Summary: Attorney Larry Douglas Friesen pled guilty to three counts of willfully failing to pay income and FICA taxes to the Internal Revenue Service (IRS) in federal district court. His sentence included thirty-six months of probation, including forty-five days of weekend incarceration, and one hundred and eighty days of house arrest beginning the first Monday following his last weekend of incarceration. He was also required to use a GPS monitoring device during this period. During the one hundred and eighty day period, the Respondent was authorized to leave his residence for employment, among other things. In addition he was required to pay $209,673.00 in restitution and an assessment of $75.00. He was ordered to make monthly payments on the restitution equal to the lesser of $300.00 or 10% of his monthly income beginning thirty days after the end of incarceration.
Pursuant to Rule 7.2 RGDP, the Oklahoma Bar Association forwarded certified copies of the sentencing documents to the Oklahoma Supreme Court and an immediate interim suspension of Friesen's license to practice law was instated in October, 2014. The matter was then heard by the Professional Responsibility Tribunal (PRT) in a December 2014 evidentiary hearing. At this hearing Friesen presented evidence that his CPA had embezzled significant funds from him, and that other factors served to mitigate his actions in the non-payment of taxes. The PRT recommended that Friesen's interim suspension be lifted and he receive a deferred suspension of two years and one day subject to compliance with his probation. It recommended that if Friesen violated the terms of his probation, the General Counsel of the Oklahoma Bar Association should be directed to immediately notify this Court and the suspension of two years and one day should be imposed from the date of the violation.
Legal Issues: The Oklahoma Supreme Court is directly responsible for the accreditation of attorneys in the state of Oklahoma. This is accomplished through the Oklahoma Bar Association and its enforcement of the Oklahoma Rules for Professional Conduct for Attorneys ("ORPC"). If an attorney is alleged to have violated the ORPC, the Oklahoma Bar Association investigates as outlined in the Rules Governing Disciplinary Proceedings ("RGDP").
Because the change of status of an attorney from 'good standing' to 'not a licensed attorney' is of public significance, all attorney licensure matters are published, regardless of whether a novel legal question is involved.
As one would expect, an attorney is required to obey the laws of the federal and state tax codes. ORPC 8.4 (b) prohibits an attorney from committing a "criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects." Thus matters such as routine traffic tickets or even a single DUI are not necessarily actionable. The commentary to the rule notes: "Although a lawyer is personally answerable to the entire criminal law, a lawyer should be professionally answerable only for offenses that indicate lack of those characteristics relevant to law practice. Offenses involving violence, dishonesty, breach of trust, or serious interference with the administration of justice are in that category. A pattern of repeated offenses, even ones of minor significance when considered separately, can indicate indifference to legal obligation."
The Oklahoma Supreme Court refrained from ruling that the failure to pay taxes of itself indicated unfitness to practice law. However, the Court did find that Friesen had both withheld payroll taxes from his employees and then failed to pay those taxes, and that this failure reflected poorly on Friesen's fitness to practice law.
However, the Court went on to note that the appropriate level of punishment is determined on a case-by-case basis and appeared to find merit in the mitigating factors urged by Friesen, i.e. that much of the financial turmoil in his firm originated from an embezzling CPA and other facts that were outside Friesen's control. The Court terminated his immediate interim suspension and reinstated him to good status, with the proviso that further discipline could be entered against him if he did not comply with his probation and associated reimbursments.
Discussion: At the end of the day, every attorney bears responsibility for the management of their practice. However, the Court seems to recognize that sometimes a 'perfect storm' can happen, resulting in results that are out of line with the lack of attention that the attorney has given to his law practice's management.
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