ATTORNEY DISBARRED FOR USING NON-LAWYERS TO SOLICIT LIVING TRUSTS WITH AN ULTIMATE GOAL OF SELLING ANNUITIES
Montgomery County attorney Barry O. Bohmueller has been disbarred in Pennsylvania following his participation in an estate-planning company that had nonlawyers drafting trusts for the elderly.
A three-justice majority of the court voted to disbar Bohmueller, according to as per curiam order filed Jan. 23. Justices J. Michael Eakin and Max Baer dissented in favor of a five-year suspension.
The Disciplinary Board of the Supreme Court, in a March 2014 opinion made public with the court’s order, said Bohmueller allowed nonlawyers to counsel his clients, did not communicate properly with his clients concerning their individual estate planning, failed to inform clients of fee sharing and conflicts of interest and engaged in other dishonest and fraudulent conduct.
“Bohmueller’s status as a lawyer gave legitimacy to the estate planning businesses. It was the means by which the agents could persuade the potential clients to obtain the living trust which brought the agents one step closer to their ultimate goal of selling annuities to the clients,” the opinion said. “Not only did these senior citizens believe that the agents were working for (Bohmueller), the evidence demonstrates that at least several believed that the agent was a lawyer.”
Bohmueller allegedly acted in concert with solo practitioner Brett Weinstein of King of Prussia, Pa., who was disbarred in July 2014. According to the board, Bohmueller and Weinstein hired non- lawyer agents, who visited the homes of senior citizens to sell them living trusts. According to testimony from three employees of the operation, agents gave false and misleading advice in order to make sales.
Meanwhile, the board said, Bohmueller had little or no interaction with his clients, and allowed the agents to advise and counsel his clients without oversight.
“Clearly, respondent had no opportunity to personally consider the clients’ assets or even know if these clients had the mental capacity to enter into the living trust, nor, it seems, did he care,” the opinion said.
The Office of Disciplinary Counsel filed a petition for discipline against both lawyers simultaneously, and the cases were consolidated for hearing. Separate hearing committee reports were filed.
The ODC initially recommended a two-year suspension for Bohmueller in August 2013. Upon review, the disciplinary board recommended disbarment in March 2014, and asked the Supreme Court to take action.
Bohmueller and Weinstein were law school classmates. They worked in a combined practice from about 2000 to about 2004 providing living trusts through a company called Estate Planning Advisors, according to the disciplinary board’s reports. The two shared an office and resources, including support staff, although Bohmueller used a different address in his records.
Bohmueller and Weinstein’s nonlawyers agents were tasked with explaining the benefits of the products and each of the provisions on delivery, the report said, and they were paid if they made a sale. One agent assisted clients in funding the trusts and transferring assets to the trusts.
At a consolidated disciplinary hearing for both attorneys, several past clients of Bohmueller testified, the board said.
One couple liquidated securities worth $2.8 million to buy four annuities, the opinion said, after no communication or meeting with Bohmueller himself. They believed the deliverer of the annuities was an estate planner and adviser, the report said, not a salesperson.
According to the report, Weinstein and Bohmueller shared fees, although they were not partners, and failed to inform their clients of this arrangement.
Weinstein wrote checks to Bohmueller from 2001 to 2004 that totaled about $510,000. Checks from Bohmueller’s four IOLTA accounts and one business account made out to Weinstein totaled $1.2 million. Weinstein said this was for office expenses and capital improvements to Bohmueller’s office, but the board said his testimony about the accounts was neither credible nor persuasive.
According to the board’s report Bohmueller’s IOLTA accounts were in his name, but Weinstein was able to access them. The board said Bohmueller also failed to disclose two of his four accounts in his annual attorney registration forms.
“The fact that respondent failed to keep records of the two IOLTA accounts, coupled with the fact that he listed a virtual office address on the same attorney registration forms, indicates his knowledge that he was engaged in an unethical scheme,” the board said.
During Supreme Court arguments, Bohmueller’s attorney, Jeffery B. McCarron of Swartz Campbell, acknowledged that thousands of living trusts were sold when Weinstein and Bohmueller worked together.
The Office of the Attorney General brought a case against Bohmueller and Weinstein in 2004. Bohmueller separated himself from Weinstein at that time McCarron said, although Weinstein continued with similar business practices.
“This scheme, as opposed to all the other cases… is fraud with a level of deception, duration and severity that is unheard of,” Amelia C. Kittredge, disciplinary counsel-in-charge for the District 3 office of the disciplinary board, said during arguments before the Supreme Court. “Both living trust schemes were participated in with the most dishonest of tactics.”
Clients who wanted refunds for the annuities they purchased got their money back, McCarron said during arguments. Bohmueller continued to practice law after 2004, he said, and has been incident-free since then.
During arguments, Eakin asked why, if this is such a troublesome case as to warrant disbarment, it took 10 years to make that recommendation.
Kittredge said the exclusive jurisdiction of the Attorney General’s Office prevented the ODC from proceeding with the case until 2009.
“We certainly agree with the decision and we had pressed for it at the Supreme Court,” Kittredge said to the Law Weekly following the disbarment.
In an interview with the Law Weekly after the disbarment, McCarron said he was surprised by the outcome.
“I believed based on the arguments before the Supreme Court it would not be disbarment,” he said.
Reference: Lizzy McLellan, Pennsylvania Law Weekly, February 3, 2015
Filed Under: Living Trusts; Estate Planning
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