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VSB affidavit can be used in prosecution

Peter Vieth//May 29, 2021

VSB affidavit can be used in prosecution

Peter Vieth//May 29, 2021

A former lawyer accused of defrauding two elderly clients may be confronted on the witness stand with the Virginia State Bar affidavit she signed when she agreed to give up her law license in 2019, a Lynchburg federal judge has ruled.

In a May 21 opinion, U.S. District Judge Norman K. Moon said prosecutors may use the incriminating affidavit for impeachment purposes. He did not rule out allowing it for other purposes at trial.

In the affidavit, former Lynchburg attorney Cherie A. Washburn admitted she misappropriated “substantial amounts of money” from an elderly ward.

It’s a case of first impression, said Washburn’s attorney, Paul G. Beers of Roanoke.

“Any lawyer representing a lawyer has got to know that opinion,” Beers said of Moon’s ruling.

Moon’s eight-page opinion is U.S. v. Washburn (VLW 021-3-268).

Rule bars use as ‘admission’

The government has charged Washburn with taking at least $233,262.27 in fraudulent transfers from the accounts of two elderly women she had agreed to help. Licensed in 2011, Washburn held herself out as specializing in elder law and estate planning, according to Moon’s opinion. The women allegedly signed forms giving power of attorney to Washburn in 2015 and 2016.

An indictment charges that Washburn regularly misappropriated money from both women beginning in the fall of 2017. She allegedly cashed or diverted checks made out to the women and wrote checks to herself and wired money to her personal account.

Washburn’s alleged misdeeds came to light in 2018. A civil lawsuit accused her of embezzlement of a ward’s money and property. Washburn denied some of the allegations in the civil action, but she agreed the next year to give up her law license.

She was indicted in federal court in October.

Under rules promulgated by the Supreme Court of Virginia, an attorney facing a discipline complaint may consent to revocation, but only after acknowledging under oath that the material facts underlying the misconduct allegations are true.

Accused lawyers might take some comfort in the next provision of the rules: “The admissions offered in the affidavit consenting to Revocation shall not be deemed an admission in any proceeding except one relating to the status of the Attorney as a member of the Bar.” The consent to revocation provisions are in Paragraph 13-28 of the procedural rules governing the Virginia State Bar.

It was not clear if Washburn was represented by counsel when she acknowledged the bar allegations.

It’s not the first time a Virginia lawyer has tried to keep his VSB disciplinary admissions out of criminal court. Former Norfolk attorney Troy Titus hoped to block use of his VSB stipulation when he went on trial for fraud in Norfolk. The trial court allowed the Titus stipulation into evidence, in part because it tended to show Titus was confused about his clients’ finances.

“[I]t is clear that the district court thoughtfully balanced the probative value of the stipulation against its potential for prejudice, and we will not second-guess that balancing,” the 4th U.S. Circuit Court of Appeals wrote in 2012, affirming use of the stipulation.

Neither the Titus trial court nor the Fourth Circuit considered the VSB rule on admissions, Beers said.

‘Balancing’ test

Washburn sought a ruling barring any mention or use of her VSB affidavit in front of the jury based on “substantial comity and strict enforcement” of the VSB rule against use of the affidavit as an admission.

As counsel, Beers argued that prosecutors’ use of the affidavit would undermine state judicial policies and offend “fundamental principles of comity.”

“She was promised that those admissions would not be used against her in any proceeding,” Beers argued at a May 21 hearing, before Moon entered his opinion.

Moon suggested that statement might be overly expansive.

“It seems to me it’s not an admission of guilt by her,” Moon said, interpreting the rule language.

The government contended the Washburn affidavit was admissible as substantive evidence, but prosecutors said they did not “currently intend” to introduce the affidavit in its case-in-chief. They would use it only if Washburn testified inconsistently in her own defense, they said. Moon said such use would not “run afoul” of the VSB rule.

“Notably, the Rule does not include a broader and more general prohibition against any other use of the affidavit,” Moon said.

The VSB rule differs from a statute prohibiting information furnished to the state Workers’ Compensation Commission from being used in “any judicial or administrative proceeding” other than a WCC action, Moon said.

Federal interests prevail over the interests of VSB prosecution, Moon concluded. “In other words, accepting the laudable and valuable purposes of the Rule articulated by Defendant in ensuring the swift resolution of VSB complaints, the Court finds that the federal interests in enforcing the federal criminal law and ensuring that the defendant not be provided ‘a shield against contradiction of his untruths’ outweigh any contrary state interests,” Moon wrote, citing a 2009 U.S. Supreme Court ruling.

Moon directed the government to notify Washburn’s counsel 30 days before trial if it intended to use the affidavit in its case-in-chief.

“This ruling addressed a question of first impression in Virginia,” Beers said. “Lawyers who are considering consenting to revocation of their law licenses need to be directed to Judge Moon’s opinion before they submit an affidavit to the State Bar in which they make admissions about their professional conduct,” he added.

The U.S. attorney’s office declined to comment on Moon’s decision.

Bar Counsel Renu Brennan – the chief ethics prosecutor for Virginia lawyers – was unavailable for comment on whether Moon’s ruling would affect the handling of bar discipline matters.

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