Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
David Friedman,Justice Presiding, Luis A. Gonzalez, James M. Catterson, Karla Moskowitz, Helen E. Freedman, Justices.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Gerald A. Eppner, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the Second Judicial Department on March 22, 1967.
Respondent Gerald A. Eppner was admitted to the practice of law in the State of New York by the Second Judicial Department on March 22, 1967. At all times relevant herein, he has maintained an office for the practice of law within the First Judicial Department.
On December 13, 2006, respondent pleaded guilty in New York City Criminal Court to two counts of failure to file income tax returns for the tax years 2003 and 2004 in violation of New York Tax Law § 1801(a), a class A misdemeanor, and on that date he was sentenced to a conditional discharge and a fine totaling $20,000.
By unpublished order entered September 7, 2007, we deemed the offense of which respondent had been convicted to be a "serious crime" as defined by Judiciary Law § 90(4)(d) and 22 NYCRR 603.12(b), and directed a Hearing Panel to conduct a hearing as to the appropriate disciplinary sanction.
At the hearing, respondent admitted that although he pled guilty to failing to file state tax returns for 2003 and 2004, he also failed to file both New York State and Federal tax returns for the years 2001, 2002 and 2005. Since the entry of his guilty plea in December 2006, respondent has filed all of his delinquent Federal and state tax returns and has made considerable efforts to repay his outstanding tax liability.
Respondent attributed his failure to file and pay taxes to a significant increase in expenses and an unexpected drop in income which resulted in a substantial cash flow problem. Respondent explained that during the 1980s and 1990s, he experienced a significant increase in unforeseeable and extraordinary expenses related to his efforts to reunite with his three children from his first marriage from whom he had been estranged. These expenses included, among other things, the need to buy a larger home to accommodate the children from his first marriage, tuition expenses incurred by his children and the fact that he had to pay $350,000 in legal damages incurred by one his sons.
Moreover, beginning in the early 2000s, the respondent experienced an unexpected decrease in income due to a March 2000 market downturn. The decrease in income was further aggravated by the events of September 11, 2001, a capital call at his law firm, and a lack of virtually any IPO and venture capital financing work which was his area of practice.
Respondent believed that, because he did not have the money to pay the taxes, he could not file his returns. Thus, he failed to file his tax returns for 2001, and finding himself in a similar situation the following year, he again chose to forgo filing his taxes for 2002, 2003 and 2004.
Upon turning 65 years old in 2004, respondent was required to retire pursuant to the informal policy of the law firm where he worked. Although he remained as counsel, he suffered an even greater decrease in income, and did not file his taxes for 2005. In December 2005, he became counsel at a different law firm until early 2007. Respondent is currently a solo practitioner with a small number of clients and also conducts business activities in which he gives legal advice, generally to those at the senior executive level, and provides business development consultation.
Respondent called a former colleague who has known respondent since 1999 to testify for him. The former colleague vouched for respondent's integrity and expertise as an attorney, testified that he had worked directly with respondent at the time of his tax issues and those difficulties did not detract from respondent's commitment to ethically and competently serve his clients, and that no client suffered or was harmed by respondent's personal tax issues. Throughout the hearing, respondent acknowledged the wrongfulness ...