surrounding the offense(s) for which Respondent was convicted involved moral turpitude or other misconduct warranting discipline.
FACTS:
8. The Respondent filed tax returns for tax years 2003-2007, inclusively, in the form of a K-1 (100S) a Professional corporation, Shareholder’s Share of Income; however, he failed to file and pay his individual California Resident Income Tax Returns for tax years 2003-2007.
9. On May 3, 2010, Respondent filed his individual tax returns for tax years 2003-2007.
10. The Franchise Tax Board calculated restitution owed on the 2003-2007 California Resident Individual Income Tax Return based on the individual returns filed on May 3, 2010, as $171,103 in total, in addition to penalties, taxes, and interest.
CONCLUSIONS OF LAW:
11. The facts and circumstances surrounding Respondent’s misdemeanor convictions for a violations of the California Revenue & Taxation Code, Section 19701 (failure to file CA Resident Income Tax Returns for tax years 2003, 2004, 2005, 2006, and 2007) did not involve moral turpitude but did involve other misconduct warranting discipline.
ADDITIONAL FACTS RE AGGRAVATING CIRCUMSTANCES.
Multiple Acts (Std. 1.2(b)(ii)): Respondent failed to timely file his resident income tax return for 5 years (2003-2007).
ADDITIONAL FACTS RE MITIGATING CIRCUMSTANCES.
No Prior Record of Discipline: Although Respondent’s misconduct is serious, he is entitled to mitigation for having practiced law for approximately 14 years without discipline. (In the Matter of Riordan (Review Dept. 2007) 5 Cal. State Bar Ct. Rptr. 41, 49.) Pretrial Stipulation: Respondent has entered into a Stipulation with the State Bar prior to trial, thereby saving the State Bar Court time and resources. (Silva-Vidor v. State Bar (1989) 49 Cal.3d 1071, 1079 [where mitigative credit was given for entering into a stipulation as to facts and culpability].)
AUTHORITIES SUPPORTING DISCIPLINE.
The Standards for Attorney Sanctions for Professional Misconduct provide a "process of fixing discipline" pursuant to a set of written principles to "better discharge the purposes of attorney discipline as announced by the Supreme Court." (Rules Proc. of State Bar, tit. IV, Stds. for Atty. Sanctions for Prof. Misconduct, Introduction (all further references to standards are to this source).) The primary purposes of disciplinary proceedings and of the sanctions imposed are "the protection of the public, the courts and the legal profession; the maintenance of high professional standards by attorneys and the preservation of public confidence in the legal profession." (ln re Morse (1995) 11 Cal.4th 184, 205; std. 1.3.)
Although not binding, the standards are entitled to "great weight" and should be followed "whenever possible" in determining level of discipline. (In re Silverton (2005) 36 Cal.4th 81, 92, quoting In re Brown (1995) 12 Cal.4th 205, 220 and In re Young (1989) 49 Cal.3d 257, 267, fn. 11.) Adherence to the standards in the great majority of cases serves the valuable purpose of eliminating disparity and assuring consistency, that is, the imposition of similar attorney discipline for instances of similar attorney misconduct. (In re Naney (1990) 51 Cal.3d 186, 190.) Any discipline recommendation different from that set forth in the applicable standards should clearly explain the reasons for the deviation. (Blair v. State Bar (1989) 49 Cal.3d 762, 776, fn. 5.)
Respondent’s conviction and the surrounding facts and circumstances evidence the commission of several acts of professional misconduct, namely, his multiple failures to file his personal income tax returns. As discussed below, the convictions do not involve moral turpitude but do involve other misconduct warranting discipline. (See In re Rohan (1978) 21 Cal.3d 195, 200 [the conviction of a willful failure to file a federal income tax return "does not establish, on the face thereof, the involvement of moral turpitude" and, if moral turpitude is to be established, it must be based on special circumstances, such as a misrepresentation or falsification of facts in records submitted to the IRS or evidence that an attorney sought to achieve any personal financial gain by not filing his tax returns, which are not necessarily present whenever the offense is committed.]) Here, there is no evidence to suggest Respondent failed to file his income tax returns to achieve personal financial gain or falsified any of the records submitted to the IRS. As such the standard implicated by Respondent’s conviction is standard 3.4.
Standard 3.4 provides that a final conviction of a member which does not involve moral turpitude, but does involve other misconduct warranting discipline shall result in a sanction as prescribed under part B of the Standards. The applicable standard under part B is standard 2.6, which provides that culpability "...of a member of a violation of any of the following provisions of the Business and Professions Code shall result in disbarment or suspension depending on the gravity of the offense or the harm, if any, to the victim, with due regard to the purposes of imposing discipline set forth in standard 1.3.
Although there is no client victim in this matter, the gravity of the offense here, the multiple failures to file income tax returns, is serious misconduct by a lawyer who is sworn to uphold the law. Further, discipline for Respondent’s misconduct is consistent with the purposes of imposing discipline, namely, protection of the public, maintenance of high professional standards and the preservation of public confidence in the legal profession. In Rohan, supra, the Supreme Court discussed a similar offense and stated "Governments cannot operate effectively unless their revenue laws are obeyed. Such a violation of the tax laws by an attorney is a matter of serious concern because the attorney necessarily must advise clients with respect to their compliance with such laws. Furthermore, the legal profession is one which is peculiarly charged with the administration of our laws and therefore it is incumbent upon lawyers to set an example for others in observing the law. The intentional failure to file income tax returns evinces an attitude on the part of the attorney of placing himself above the law." (Rohan, at p. 203.) Due to the substantial amount of funds involved, $171,103 in taxes, and $33,932 in investigation costs, and the lengthy time period over which the misconduct occurred, the gravity of the misconduct is significant. Thus, considering all of the surrounding facts and circumstances involved here including Respondent’s mitigation of no prior disciplinary history, a two-year stayed suspension and a two-year probation with conditions including a 90 day actual suspension, is an appropriate level of discipline to effectuate the primary purposes of attorney discipline under standard 1.3, namely "the protection of the public, the courts and the legal profession; the maintenance of high legal professional standards by attorneys and the preservation of public confidence in the legal profession."
Case law supports this result. For example, in In re Brown (1995) 12 Cal.4th 205 [Brown was convicted of three misdemeanor counts of failing to remit to the state certain funds withheld from his employee’s wages totaling $36,000 to the state and Brown received two years of stayed suspension and 60 days of actual suspension] and in In re Grimes (1990) 51 Cal.3d 199 [Grimes received two years of suspension, stayed, with two years of probation on conditions including 60 days of actual suspension, where he was convicted of three counts of willfully failing to file a tax return in violation of Revenue and Tax Code section 19401.]. Respondent’s misconduct involved more serious misconduct, in that he failed to file taxes for more years than in either Brown and Grimes, and the dollar amount at issue was much greater.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed respondent that as of September 10, 2013, the prosecution costs in this matter are $2,392. Respondent further acknowledges that should this stipulation be rejected or should relief from the stipulation be granted, the costs in this matter may increase due to the cost of further proceedings.
EXCLUSION FROM MCLE CREDIT
Pursuant to rule 3201, Respondent may not receive MCLE credit for completion of State Bar Ethics School and/or any other educational course(s) to be ordered as a condition of suspension. (Rules Proc. of State Bar, rule 3201.)
SIGNATURE OF THE PARTIES
Case Number(s): 10-C-02624
In the Matter of: Allen Jeffrey Gross
By their signatures below, the parties and their counsel, as applicable, signify their agreement with each of the recitation and each of the terms and conditions of this Stipulation Re Facts, Conclusions of Law and Disposition.
Signed by:
Respondent: Allen Jeffrey Gross
Date: 9/12/13
Respondent’s Counsel:
Date:
Deputy Trial Counsel: Sue Hong
Date: 9/12/13
ACTUAL SUSPENSION ORDER
Case Number(s): 10-C-02624
In the Matter of: ALLEN JEFFREY GROSS
Finding the stipulation to be fair to the parties and that it adequately protects the public, IT IS ORDERED that the requested dismissal of counts/charges, if any is GRANTED without prejudice, and:
<<not>> checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
checked. The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
<<not>> checked. All Hearing dates are vacated.
On page 9 of the stipulation, in the second full paragraph, in the second to the last line,
the acronym "IRS" is DELETED and the name "Franchise Tax Board" is INSERTED
in its place.
The parties are bound by the stipulation as approved unless: 1) a motion to withdraw or modify the stipulation, filed within 15 days after service of this order, is granted; or 2) this court modifies or further modifies the approved stipulation. (See rule 5.58 (E) & (F), Rules of Procedure.) The effective date of this disposition is the effective date of the Supreme Court order herein, normally 30 days after the file date. (See rule 9.18(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: Richard A. Honn
Date: 10/8/13
CERTIFICATE OF SERVICE
[Rules Proc. of State Bar; Rule 5.27(B); Code Civ. Proc., § 1013a(4)]
I am a Case Administrator of the State Bar Court of California. I am over the age of eighteen and not a party to the within proceeding. Pursuant to standard court practice, in the City and County of Los Angeles, on October 10, 2013, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND
ORDER APPROVING
in a sealed envelope for collection and mailing on that date as follows:
checked. by first-class mail, with postage thereon fully prepaid, through the United States Postal Service at Los Angeles, California, addressed as follows:
ALLEN J. GROSS
1265 CALLE DE SEVILLA
PACIFIC PALISADES, CA 90272
<<not>> checked. by certified mail, No. , with return receipt requested, through the United States Postal Service at , California, addressed as follows:
<<not>> checked. by overnight mail at , California, addressed as follows:
<<not>> checked. by fax transmission, at fax number . No error was reported by the fax machine that I used.
<<not>> checked. By personal service by leaving the documents in a sealed envelope or package clearly labeled to identify the attorney being served with a receptionist or a person having charge of the attorney’s office, addressed as follows:
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
Sue K. Hong, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on October 10, 2013.
Signed by:
Julieta Gonzales
Case Administrator
State Bar Court