• How Giving Legal Advice Can Lead to a Criminal Indictment
  • March 14, 2014 | Author: Rocco J. Carbone
  • Law Firm: Marshall Dennehey Warner Coleman & Goggin, P.C. - Jacksonville Office
  • Key Points:

    • Kelly Mathis, a prominent Jacksonville attorney, has recently been convited on 103 of 104 criminal counts pertaining to his legal representation of a non-profit charity.
    • Mr. Mathis felt he was merely convicted for giving legal advice.
    • The ABA Model Rules, and the Florida Rules of Professional Conduct, aide attorneys in deciding when, and how, to give legal advice.

     

    On October 12, 2013, the Office of the Florida Attorney General convicted Kelly Mathis, a prominent Jacksonville attorney, of 103 out of 104 criminal counts, including felony racketeering. The Attorney General’s Statewide Prosecutor indicted Mr. Mathis and 57 other co-defendants on various charges stemming from the allegation that the defendants were laundering money through Mr. Mathis’s former client, Allied Veterans of the World, a non-profit charity.

    The prosecutors alleged that members of the public would enter “internet cafes” of the organization and buy internet time to play “computerized games,” which were actually illegal slot machines. Mr. Mathis was the attorney who gave the advice on how to set up the organization. At the time he gave this advice, the law was unsettled. In the course of the investigation, the Attorney General’s Office discovered that less than three percent of the $300 million went towards the intended purpose of the charity.

    The resulting indictments and investigation set off a firestorm in Florida. In Jacksonville alone, several members of the local sheriff’s office were indicted, including the president of the Fraternal Order of the Police—the sheriff’s office local union. The Lieutenant Governor of Florida, Jennifer Carroll, resigned after she was questioned about her involvement in lobbying for the organization. The Florida legislature did not pass a law prohibiting the use of these gaming devices until after Mr. Mathis was indicted.

    In describing Mr. Mathis, Statewide Prosecutor Nick Cox described him as the “mastermind” behind the entire enterprise, while Mr. Mathis argued he was merely an attorney giving legal advice to the organization. After the verdict, the Associated Press reported Mr. Mathis as saying, “I gave legal advice as an attorney, that’s all I did - Attorneys all over the nation need to be very afraid when six years after you give legal advice, somebody disagrees with that legal advice and they convict you of a crime.”

    At the time of writing this article, Mr. Mathis is awaiting sentencing and has filed a motion for a new trial. His argument for a new trial is based on the fact that several of his witnesses were excluded from testifying regarding the unsettled state of the law at the time he rendered his advice. Regardless of the outcome of this motion and eventual appeal, this case stands as a warning. Attorneys must be knowledgeable about how one’s advice might be construed as criminal. No matter what practice area in which an attorney focuses, attorneys must always be aware of the threat of a legal malpractice claim, or in some contexts, allegations that one is somehow involved in a criminal activity. While the advice an attorney gives varies, the guiding light for each attorney should always be the Rules of Professional Conduct.

    The American Bar Association and the Florida Rules of Professional Conduct similarly outline the scope of an attorney’s responsibilities when giving legal advice. Specifically, when an attorney’s legal advice may deal with potential criminal actions by a client, ABA Model Rule 1.2(d) states:

    A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law. (Emphasis added).

    In viewing Florida’s version of Rule 1.2, there is only one significant difference. In Florida an attorney may not “counsel a client to engage, or assist a client, in conduct that the lawyer knows or reasonably should know is criminal or fraudulent.” See 4-1.2(d), Fla. Bar. Reg. R. (emphasis added). In the context of these rules, “knows” is defined as “actual knowledge of the fact in question,” and “reasonably should know” means “that a lawyer of reasonable prudence and competence would ascertain the matter in question.”

    At the time Mr. Mathis provided legal advice, the question for Mr. Mathis, as the attorney for Allied Veterans, was whether he knew, or reasonably should have known, that he was counseling his client to engage in conduct that was criminal or fraudulent. Beyond the mere definitions at issue, comments 9 and 10 of the ABA Model Rules further illustrate the delicate balance for an attorney rendering such advice.

    Comment 9 states that Rule 1.2(d) “does not preclude the lawyer from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. Nor does the fact that a client uses advice in a course of action that is criminal or fraudulent of itself make a lawyer a party to the course of action.” But, the comment further states, “[t]here is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.” (Emphasis added). Comment 10 also describes the “delicate” balance that must be struck by an an attorney when a client has already begun to engage in the potentially questionable conduct. In such a situation, when an attorney discovers that the conduct is, in fact, illegal, the attorney may need to withdraw and disaffirm his or her legal advice. when an attorney discovers the conduct is illegal.

    In reviewing these rules, it appears the crux of the prosecutors’ arguments rest on the belief that the Mr. Mathis’s advice was criminal. They contend that he was not merely giving a legal opinion. It has been reported that one prosecuter stated: “You can’t use the practice of law as a shield.”

    Still, Mr. Mathis argues that the advice he gave was nothing more than an honest legal opinion on an unsettled area of the law, and that, if there was criminal or fraudulent conduct, his advice did not make him a party to that conduct. Ironically, of the 104 counts submitted to the jury, the lone count the jury acquitted Mr. Mathis of was conspiracy.

    Whatever the ultimate result of Mr. Mathis’s case, a firm understanding of the Rules of Professional Conduct is imperative. Not only do the Rules aide every attorney when rendering legal advice, but they may help to justify one’s actions if the government ever comes knocking.