Opinion
June 22, 1999.
Disciplinary Proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent was admitted to the Bar on March 28, 1979, at a term of the Appellate Division of the Supreme Court in the Second Judicial Department, as Michael Allan Lulkin.
Richard M. Maltz of counsel ( Thomas J. Cahill, attorney), for petitioner.
Frederick P. Hafetz and Susan R. Necheles of counsel ( Goldman Hafetz, attorneys), for respondent.
Respondent Michael A. Lulkin was admitted to the practice of law in the State of New York by the Second Judicial Department on March 28, 1979 as Michael Allan Lulkin. At all times relevant to these proceedings, respondent maintained an office for the practice of law within the First Judicial Department.
On July 7, 1998, respondent pleaded guilty to four Federal felony counts in the United States District Court for the Southern District of New York. He was convicted of two counts of conspiring to commit securities fraud, mail fraud and wire fraud in violation of 18 U.S.C. § 371; one count of conspiring to launder money in violation of 18 U.S.C. § 1956 (h); and one count of mail fraud in violation of 18 U.S.C. § 1341.
The Departmental Disciplinary Committee now seeks an order striking respondent's name from the roll of attorneys pursuant to Judiciary Law § 90 (4) (b). Respondent contends that since the Federal felonies in question have no New York felony equivalents ( Matter of Greenberg, 187 A.D.2d 12; Matter of Milchman, 74 A.D.2d 92), automatic disbarment under Judiciary Law § 90 (4) (a) is not appropriate. Instead, he claims, his convictions should be deemed "serious crimes" under Judiciary Law § 90 (4) (d) and this Court should order a hearing on the appropriate sanction. However, the Committee correctly argues that his plea allocution contains admissions necessary to satisfy the elements of Penal Law § 180.08 (commercial bribe receiving in the first degree) and § 190.65 Penal (scheme to defraud in the first degree), both class E felonies. Even if the statutory language defining the Federal felony is not essentially similar to a New York felony, respondent will be deemed guilty of a felony as defined in Judiciary Law § 90 (4) (e) if the criminal conduct admitted to in the Federal plea allocution satisfies the elements of a New York felony ( Matter of Kaye, 217 A.D.2d 197).
A person is guilty of first-degree commercial bribe receiving where, without his employer's consent, he agrees to accept a benefit exceeding $1,000 from a third party in exchange for influencing the employer's conduct, and thereby causes the employer to suffer loss exceeding $250. In respondent's plea to count four, mail fraud, he admitted that he took part in a kickback scheme, in which he created falsely inflated invoices from vendors who dealt with his employer, PDK Labs. After PDK Labs paid the inflated price to the vendor, the vendor kicked back the difference to respondent. This scheme went on from 1996 to 1998 and netted respondent illegal profits of $195,000. Respondent's fraudulent scheme satisfies the elements of Penal Law § 180.08, a New York felony, which by itself would be sufficient to justify granting the Committee's motion. There is no merit to respondent's defense that he was not the organizer of the scheme, as this is not a required element of the crime ( People v. Reynolds, 174 Misc.2d 812).
Were any further rationale needed, respondent's plea allocution to the other three counts also satisfies the elements of first-degree scheme to defraud under Penal Law § 190.65 (1) (b). A person is guilty of this felony where he engages in a systematic ongoing course of conduct to obtain property from more than one person by false pretenses, representations or promises, and thereby obtains property worth more than $1,000 from one or more such persons.
Between 1995 and 1997, respondent participated in a securities fraud scheme in which he and fellow investors made $500,000 from material misrepresentations in the prospectuses of two companies' initial public offerings (IPO). Specifically, the co-conspirators arranged that respondent would obtain stock in companies that the underwriter Sterling Foster was about to bring public, and that, after the IPO, respondent would sell the stock back to Sterling Foster at pre-arranged prices. The prospectuses of these companies did not disclose the resale agreement nor the fact that respondent's co-conspirators had a secret ownership interest in the stock. The money laundering count relates to his creation of false documents and deceptive wire transfers of these illegal profits to other entities controlled by respondent.
Unlike the Federal conspiracy statute in question, which only requires that respondent has agreed to obtain property from a defrauded person, Penal Law § 190.65 requires proof that respondent actually obtained property from a defrauded person. Respondent alleges that this element was not satisfied here, because he received his money from the sale of his stock to co-conspirator Sterling Foster and not directly from a defrauded investor. This argument also fails. The mechanism by which the co-conspirators divided their ill-gotten gains is irrelevant: the operative fact here is that respondent and his co-conspirators intentionally defrauded all members of the public who invested in the companies in question, and obtained $500,000 thereby. "A systematic ongoing scheme to defraud is established by the planned pattern of conduct of the defendant rather than the existence of identifiable multiple victims" ( People v. Burks, 254 A.D.2d 738, 739). The individual identities of all the victims need not be established where it is self-evident that numerous people were defrauded ( People v. Burks, supra).
Accordingly, the Committee's petition for an order striking respondent's name from the roll of attorneys pursuant to Judiciary Law § 90 (4) (a) should be granted.
ROSENBERGER, J. P., MAZZARELLI, RUBIN, ANDRIAS and BUCKLEY, JJ., concur.
Petition granted, and the name of respondent stricken from the roll of attorneys and counselors-at-law in the State of New York forthwith.