BEFORE THE VIRGINIA STATE BAR DISCIPLINARY BOARD
IN THE MATTER OF
CHARLES WILLIAM AUSTIN, JR.
VSB DOCKET NO. 98-031-0127
This matter came to be heard on September 12, 2002 upon an Agreed Disposition between the Virginia State Bar, the Respondent, Charles William Austin, Jr., and the Respondent's Counsel, Craig S. Cooley, Esq.
A duly convened panel of the Virginia State Bar Disciplinary Board consisting of Bruce T. Clark, Esq., Janipher Winkfield Robinson, Esq., Roscoe B. Stephenson, III, Esq., Thaddeus T. Crump, Lay Member, and Karen A. Gould, Esq., 2nd Vice Chair, presiding, considered the matter by telephone conference. The Respondent, Charles William Austin, Jr., appeared with his counsel, Craig S. Cooley, Esq. Edward L. Davis, Assistant Bar Counsel, appeared on behalf of the Virginia State Bar.
It is the decision of the Virginia State Bar Disciplinary Board to accept the Agreed Disposition as revised. The Stipulations of Fact, Disciplinary Rule Violation, and Disposition agreed to by the Virginia State Bar, the Respondent and his counsel are incorporated herein as follows:
1. During all times relevant hereto,
the Respondent, Charles William Austin, Jr., was an attorney licensed to practice
law in the Commonwealth of Virginia.
2. For most of his career, Mr. Austin's
law practice focused on the representation of investors in claims against broker-dealers
and investment advisors. During 1996, another attorney referred a client to
Mr. Austin who lost a substantial investment in a mutual fund known as the Pilgrim
Adjustable Rate Securities Trust, later renamed the Astra Fund. Based on his
experience, Mr. Austin saw the Astra Fund as a potential defendant in an investment
fraud lawsuit, and in an attempt to develop potential clients, commenced efforts
to obtain a list of investors in the failed fund.
3. Toward this end, Mr. Austin worked
with two attorneys, one in Florida and the other in Atlanta, who were well experienced
in this kind of litigation. In an attempt to obtain a list of investors, he
utilized the same means that he had used in prior cases. Wanting to obtain a
list as soon as possible, however, he also responded to an advertisement in
the August/September 1996 issue of the Virginia Lawyer. The advertisement
was for a purported information gathering service that offered to locate stocks,
bonds and mutual fund portfolios on anyone in the United States, including accounts
and balances. Mr. Austin contacted the service, which offered to obtain the
list of investors in the Astra Fund for a fee of $25,000 (twenty five-thousand
4. Unbeknownst to Mr. Austin, his
contact at the purported information gathering service was a convicted felon
with a lengthy history of property crime and fraud convictions. This contact,
a private investigator, planned to obtain the list through an illegal means,
by purchasing it from an employee at the Internal Revenue Service who had access
to the information on a computer data base. During 1997, this contact took substantial
steps toward completing the crime, but the IRS employee informed federal agents
about the scheme, and they arrested Mr. Austin's contact.
5. At the time, Mr. Austin worked
in an "of counsel" position with a law firm in Richmond, Virginia. He sought
half of the $25,000 needed to purchase the list from the law firm where he worked,
and the other half from his attorney friend in Atlanta. Each provided $12,500,
which Mr. Austin paid to his contact as agreed. Following his arrest, the contact
pled guilty to federal criminal charges relating to the IRS scheme. The Government,
however, failed to prove any criminal conduct by Mr. Austin.
6. In obtaining the funds for the
list, Mr. Austin was not forthright with the attorneys in Richmond or Atlanta
about the source of the list. For example, the Richmond attorneys would say
that Mr. Austin told them that the source of the list was a proxy solicitation
firm, when it was not. Mr. Austin would say that, to his memory, he told them
that it was a proxy solicitation effort as opposed to a firm. Regardless, Mr.
Austin testified during his trial that he did not know the source of the list,
but that he told the Richmond attorneys that it was a proxy solicitation effort
because they would be more likely to contribute the money to purchase the list
than if he told them that he did not know where the list came from.
7. With respect to the Atlanta attorney,
Mr. Austin informed him about a prior offer by the contact to obtain the list
through an improper means, which Mr. Austin refused. Upon informing the Atlanta
attorney about that suggested scheme, the Atlanta attorney told Mr. Austin that
they should not use this contact again. Regardless, when Mr. Austin later sought
$12,500 from the Atlanta attorney, it was to pay the same source that they had
previously discussed. When the Atlanta attorney asked Mr. Austin if it was the
same source, Mr. Austin falsely told him that it was not. He also told him that
the list was the result of a process of elimination, starting with a larger
list being narrowed to a smaller list. Mr. Austin acknowledged during his trial
that this was not a true statement.
8. The Richmond lawyers would say that, to their memory, they recovered most of the money paid to Mr. Austin by setting it off against attorneys fees owed to Mr. Austin, and that they are satisfied with the way that this matter was concluded. (The Atlanta attorney does not want to be involved any further.) Other mitigating factors recognized by the American Bar Association are the Respondent's lack of a prior disciplinary record, and cooperation during the investigations of this matter.
II. DISCIPLINARY RULE VIOLATIONS
The parties agree that the aforementioned facts give rise to a violation of the following Disciplinary Rule:
DR 1-102. Maintaining
Integrity and Competence of the Legal Profession.
(A) A lawyer shall not:
(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation which reflects adversely on a lawyer's fitness to practice law.
Upon consideration of the Stipulations of Fact and Disciplinary Rule violation, and the comments of counsel, the Board accepts the agreed upon sanction of a Public Reprimand as an appropriate disposition. Accordingly, the Respondent is hereby Reprimanded.
Pursuant to Part Six, Section IV, Paragraph 13(K)(10) of the Rules of the Supreme Court, the Clerk of the Disciplinary System shall assess costs.
The court reporter who transcribed this proceeding is Tracey Stroh, Chandler & Halasz, P.O. Box 9349, Richmond, Virginia 23227, (804) 730-1222.
A copy teste of this Order shall be served upon the Respondent, Charles William Austin, Jr., by Certified Mail, Return Receipt Requested, at 11930 Rothbury Drive, Richmond, Virginia 23236, his address of record with the Virginia State Bar, by regular mail to his counsel, Craig S. Cooley, Esq., at 3000 Idlewood Avenue, Post Office Box 7268, Richmond, Virginia23221, his address of record with the Virginia State Bar, and by hand to Edward L. Davis, Assistant Bar Counsel, at the Virginia State Bar.
ENTERED THIS _________ DAY OF ___________, 2002
THE VIRGINIA STATE BAR DISCIPLINARY BOARD
KAREN A. GOULD, SECOND VICE CHAIR