V I R G I N I A:



VSB Docket Number 98-041-2379


This matter came on July 10, 2001, to be heard on the Agreed Disposition of the Virginia State Bar and the Respondent, based upon the Certification of a Fourth District-Section I Subcommittee. The Agreed Disposition was considered by a duly convened panel of the Virginia State Bar Disciplinary Board consisting of Chester J. Cahoon, Lay Member, Robert E. Eicher, Esquire, Karen A. Gould, Esquire, Janipher Winkfield Robinson, Esquire, and Randy Ira Bellows, Esquire, presiding. The hearing was transcribed by Donna T. Chandler, Court Reporter, Chandler & Halasz, P.O. Box 9349, Richmond, Virginia 23227, telephone (804) 730-1222.

Seth M. Guggenheim, Esquire, representing the Bar, and the Respondent, Margo Bly Owen, Esquire, appearing pro se, presented an endorsed Agreed Disposition, dated July 2, 2001, reflecting the terms of the Agreed Disposition.

Having considered the Certification and the Agreed Disposition, it is the decision of the Board that the Agreed Disposition be accepted, and the Virginia State Bar Disciplinary Board finds by clear and convincing evidence as follows:

1. At all times relevant hereto, Margo Bly Owen, Esquire (hereinafter the Respondent), has been an attorney licensed to practice law in the Commonwealth of Virginia.

2. In or around December, 1997, Respondent entered into a business arrangement with one Alan Dubow (hereinafter "Dubow") whereby legal representation in bankruptcy matters in Virginia would be provided to members of the public by and through an entity called "Debt

Relief Centers, Inc.", which Respondent represented to the public via her business cards as "A Non-Profit Corporation." Respondent was an initial director and vice-president of Debt Relief Centers, Inc., which was incorporated in Virginia effective December 29, 1997. Subsequently, via an amendment to its certificate of incorporation, the corporation came to be called "Debt Clinic, Inc." Such corporation neither requested nor received authority to operate as a professional law corporation pursuant to the Rules of the Supreme Court of Virginia; moreover, with the exception of Respondent, no other officers, directors, and/or shareholders of such entity were licensed to practice law.

3. As of the time Respondent entered into her business arrangement with Dubow, Dubow was not licensed to practice law in the Commonwealth of Virginia, the District of Columbia, or any other state. In fact, Dubow had been disbarred in Florida on March 24, 1994, by the Florida Supreme Court for conduct which included misappropriation of client funds, check-kiting, issuing worthless checks, and fraudulent conduct in a real estate transaction which resulted in grave financial harm to a client. Furthermore, Dubow was suspended from the practice of law in the District of Columbia by the District of Columbia Court of Appeals on April 22, 1994, which said suspension remained in force and effect at all times pertinent to the allegations contained in this Certification.

4. Prior to the time Dubow and Respondent were associated for purposes of providing legal representation to debtors in bankruptcy in the Commonwealth of Virginia through Debt Relief Centers, Inc., and Debt Clinic, Inc., Respondent was a shareholder and director of an entity known as "Debt Relief Law Firm, P.C.", and a director of yet another corporation known as "Debt Relief Centers, Inc.", both of which latter entities provided legal representation to debtors in Maryland and the District of Columbia. On February 5, 1998, Dubow entered into a consent agreement in the District of Columbia Bankruptcy Court which required the disgorgement of fees received in six bankruptcy cases by Debt Relief Centers, Inc., and Debt Relief Law Firm, P. C. That Court also enjoined both of these entities from practicing law before it.

5. Clients of the Virginia corporate entities, solicited via advertisements, would meet with Dubow, a nonlawyer, who would enter into contracts with them. He would discuss with the debtor-clients the differences between bankruptcy chapters, go over the procedure for filing for bankruptcy, review the debtor-clients' applications, help them in the valuation of items on schedules to be filed with the court, counsel them respecting exemptions, advise them on the treatment of student loans, and discuss with them the effect of the reaffirmation of debts. At every critical juncture in the debtor-clients' bankruptcy cases, Dubow, a nonlawyer, was the only person advising these individuals.

6. Respondent worked in concert with Dubow and the aforesaid corporate entity operating in Virginia. Having had no prior communications with most of the clients, Respondent would meet them, for the very first time, at the 341 creditors' meetings. Among other fee-sharing arrangements with a nonlawyer, Respondent would receive from Dubow and/or the Virginia corporation the minimum sum of $150.00 for each bankruptcy case in which she attended the 341 creditors'meeting. Such fee paid to Respondent represented a portion of the $650.00 fee that had been set and collected by Dubow. The fees paid by bankruptcy clients were not deposited in an attorney trust account, but were deposited into one or more corporate accounts of the Virginia entity, over which account(s) Respondent had no signatory authority or other control.

7. Via motions filed by Assistant United States Trustee Dennis J. Early (hereinafter Complaint), the circumstances of Dubow's and Respondent's conduct were brought to the attention of the bankruptcy court in Virginia. In a Memorandum Opinion issued with respect to four bankruptcy cases(1) the Chief Judge of the United States Bankruptcy Court for the Eastern District of Virginia found the conduct of Dubow and Respondent unethical and "so egregious as to make any collection of fees unreasonable" and by Order entered on September 2, 1998, ordered Dubow, Respondent, and the Debt Clinic, Inc., "to disgorge all fees received" in connection with the four cases in question. The Court, in In Re: Tracy Lynn Smith (Bankr. E.D. Va 98-10316), had previously ordered Dubow, Respondent, and the Debt Clinic, Inc. to disgorge fees under the same circumstances.

8. On September 11, 1998, Respondent, as "attorney for appellants", filed notices of appeal of the aforesaid bankruptcy court's September 2, 1998, order directing the disgorgement of fees and other relief. The September 2, 1998, order had been entered by the court to protect and advance Respondent's clients' interests, and Respondent's action in appealing the relief therein granted was for the purpose of advancing her own personal and financial interests, and was contrary to the interests of such clients. Such notices of appeal were filed by Respondent without her having first obtained consent from each client following full and adequate disclosure to each client of the circumstances pertaining to such filings.

9. Mitigating factors recognized by the ABA include the following:

a. absence of a prior disciplinary record;

b. absence of a dishonest or selfish motive;