THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
FORMAL OPINION 1999-02
TOPIC: Fugitive Client; Illegal Conduct; Client Instructions; Civil Representation
DIGEST: A lawyer may (i) sell assets of a fugitive client and place the proceeds in escrow, (ii) pay the creditors of the client from the escrowed funds and (iii) forward the balance of the proceeds to the client, provided that the lawyer does not know, or believe (after inquiry, if called for under the circumstances), that the sale or disposition of proceeds is unlawful or will be used to commit an illegal or fraudulent act. A lawyer may continue to represent a fugitive client in civil matters which precipitated the criminal investigation and the fugitive status of the client.
CODE: DRs-110(B)(2); 2-110(C); 7-101(B)(2); 7-102(A)(7); 9-102(C)(4); EC 7-5; EC 7-7; EC 7-8; EC 7-17.
1. May a lawyer who represents a client who is currently a fugitive sought on criminal charges continue to follow the clients instructions to (i) sell her assets and place the proceeds in escrow, (ii) make payments to her creditors from the escrowed funds and (iii) forward the balance from the escrowed funds to the client?
2. May the lawyer continue to represent the fugitive client in civil matters which precipitated the criminal investigation and the fugitive status of the client?
As a preliminary matter, we note that the present inquiry raises questions of law as well as ethical issues under the Lawyers Code of Professional Responsibility (the "Code" ). While the Committees mandate is limited to interpreting the Code, this opinion identifies some of the legal questions raised in order to provide a framework for the ethical analysis.
A. ATTORNEY CONDUCT ON BEHALF OF THE CLIENT.
In general, a lawyer has an obligation to follow a clients instructions regarding the course of representation, provided that the lawyers conduct is legal and that the client is using the lawyers services in an appropriate manner. See Canon 7 ( A Lawyer Should Represent a Client Zealously Within the Bounds of the Law ); see also EC 7-17 (a lawyer owes an obligation of loyalty to the client). Although a lawyer should inform the client of relevant legal as well as non-legal considerations, most decisions rest exclusively with the client and not with the lawyer. See EC 7-7 (the authority to make decisions is exclusively that of the client and, if made within the framework of the law, such decisions are binding on the lawyer ); EC 7-8 (stating that the ultimate decision whether to forego legally available alternatives because of non-legal factors belongs to the client). Accordingly, the determination of whether a lawyer may ethically engage in conduct requested by a client depends in part on the clients choices and on whether, as a matter of law, the proposed action is illegal or intended for illegal purposes.
This opinion is limited to a lawyers representation of a fugitive client fleeing criminal charges. In that connection, a fugitive is defined as:
[A] person who, having committed a crime, flees from jurisdiction of the court where the crime was committed or departs from his usual place of abode and conceals himself within the district. A person who, having committed or been charged with a crime in one state, has left its jurisdiction and is found within territory of another state when it is sought to subject him to criminal process of former state.
Blacks Law Dictionary 462 (Abridged 6th ed. 1991) (citing 18 U.S.C. §§ 1073, 1074 (Fugitives From Justice)); see also 18 U.S.C. § 921(a) (15) (1997) (stating that the term fugitive from justice means any person who has fled from any State to avoid prosecution for a crime or to avoid giving testimony in any criminal proceeding ).
Various ethics committees have differed with respect to whether it is ethical for an attorney to follow a clients instructions when the lawyer knows that the client is a fugitive. See, e.g., Connecticut Inf. 93-2 (1993) (opining that a lawyer may settle a personal injury case for a fugitive client and may not withhold property rightfully belonging to the client simply because of a speculation or suspicion regarding the clients possible use of that property); Michigan RI-160 (1993) (opining that a lawyer may not represent a client in collateral or unrelated civil matters, and may not recover funds which the client would not be able to recover due to his or her underground status, while the lawyer knows that the client remains a fugitive); N.Y. County 70 (1915) (opining that a lawyer may ethically honor a fugitive clients order directing payment of the clients property to one outside of the United States).
A. General Ethical Principles.
We begin by setting forth some general principles regarding a lawyers ethical obligations when representing a client.
1. Conduct the Lawyer Knows to be Illegal or Fraudulent.
The Code clearly prohibits a lawyer from actively contributing to the accomplishment of a clients purpose that the lawyer knows is criminal. DR 7-102(A)(7) provides that:
A. In the representation of a client, a lawyer shall not:
. . .
7. Counsel or assist the client in conduct that the lawyer knows to be illegal or fraudulent.
DR 7-102(A)(7) (emphasis added).
Accordingly, if a client is prohibited under the law from engaging in certain conduct relating to property because he or she is a fugitive, a lawyer may not counsel or assist the client in such conduct. Similarly, if a fugitive is not prohibited from engaging in such conduct, but the lawyer knows that the client intends to use the lawyers services to further an illegal purpose, the lawyer is prohibited from providing such services to assist the client. In short, a lawyer may not assist the client in any way that the lawyer knows will further an illegal or fraudulent purpose.
2. Conduct the Lawyer Believes to be Illegal or Fraudulent.
A related dilemma arises when the clients motives are unclear, or when the requested services do not explicitly constitute illegal conduct. DR 7-101(B)(2) provides that:
B. In the representation of a client, a lawyer may:
2. Refuse to aid or participate in conduct that the lawyer believes to be unlawful, even though there is some support for an argument that the conduct is legal.
DR 7-101(B)(2) (emphasis added). Thus, whereas a lawyer is required to assist in achieving the clients lawful objectives, a lawyer has complete discretion in dealing with conduct that the lawyer reasonably believes -- but does not know -- may be intended to further an illegal or fraudulent scheme.
It is the opinion of this Committee that where a fugitive client has requested that a lawyer aid the client in otherwise legal conduct under circumstances that give rise to a suspicion that the conduct may be used to further an illegal or fraudulent act, the lawyer must satisfy him or herself that there is some reasonable support for an argument that the purpose of the request is legal before carrying out the request. As stated by the ABA Committee on Ethics and Professional Responsibility:
[A] lawyer should not undertake representation without making further inquiry if the facts presented by a prospective client suggest that the representation might aid the client in perpetrating fraud or otherwise committing a crime . . . Lawyers have an obligation not to shut their eyes to what was plainly to be seen ... United States v. Benjamin, 328 F.2d 854, 863 (2d Cir. 1964). A lawyer cannot escape responsibility by avoiding inquiry. A lawyer must be satisfied, on the facts before him and readily available to him, that he can perform the requested services without abetting fraudulent or criminal conduct and without relying on past client crime or fraud to achieve results the client now wants. Otherwise, the lawyer has a duty of further inquiry.
ABA Inf. Op. 1470 (1981) (opining on a lawyers obligation to engage in further inquiry where a client requested a lawyers advice as to lawful means of bringing funds into the United States in a manner that avoided or minimized tax liability, but where the lawyer suspected that the fund srepresented payments of unlawful bribes or kickbacks); ABA Inf. Op. 1517 (1986) (opining that, where a client has requested that charges for corporate legal work as well as for personal legal services to the sole shareholder of the corporation be billed directly to the corporation without identifying the personal nature of the legal services, and where the lawyer has reason to believe that the shareholder might cause the corporation to deduct the entire fee as a business expense, the lawyer cannot avoid a violation of the rules against assisting a client in conduct the lawyer knows to be illegal or fraudulent by disclaiming knowledge of illegality or fraud when the lawyer has, without inquiry, recklessly and consciously disregarded information that plainly suggests that a crime or fraud is involved. ) (citing ABA Formal Op. 346 (Revised) (1982)); see also ABA Formal Op. 346 (1982) (opining that a lawyer violates the Code where, as part of an opinion relating to tax shelter investments, the lawyer accepts as true facts told to her when the lawyer should know that a further inquiry would disclose that these facts are untrue ); ABA Formal Op. 335 (1974) (opining as to the circumstances under which and the extent to which the Code requires that a lawyer make some effort to verify or supplement facts submitted as a basis for an opinion relating to registration of securities).
Accordingly, assuming that there are no legal prohibitions, a lawyer may engage in conduct on behalf of the fugitive client under circumstances that give rise to a suspicion that the conduct may be used to further an illegal or fraudulent act only after assuring him or herself that there is reasonable support for an argument that the client's intended use of the fruits of the representation will not further a criminal scheme or act. Of course, the lawyer retains the discretion to refuse to engage or participate in such conduct if the lawyer is not satisfied that such action is lawful. We also note that a lawyer may withdraw from the representation if the lawyer reasonably believes that the client is using such services to commit a crime or fraud. See DR 2-110(C)(1)(b) (stating that a lawyer may withdraw from representing a client if the client persists in a course of action involving the lawyers services that the lawyer reasonably believes is criminal or fraudulent).
B. Application of Principles to Facts.
Applying these principles to the present inquiry, set forth below is the Committees opinion regarding proposed actions requested by a fugitive client.
1. Sale of Assets and Forwarding Proceeds to Client.
We believe that a lawyer may represent and act on behalf of a fugitive client, notwithstanding his or her status as a fugitive, provided that the lawyer does nothing to aid the client to escape prosecution or to further some other illegal act. Here, the Committee agrees that a lawyer may ethically sell a clients tangible assets and place the proceeds in escrow. However, if the circumstances give rise to a basis for suspicion that the lawyer's conduct may be used to commit an illegal or fraudulent act, we do not believe that the lawyer may transfer the proceeds from the sale to the client without first satisfying him or herself that there is some reasonable support for an argument that the purpose of such transfer and the intent and motive of the client after receiving the funds are legal.
If the lawyer decides that the transfer of proceeds to the fugitive client will violate the law, or if the lawyer knows that the client will use the money to further some illegal or fraudulent act, then the lawyer is prohibited under DR 7-102(A)(7) from transferring the money to the client. If the lawyer believes that the transfer of proceeds is intended for some unlawful purpose, although there is support for an argument that the conduct is legal, the lawyer may in his or her discretion, pursuant to DR 7-101(B)(2), refuse to transfer the proceeds to the client. However, if the law does not prohibit such transfers, and if the lawyer does not believe that the client will use such proceeds to further an illegal act, the lawyer should deliver the proceeds to the client pursuant to her instructions. See DR 9-102(C)(4) (stating that a lawyer shall promptly pay or deliver to the client, as requested by the client, the properties in the lawyers possession which the client is entitled to receive).
2. Payment to Clients Creditors From Escrow.
This Committee is of the opinion that the same analysis outlined above applies with respect to the payment of the clients creditors from the escrowed funds. A lawyer may not pay the creditors of the fugitive client if the attorney knows that doing so is illegal or that it will further an illegal purpose. A lawyer also retains the discretion to refuse to participate in such action if she believes that the payment is in furtherance of some illegal or fraudulent scheme. Barring these two scenarios, however, we believe that it would be permissible for a lawyer, and that the lawyer would indeed have an obligation, to pay the creditors of the client, pursuant to the clients instructions, from funds in escrow.
3. Forwarding the Balance of Escrowed Funds to Client.
In the opinion of the Committee, there is no distinction between forwarding the proceeds from the sale of personal assets to the client, as discussed above, and forwarding the balance of funds from the escrow to the client after paying off creditors. Once again, the Committee cautions the lawyer with respect to the legal question of whether she would be furthering a crime by providing means for the client to remain a fugitive. However, assuming that the lawyer determines that there is no legal prohibition, and assuming that she does not know or believe that such conduct would be used for unlawful or fraudulent purposes, this Committee believes that the lawyer would have a duty to forward to the client property which rightfully belongs to the client.
II. REPRESENTING THE CLIENT IN THE CIVIL MATTER.
The next question is whether the Code permits a lawyer to represent a fugitive client in a civil matter, notwithstanding the clients status as a fugitive. DR 2-110 governs mandatory withdrawal and states, among other things, that a lawyer shall withdraw from employment if the lawyer knows or it is obvious that continued employment will result in violation of a Disciplinary Rule. DR 2-110(B)(2). EC 7-5 further clarifies the Disciplinary Rule:
The lawyer may continue in the representation of the client even though the client has elected to pursue a course of conduct contrary to the advice of the lawyer so long as the lawyer does not thereby knowingly assist the client to engage in illegal conduct or to take a frivolous legal position. A lawyer should never encourage or aid the client to commit criminal acts or counsel the client on how to violate the law and avoid punishment therefor.
EC 7-5; see also NY State 529 (1981) (opining that the Code does not require a lawyer to withdraw from representation of a fugitive when the fugitive refuses to surrender, and that a lawyers ethical obligations are best served when the lawyer continues to give legal advice to his fugitive client).
Although some ethics committees have opined that a lawyer cannot represent a defendant so long as he or she remains a fugitive, see N.Y. County 462 (1958); Michigan RI-160 (1993), we refuse to follow such reasoning. Instead, we believe that, consistent with the rules presented above, the representation of the fugitive client in a civil matter does not require mandatory withdrawal, provided that such continued representation would not result in the violation of a Disciplinary Rule.
We note, however, that a lawyer retains the discretion to withdraw from the representation under any of the circumstances described in the provisions of DR 2-110(C).
Subject to the caveats set forth above, we answer the questions presented in the affirmative.