Last week, the Appellate Division of the State of New York in an opinion publicly censured an attorney for running a law office while employed full-time with the New York State Department of Taxation and Finance (DTF). The attorney was sentenced to three years’ probation, a $1,000 fine, and a $160 surcharge upon his agreement not to work for the State of New York any further.
I represent taxpayers before the New York State Department of Taxation and Finance. Some DTF employees are attorneys, some are not. Some of the attorneys practice law for DTF, some do not. The attorney in this matter, Victor Molina, apparently did not practice law for DTF.
So what’s the big deal? He was a Tax Compliance Agent for DTF. In his employee contract, he agreed to request approval of the Commissioner to engage in outside legal work. DTF also stipulated that unauthorized use of data obtained through the DTF computer system was prohibited.
Mr. Molina alleged that he wasn’t aware of the need for approval to practice law outside DTF until after criminal charges were brought against him in 2007. He had opened his own law office in the Bronx in 2004.
Ignorance is not bliss in this case. Any attorney should know better. If you work for the government and you also represent individuals, there’s the potential for an inherent conflict of interest.
The parties stipulated that the attorney acted as counsel in 17 enumerated civil cases, and represented clients in various criminal matters. Even if the civil matters did not involve any governmental or municipal parties, the criminal matters certainly did. In other words, the attorney was playing a role on each side.
Depending on the particular circumstances, having a role on both sides may be permissible. But, if those roles even just hint of crossing paths, we may have a conflict problem. As you’ll see below, there is an indication that the attorney handled tax-related matters for his individual clients. Extreme caution must first be taken when taking roles on both sides. By not first obtaining approval from DTF to represent individuals, this attorney came up short.
Even if the attorney did obtain this approval, he engaged in other misconduct. The opinion notes how he used the DTF database to obtain information for his individual clients’ cases:
He accessed the department’s database, with his client’s authorization, to find out where her partners were located and to ensure that they were not moving partnership assets. He also accessed a tax reporting system in order to ascertain whether the partnership filed a tax return and view the addresses listed for it and the “sales tax reporting system,” “access[ing] at least three databases” which contained information derived from tax returns.
Essentially, he commingled his private matters with his employment at DTF.
The Appellate Division was asked to decide the appropriate punishment for this attorney. The court noted that the nature of the misconduct is the standard applied to determine whether a suspension is warranted. The court placed value in the attorney admitting to and taking responsibility for his misconduct. Further, the court noted, the attorney undertook these matters due to financial pressure to make ends meet, as opposed to seeking a lavish lifestyle.
(Hat tip: TaxProf Blog)