The Virginia State Bar Disciplinary Board had jurisdiction to discipline a state bar associate member.
Further, substantial evidence supports the board’s determination that he violated several provisions of the Ohio Rules of Professional Conduct.
The board’s order that his law license be suspended for four years is affirmed.
Robol obtained a Virginia law license in 1979 and, except for a one-year period, was on active status until 2016, when he took associate member status. Individuals taking associate status pay one-half the regular bar dues and cannot practice law.
Robol “was also licensed to practice law in Ohio from 1996 until 2019, when the Supreme Court of Ohio accepted Robol’s application for retirement or resignation with disciplinary action pending.”
Thompson retained Robol to represent him relating to the search and salvage of the S.S. Central America, which sank during an 1857 hurricane. Thompson was able to recover millions of dollars in gold coins, bars and ingots from the wreck of the Central America in 1988.
During Robol’s representation of Thompson and his various entities, inventories relating to recovered gold were prepared. A 1991 inventory was prepared to obtain a bank loan. Robol included the 43-page inventory in his loan letter to the bank.
The so-called “Holabird Inventory” was prepared in 1997 in connection with admiralty litigation in the Eastern District of Virginia. Robol represented Thompson and one of his entities in that litigation.
The disciplinary action in Virginia arises from federal court litigation in Ohio. In 2005, DPC, an investor the gold recovery effort, sued Thompson and two of his companies, CX and RLP, because it “had not realized a return on its investment.”
The Ohio federal court issued a consent order requiring defendants to provide DPC’s forensic accountant, KPMG, access to documents related to the inventory and sale of recovered gold.
The Ohio federal court twice held defendants in contempt for violating the consent order. In response, defendants provided an inventory of gold sold to CGMG in 2000 (CGMG Inventory).
In 2007, Robol personally told the Ohio federal court that the CGMG inventory “was the only one they possessed.”
The federal court then issued an order that asked for “‘anything that could be construed as an inventory of any kind regarding assets recovered from the shipwreck.’”
Defendants “disclosed the existence of the ‘Holabird Inventory’ that had been commissioned by the Virginia District Court during the admiralty litigation in 1997, although they claimed not to have a copy of it.”
The Ohio federal court ordered Robol to obtain a copy. Robol appealed to the Sixth Circuit. The federal appeals court denied Robol’s request for a stay and dismissed the appeal. Robol did not provide KPMG with the Holabird Inventory until 11 months later.
Eventually, CX and RLP went into receivership. The receiver went through the companies’ files and “discovered multiple original inventories of the treasure.” DPC moved for sanctions.
“The court held there was clear and convincing evidence to conclude Robol unreasonably relied on his clients and acted willfully to blind himself from the truth of his and his clients’ possession of other inventories.
“The court found that Robol did not adequately participate in and oversee the collection process, and that he did not exercise sufficient oversight. Significantly, the court also found that Robol did not make the required ‘reasonable inquiry’ such that the court could conclude his reliance on his clients’ assertions was appropriate under the totality of the circumstances.
“The totality of the circumstances included Robol’s personal awareness of the existence of other inventories, due to his longstanding role as counsel to the defendants. …
“The court concluded Robol acted in bad faith by representing to the court and the Sixth Circuit, on multiple occasions, that his clients had no other inventories and that no other inventories even existed.”
The court awarded DPC sanctions, stating that “DPC had proven that Robol, an officer of the court, had committed misconduct ‘directed at the judicial machinery itself,’ and had deceived the court.”
The Sixth Circuit affirmed the Ohio district court’s rulings.
Virginia Bar proceedings
In February 2020, the Virginia Bar instituted discipline proceedings against Robol. At a hearing, “Robol admitted he was aware of the 1991 Inventory and the Holabird Inventory. Robol testified Thompson’s company operated on a need-to-know basis, and inventories were viewed as trade secrets.
“Thompson had a policy that only one inventory existed at a time. When a new inventory was prepared, the old inventory was destroyed. Robol testified he had paid the full amount of the sanctions ordered by the Ohio District Court. He reiterated that, at the time he made the representations to the Ohio courts, he did not believe the company possessed any other inventories.”
The board concluded there was clear and convincing evidence that Robol violated several provisions of the Ohio Rules of Professional Conduct.
Authority to discipline
“Robol argues the Board lacked authority to discipline him because he was an associate member of the Virginia Bar and not actively providing legal services in Virginia. He contends an associate member is essentially a ‘non-lawyer’ and not subject to discipline by the Virginia State Bar. We reject this argument. …
“Following Robol’s argument to its conclusion reveals its absurdity. Despite findings by the Ohio District Court and the Sixth Circuit that Robol engaged in bad faith and fraudulent conduct, the Bar would be without any power to regulate him because he was not an active member of the Bar. Robol could then reactivate his membership, thereby escaping any accountability for his actions while an associate member. …
“Accordingly, we hold the Bar acted within its authority when it pursued disciplinary action against Robol for actions committed while he was an associate member of the Bar.”
“[W]e conclude the Board did not err when it determined Robol violated Rules 3.3, 3.4, 4.1, and 8.4 of the Ohio Rules of Professional Conduct.
“Ohio Rule 3.4 … governs ‘Fairness to Opposing Party and Counsel[.]’ … The Board found that Robol violated this rule by failing to produce the Holabird Inventory once the Virginia District Court authorized its release, and by pursuing a baseless interlocutory appeal of the Ohio District Court’s order requiring production of the inventory. …
“Even if Robol had a good faith basis to initially withhold the document pending his request for a stay and his appeal of the Ohio District Court’s order, the Sixth Circuit dismissed his appeal in February 2008. Robol, however, did not attempt to tender the Holabird Inventory to KPMG until August 2008. Robol has provided no explanation for this delay. …
“Ohio Rule 3.3 governs ‘Candor toward the Tribunal[.]’ … Ohio Rule 4.1 governs ‘Truthfulness in Statements to Others.’ … Ohio Rule 8.4 governs ‘Misconduct’” and provides, in part, that professional misconduct includes
“‘[e]ngag[ing] in conduct involving dishonesty, fraud, deceit, or misrepresentation; [e]ngag[ing] in conduct that is prejudicial to the administration of justice.’
“Robol never argued to the Board that it should apply the specific Ohio legal standards he now sets forth. Yet, even when those standards are applied to these facts, the Board’s holdings are supported by the record. …
“Robol repeatedly made statements to the Ohio District Court and the Sixth Circuit that he knew were false. These actions caused significant delays in the resolution of the Ohio litigation, and additional costs to all the parties, which was prejudicial to the administration of justice.”
Robol v. Virginia State Bar, Record No. 210054 (Mims) Jan. 6, 2022. From the Virginia State Bar Disciplinary Board. Richard Thomas Robol, pro se. Robert B. McEntee, III, Assistant Attorney General (Mark R. Herring, Attorney General of Virginia, on brief), for appellee. VLW 022-6-002, 21 pp.