In re Barry Downey
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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 08-BG-1160
IN RE B ARRY K. D OWNEY, R ESPONDENT.
A Member of the Bar
of the District of Columbia Court of Appeals
(Bar Registration No. 416968)
On Motion to Stay Interim Suspension
(BDN 338-08)
(Decided December 4, 2008)
Aron U. Raskas and Andrew Jay Graham were on the motion to stay.
Wallace E. Shipp, Jr., Bar Counsel, and William R. Ross, Assistant Bar Counsel,
were on the opposition to the motion to stay.
Before B LACKBURNE-R IGSBY, Associate Judge, F ARRELL, Associate Judge, Retired,
and P RYOR, Senior Judge.
P ER C URIAM: Respondent Barry K. Downey was admitted to the bar of this court in
1989. He is a principal in the firm of Smith and Downey, focuses his practice on employee
benefits law, has provided pro bono services throughout his legal career, and is active in his
church and its charitable endeavors. Mr. Downey has not been the subject of disciplinary
proceedings in this or any other jurisdiction before this case. However, on July 21, 2008,
he pleaded guilty to engaging in the business of money transmission without a license, a
felony, in violation of D.C. Code § 26-1002 (2001).
2
The Statement of Offense filed in the U.S. District Court for the District of
Columbia, to which respondent has stipulated as part of his plea, demonstrates that he is the
co-founder and a director of a company called e-gold, Ltd., and is the Secretary, VicePresident, and Director of another company, Gold & Silver Reserve, Inc. The former is an
alternative payment system operated over the internet, and the latter is the parent company
of e-gold. Respondent was not actively involved in the day-to-day operation of the money
transmission businesses because he lives in Maryland and they operate primarily in Florida;
but he did participate in developing the business model for the companies, including
assuring that they complied with federal and state law.
Because his expertise is in
employee benefits, he consulted another attorney in this regard, who confirmed his belief
that the companies did not have to be licensed as money transmission businesses. The
United States government, however, disagreed and charged him as indicated above.1
Respondent accepted the government’s plea offer, acknowledging that his legal
advice regarding compliance had been incorrect and that the businesses had been operating
without the required licenses. He promptly reported his guilty plea to the Office of Bar
Counsel, and he and his business partners have taken steps to see that the companies are
properly licensed and monitored, and have ceased operating them in the meantime.
1
While there is no allegation of any such impropriety by either of the companies or
respondent, businesses of this type are of concern to the government because of their
money laundering potential.
3
On September 17, 2008, Bar Counsel notified this court of respondent’s guilty plea
to a “serious crime,” as defined by D.C. Bar R. XI, § 10 (b). Normally, this court would
have temporarily suspended respondent, but before such an order was issued he filed a
motion to stay that action. Bar Counsel has filed an opposition.
This court’s rules provide that upon the filing of a certified copy of a docket entry or
record demonstrating that a member of its bar has pleaded guilty to a “serious crime,”
which includes any felony, the member will be immediately suspended from the practice of
law pending final disposition of the disciplinary proceeding. D.C. Bar R. XI, §10 (b), (c).
However, for “good cause shown,” the court may “set aside such order . . . when it appears
in the interests of justice to do so.” Id. § 10 (c). In another context, we have said that
“good cause is to be determined ‘in light of the circumstances of each case[].’” 2 That
principle should apply in this context as well. But, because we have not had occasion to
discuss before the considerations that guide application of Rule 10 (c)’s set-aside provision,
we do so briefly here. We grant the motion for a stay.
“The temporary suspension of an attorney pending the completion of disciplinary
proceedings has the same effect as a preliminary injunction barring the attorney from the
2
Restaurant Equip. & Supply Depot, Inc. v. Gutierrez, 852 A.2d 951, 956 (D.C. 2004)
(citation omitted).
4
practice of law.” In re Malvin, 466 A.2d 1220, 1223 (D.C. 1983) (discussing then D.C. Bar
R. XI, § 3 (3), which allowed temporary suspension where an attorney “appear[ed] to be
causing great public harm by misappropriating funds to his own use, or by other means”).
Because respondent has been convicted of a “serious crime,” Rule XI, § 10 (c) requires him
to show “good cause” why the suspension order that would otherwise issue as a matter of
course should be stayed or “set aside.” Respondent’s contrary suggestion that, as in
Malvin, the burden here is on Bar Counsel to justify his interim suspension is contrary to §
10 (c)’s language and ignores his conviction for a serious crime. The respondent in Malvin
had not been so convicted when Bar Counsel sought his emergency suspension.
That
difference in situations explains the differing assignment of burden of proof in the two
cases.
Nevertheless, the concrete factors we considered in Malvin may properly be taken
into account in deciding whether respondent has shown good cause to stay the suspension
which § 10 (c) would otherwise require. Specifically, we must ask (1) whether allowing
him to continue to practice poses an undue risk of harm to the public; (2) whether there is a
substantial likelihood, based on the available evidence, that the disciplinary proceeding will
result in imposition of a “significant sanction”; (3) whether “the balance of injuries” favors
stay of the suspension; and (4), related to all these, whether “a suspension is in the public
interest.” See 466 A.2d at 1223.
5
Applying these considerations, we conclude that respondent has shown good cause
for the court to stay the interim suspension. His prior unblemished record as an attorney;
his plea of guilty to what amounts to a strict liability offense involving no scienter or moral
turpitude; and the fact that his violation arose from conduct outside of his normal legal
practice all suggest a very low degree of risk that permitting him to practice in the interim
will harm the public. For the same reasons, but subject of course to development of a
factual record in the disciplinary process, we think that the likelihood that respondent will
receive a significant sanction, i.e., a suspension (if at all) of more than brief duration, is
very small. Stated differently, there is a reasonable possibility on this record that interim
suspension might exceed the sanction that will eventually be imposed on respondent.
Considering, finally, the harm to respondent’s livelihood and ability to support his family
that interim suspension may entail, we conclude that respondent has met his burden to show
good cause for why the court should stay its hand.
Accordingly, we grant respondent’s motion to stay the suspension that § 10 (c)
would otherwise require, without prejudice to Bar Counsel’s moving to vacate the stay after
the Board on Professional Responsibility’s report and recommendation has been filed.
So ordered.
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