Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Rich

Supreme Court of New York, First Department

December 21, 2017

In the Matter of Stuart I. Rich, an attorney and counselor-at-law: Attorney Grievance Committee for the First Judicial Department, Petitioner, Stuart I. Rich, (OCA Atty. Reg. No. 2446375), Respondent.

          Jorge Dopico, Chief Attorney, Attorney Grievance Committee, New York (Raymond Vallejo, of counsel), for petitioner.

          Michael S. Ross, Esq. for respondent.

          Angela M. Mazzarelli, Justice Presiding, Richard T. Andrias Judith J. Gische Troy K. Webber Ellen Gesmer, Justices.

          PER CURIAM.

         Disciplinary proceedings instituted by the Attorney Grievance Committee for the First Judicial Department. Respondent, Stuart I. Rich, 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 4, 1992.

         Respondent Stuart I. Rich was admitted to the practice of law in the State of New York by the Second Judicial Department on March 4, 1992. At all times relevant to this proceeding, he has maintained a law practice within the First Judicial Department.

         By joint motion for discipline by consent, pursuant to the Rules for Attorney Disciplinary Matters (22 NYCRR)§ 1240.8(a)(5), the Attorney Grievance Committee and respondent request that this Court impose discipline based upon the stipulated facts and consent of the parties and that respondent be suspended from the practice of law, in the State of New York, for a period of one year and until further order of this Court.

         The joint affirmation and stipulation of facts filed by counsel for respondent and the Committee recount the basis for this proceeding, which involves respondent's failure to pay taxes on income he received during his tenure as an equity partner at a law firm, from which he resigned on April 17, 2016. During that tenure, respondent received income and Schedule K-1 tax forms from the firm. Respondent was aware that, because his income was not subject to withholding of taxes, he was required to make quarterly estimated tax payments, and that he was obligated to file personal income tax returns and pay taxes to the New York State Department of Taxation and Finance (Tax Department) and the Internal Revenue Service (IRS). During the taxable periods of January 2008 through December 2014, respondent made only partial estimated tax payments to the Tax Department and the IRS. In addition, he failed to file both state and federal personal income tax returns for seven years, namely tax years 2008 through 2014.

         Sometime in 2015, respondent received a letter from the Tax Department notifying him that its records reflected that he had not filed his State personal income tax returns and requesting a meeting. In May 2015, following the meeting, respondent filed his New York State tax returns for tax years 2008 through 2012 and, in June 2015, he filed his returns for tax years 2013 and 2014, but he did not pay his tax liability. In March 2016, the New York County District Attorney's Office questioned respondent regarding his New York State tax filings and outstanding liability. Immediately thereafter, he retained counsel who entered into negotiations in connection with the criminal investigation. On May 24, 2016, respondent executed a closing agreement with the Commissioner of the Tax Department pursuant to which he agreed to remit $1, 194, 706.49 on or before June 2, 2016 in full payment and satisfaction of his New York State tax liability, plus penalties and interest, calculated through May 31, 2106. The next day, respondent voluntarily surrendered and was charged in a Superior Court information with criminal tax fraud in the second degree (four counts), criminal tax fraud in the fifth degree (one count), and repeated failure to file personal income and earning taxes (four counts) in violation of the New York State Tax Law.

         On June 2, 2016, respondent pleaded guilty in Supreme Court, New York County, to criminal tax fraud in the fifth degree in violation of New York State Tax Law § 1802, a class A misdemeanor, for his willful failure to timely file his personal income tax returns for New York State for the years 2008 through 2014. Respondent admitted that as a result of his failure to file his taxes, he intentionally evaded paying his tax liability to the New York State government. Also on June 2, 2016, respondent was sentenced to a one-year conditional discharge, without supervision, and was ordered to pay $1, 194, 706.49, pursuant to the closing agreement he had entered into with the Tax Department. At sentencing, respondent made this payment to the Tax Department. Respondent did not have sufficient personal funds to make the payment so he borrowed the funds from a close friend, pursuant to a written personal loan agreement.

         On June 29, 2016, pursuant to Judiciary Law § 90(4), respondent notified this Court and the Committee of his conviction and on September 21, 2016, he was served with a "serious crime" petition. By order dated November 16, 2016, this Court deemed his conviction a "serious crime" and appointed a referee to hear and report on the appropriate sanction.

         As noted above, respondent failed to file his federal personal income tax returns for tax years 2008 through 2014, and made only partial estimated tax payments for those years. Also, although he filed his federal returns for 2006 and 2007, he did not fully pay the federal government for his tax liabilities for those years. In May and June 2015, respondent filed his federal personal income tax returns for tax years 2008 through 2014 (this is the same time period as when he filed his New York State returns). The federal government has not taken any criminal action against respondent and he is currently working with the assistance of an accounting firm to reach an offer in compromise with the IRS to settle his tax liabilities and related interest and penalties for tax years 2006 through 2014, which he estimates will total approximately $1.2 million. In July 2016, a month after his State conviction, respondent paid $240, 000 to the U.S. Treasury as an initial payment on the offer of compromise. Although respondent does not have sufficient personal funds to pay his federal tax debt, the same friend who loaned him money to satisfy the state liability has agreed to loan him the funds to make payment on the offer in compromise.

         On April 18, 2016, prior to his voluntary surrender, respondent resigned from his law firm and he has not practiced law since. In May 2016, respondent formed a business consulting business that services individuals and entities involved in the hospitality and entertainment industries, which he operates out of his apartment. To date he has earned approximately $5, 000 in consulting fees.

         As required, respondent has submitted an affidavit in which he conditionally admits the foregoing facts, and that those facts establish that he has violated the New York Rules of Professional Conduct (22 NYCRR 1200.0) by committing a ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.