Summary
The Colorado disciplinary Hearing Board considered sanctions for an attorney who pleaded guilty to conspiracy to defraud the United States by assisting more than 150 clients in avoiding tax-reporting obligations. Applying Colorado disciplinary rules and the ABA Standards for Imposing Lawyer Sanctions, the Board determined that the misconduct warranted disbarment. The decision also ordered compliance with winding-up requirements and payment of proceeding costs.
Topics
Practice areas
Questions Presented
- Whether Sugar's federal felony conviction constituted conclusive proof that she committed a criminal act reflecting adversely on her honesty, trustworthiness, or fitness as a lawyer under Colo. RPC 8.4(b) and C.R.C.P. 251.20(a).
- Whether disbarment was the appropriate sanction after considering the applicable ABA Standards and aggravating and mitigating circumstances.
Holdings
- Sugar's guilty plea and conviction for conspiracy to defraud the United States conclusively established the commission of the crime and established that she knowingly and intentionally participated in the fraudulent scheme.
- Sugar violated Colo. RPC 8.4(b) by committing a criminal act that reflected adversely on her honesty, trustworthiness, and fitness as a lawyer.
- Disbarment was warranted because Sugar engaged in serious, intentional criminal conduct involving fraud, repeatedly used her law practice to facilitate tax evasion, caused millions of dollars in potential tax losses, and presented no sufficient basis to depart from the presumptive sanction.
Key quotations
“Per C.R.C.P. 251.20(a), conviction of the crime is “conclusive proof of the commission of that crime” by Respondent.” (1045)
“Respondent's fraudulent conduct falls squarely within ABA Standard 5.11, prescribing disbarment.” (1048)
“EVA MELISSA SUGAR, attorney registration number 190083, is DISBARRED.” (1049)
Factual background
Beginning around 1999, Sugar assisted Financial Fortress Associates clients in using purported trusts and unincorporated business organizations to conceal income, avoid tax reporting, and claim improper business deductions. She created entities, obtained employer identification numbers, opened bank accounts, prepared documents, and charged fees for services that enabled more than 150 clients to evade tax obligations. She pleaded guilty to federal conspiracy to defraud the United States, involving an agreed tax loss of between $2.5 million and $7 million, and was sentenced to eighteen months in prison.
Procedural history
The People sought Respondent's immediate suspension after her federal conviction. The Colorado Supreme Court adopted the recommendation and suspended her. The People then filed a disciplinary complaint alleging a violation of Colorado Rule of Professional Conduct 8.4(b); Respondent admitted the allegations, and the Presiding Disciplinary Judge granted the People's unopposed motion for judgment on the pleadings. After a sanctions hearing, the Hearing Board ordered disbarment and payment of proceeding costs.