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Elizabeth Warren 2002 – Working on at least 10 private legal matters

Elizabeth Warren 2002 – Working on at least 10 private legal matters

Represents her office is in Cambridge, MA

Defenders of Elizabeth Warren’s failure to obtain a Massachusetts law license have argued that Warren did not operate an office for the practice of law or maintain a systematic and continuous presence in Massachusetts for the practice of law because all she allegedly did was help write a few Briefs in the Supreme Court and out-of-state federal courts.

Michael Fredrickson, General Counsel of the Massachusetts Board of Bar Overseers even took the unusual move of giving media interviews defending Warren before any investigation, suggesting that a law professor who merely “dabbles” in legal consulting doesn’t need to be licensed.  Fredrickson later clarified that he merely was expressing a personal opinion, and that he really didn’t know much about Warren’s practice.

The Warren campaign refuses to detail the full scope of Warren’s private legal activities from her Cambridge office, but details are being uncovered day by day.  Much as with Warren’s history of “checking the box,” Warren’s campaign makes categorical statements, refuses to release records, and waits to see if others will be able to find details and documents.

The evidence mounts day by day that Warren did a lot more than “dabble” in the practice of law from her Massachusetts office.   Among other things, Warren represented to the Texas Bar that Cambridge was her “primary practice location,” in 2002 billed over $14,000 for “professional legal services” in the GAF bankruptcy case,  and even entered a court appearance for a Massachusetts client in 2001 on Massachusetts legal issues in a federal court in Massachusetts.

More details are coming out about the extensive nature of Warren’s private practice.

In a March 20, 2002, Verified Statement (embedded at bottom of post), Warren submitted in the Kaiser Aluminum bankruptcy, Warren detailed for the Court the extensive nature of her law practice at that time, which included at least 9 bankruptcy matters plus other legal work.

Interestingly, Warren disclosed that she had advised Dow Chemical Company, in keeping with a long history of representing large corporate entities:

10. …. In addition to these academic and legislative activities, have consulted with a number of companies on mass tort issues. I served in an advisory capacity to Dow Chemical, the parent company of Dow Coming, in the early days of the Dow Coming bankruptcy I have assisted the Johns Manville ‘rust and the National Gypsum Trust in appellate litigation. I have been an expert witness on behalf of the National Gypsum Trust and the Fuller Austin trust.  These trusts were formed as part of the confirmation of a plan of reorganization in mass tort asbestos bankruptcies. I have assisted in the preparation for petitions for certiorari to the United States Supreme Court in two cases involving future claims, one in an environmental context and one in an employee liability context. I have argued a case on behalf of Fairchild Aviation, an airplane manufacturer facing future claims liability. I have filed an amicus brief in future claims litigation involving Piper Aircraft. [Note – it appears there was a paragraph numbering problem in the original, and that the above paragraph was supposed to be numbered “11”]

12. In addition, I am working with Caplin & Drysdale as a consultant in Chapter 11 proceedings involving the Babcock & Wilcox Company, Pittsburgh Coming Corporation, Owens Coming Corporation, Armstrong World Industries, Inc., W.R. Grace & Company, G-1 Holdings, Inc., United States Gypsum Corporation, Federal-Mogul Global, Inc. and North American Refractories Company.

In addition to the nine bankruptcy cases, we also know that Warren was working on the  FCC v. Nextwave Communications case detailed in my original post.  Even if none of the additional matters listed in paragraph 10 of Warren’s Verified Statement were active in 2002, that would mean Warren was involved in handling a minimum of 10 active private legal matters during 2002.

That hardly is “dabbling” in the practice of law.  Of course, there may be more, but the Warren campaign will not disclose anything other than the few Supreme Court briefs she worked on.

It is significant that Warren informed the Court in the opening paragraph that she was admitted in Texas, but did not inform the Court that she had been on inactive status since 1992.  Additionally, Warren designated her Cambridge location as her office in connection with this retention:

There are other interesting details in the Verified Statement which will be explored in future posts, such as the Harvard disclosure and reporting requirements, the guidelines limiting faculty to spending 20% of their time on non-law school related matters, and this admonition from the Harvard Law School Faculty Manual in effect in 2001-2002 against the unauthorized practice of law:

The investigation will continue.

[Special thanks to Morgen Richmond, who used to blog at Verum Serum, for helping locate documents referred to here and which will be referred to in upcoming posts.]

In Re Kaiser – Elizabeth Warren Verified Statement by Legal Insurrection


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ShakesheadOften | September 28, 2012 at 8:53 am

But…but…but I’m for the middle class! It’s my family heritage! But…but…but…

We can’t thank you enough, Prof Jacobson, for not giving up in the face of intense criticism and derision. A series of good deeds right at the beginning of the New Year.

On Sunday you said you had nothing to say. Elizabeth Warren wishes it remained that way. What a fun-filled week it’s been here.

One concern in following this is that Prof. Warren and her campaign could establish a ‘narrative’ to handle this; that narrative would be “this is all just technical, inside-baseball nattering about complex legal matters”.

You know, complex matters like being properly licensed and disclosing truthfully where one practices.

But don’t worry, the Boston Globe, NYT and the rest of the media will jump on that narrative and make it their own.

Even more interesting is her clientele. Dow Chemical? GAF? Johns Manville? Isn’t it only greedy evil conservative corporate lawyers who do that? I guess the money was too good to pass up.

The money is the key. From representing corporate clients from her Harvard office to flipping houses in distressed neighborhoods, Ms. Warren has a nose for a buck. I continue to think that a careful review of schedule C on her released tax returns would be useful.

Prof. Warren is not just an arrogant, ethically-challenged progressive politician. She’s a greedy one. There’s a story there.

    Ragspierre in reply to stevewhitemd. | September 28, 2012 at 9:07 am

    I’m hoping that Brown takes this to her in a big way.

    It would not be hard for Warren, in debate, to dazzle Brown with BS…

    BUT that gets her on the record. Think of it like a deposition. When people are lying in deposition, you don’t argue…you let them lie on the record. All they want.

      stevewhitemd in reply to Ragspierre. | September 28, 2012 at 10:26 am

      Be careful. A debate is not a deposition; a deposition does not have a ‘moderator’ asking your opponent gift-wrapped questions that are used to establish a a narrative. And people tend to remember more what was said in the debate than in a 30 second ad afterwards.

      If I were Senator Brown I wouldn’t let Prof. Warren get away with anything in the debate. I’d call her on it, keeping in mind that people instinctively recoil from big men beating up on small women. He’ll have to be tactful and careful, but he has to nail each lie then and there.

        Ragspierre in reply to stevewhitemd. | September 28, 2012 at 11:03 am

        Steve, Brown won’t have enough information to “nail her”.

        She is a lawyer, and he isn’t. Just as you could BS me with medical jargon in the moment, so can she, I expect.

        But later, when I have MY medical expert dissect your BS, is when the pay-off comes.

        And deposition is an ADVERSARIAL event. You have another attorney there who listens for miscues, and asks questions on cross (essentially) to rehabilitate his/her witness.

        But, again, the process should be intended to get Warren lying early and often…as seems her wont.

          byondpolitics in reply to Ragspierre. | September 28, 2012 at 12:26 pm

          In fact, Scott Brown did go to law school & was admitted to the MA bar on 12/17/85. His current status is inactive (he is, after all, a Senator). He went to a much better law scholl than she did.

        Chris Mac in reply to stevewhitemd. | September 28, 2012 at 1:03 pm

        Scott Brown information:

        He is a practicing attorney, with expertise in real estate law, and served as defense counsel in the Judge Advocate General’s Corps of the Massachusetts Army National Guard. Brown is a graduate of Wakefield High School (1977), Tufts University (1981), and Boston College Law School (1985). From Wikipedia, but…

    9thDistrictNeighbor in reply to stevewhitemd. | September 28, 2012 at 9:56 am

    This reminds me so much of Hillary and her cattle futures.

    It’s understandable that most of Lizzie’s clients are giant corportions like Dow Chemical and W.R. Grace. Who else but a giant corporation could afford a lawyer who charges $675 an hour for her services?

    Prof. Warren is not just an arrogant, ethically-challenged progressive politician. She’s a greedy one. There’s a story there.


    Yes, I keep wondering if the reason she didn’t bother to get licensed in Massachusetts, or keep her licenses in Texas and NJ on active status, was simply a desire to avoid paying the higher bar fees and E&O policy premiums.

    Won’t it be ironic if her greed turns out to be her undoing?

      ThomasD in reply to Observer. | September 28, 2012 at 10:38 am

      There’s a story there.

      Not really,

      Man bites dog is a story. Progressives politician proves hypocritical, self aggrandizing hack is dog bites man.

      Lieawatha is a tool of the 1% and the OWS leadership just doesn’t care,who ever could have guessed.

I wish to be the first to congratulate Sen. Brown on his stunning (re: collapse of Elizabeth Warren) re-election as senator from MA and retaining the ‘Kennedy seat’ for Republicans.

Gold. You hit gold!!! A huge, massive mother lode! Excellent!!

Now, I hope and pray the good people of MA will see this lying fraud for who and what she is – a pathalogical, delusional woman who has lived a LIE…..all her life, it seems! – and NOT vote for her. (BTW-this assessment is all MY opinion, given the information revealed to-date. Who knows?! She may be proven a criminal, as well.)

Go Prof. Jacobson!!! And a HUGE thank you to all those working behind the scenes to make this information available to “The BIG [Legal] voice on the [blogging] Right.” Heh. 😉

Insurrection never felt so…..good AND Legal. 😀

    When I first read your comment I thought that Elizabeth Warren would get votes from pro-choice people and people who favor gay marriage no matter how despicable she is, but having read that Scott Brown is pro-choice and views gay marriage as settled law in MA, I think that social liberals can comfortably vote for Scott Brown.

For those of you out of state, the second debate between Scott Brown and Elizabeth Warren will be Monday, Oct. 1 in Lowell. It will be streamed online (see below).

According to a online newspaper, The Patch, “Brown has been pressing Warren to provide a list of her corporate law clients that he says she “earned nearly a quarter million dollars working for…in an effort to deny workers their just compensation and promised health care benefits.”

Warren called the Brown campaign’s scrutiny on these issues a “distraction.”

“Scott Brown has spent the last few weeks trying to talk about anything but his votes and his record,” Warren said in a statement. “The distractions need to stop.”

Instead, Warren has been campaigning to align Brown with “the big guys” over working families by bringing up Brown’s record on extending the Bush tax cuts.

“I am committed to voting to extend those tax cuts for middle class families,” Warren said. “Senator Brown already has voted against them and recently said that he wanted to make it ‘crystal clear’ that he will not vote to extend these tax cuts for middle class families unless the top 2% get even bigger tax cuts. That’s wrong.”

Monday night’s debate will be moderated by “Meet the Press” anchor David Gregory. It will begin at 7 p.m. and will be broadcast live on WHDH Channel 7, New England Cable News, WBZ-AM 1030 and WRKO-AM 680. It will be streamed online at and the Associated Press will provide a feed to its members.

Uumm, it’s not clear she represented Dow Chemical when she was in Mass.–Dow Corning filed for bankruptcy in 1995 as I understand it. And it looks like she had only one client in 2002 (Caplin & Drysdale).

…that narrative would be “this is all just technical, inside-baseball nattering about complex legal matters”.

But law professors and senators are supposed to deal with complex legal matters every day. I think these latest posts will resonate with al;l those profesionals who have to follow the rules.

Is Mass. one of those states where there are thousands of professionals who have to maintain licenses through training and professional fees? If I was a hairdresser who just paid my business license fee — or a teacher who sat through boring nonsense but manditory training just to keep my license, this would tick me off!

Brown needs to swrap all the Cherokee and Law License stuff into 3 points for the debate. 1.) She refuses to release federal forms she filed that would prove or disprove her gaming the Affirmative Action system and harming the very class of people it was designed to help; 2.) She’s out condemning big corporations taking advantage of the Middle Class but he turns that on her and says it’s WARREN who’s been helping large companies screw the Middle Class by gaming/using the legal system and earning $675/hour doing it and earning $350,000 for one course a year to explain that system to future Harvard lawyers–hardly a salary designed to help Middle Class students wanting to go to law school as tuition is so exorbitant they abandon those dreams; and 3.) Dismissing laws and rules governing lawyers that are designed to protect the public and the Middle Class from unlicensed and unethical lawyers as “technicalities” is NOT what MA voters need in a US Senator.

Professor Jacobson already has a full-time job at Cornell. How pathetic that he must research and cover this story because the MSM refuses.

“Even more interesting is her clientele. Dow Chemical? GAF? Johns Manville? Isn’t it only greedy evil conservative corporate lawyers who do that?”

Totally agree with this. I don’t know that she improperly held herself out as a Massachusetts lawyer, but she has clearly held herself out as champion of the 99%-ers and the OWS croed. What a bunch of rubes they are for backing this corporatist hack!

Combined with the whole fake-Indian thing, this lady may be a bigger fraud than John Edwards, and that’s saying a lot.

legacyrepublican | September 28, 2012 at 9:35 am

Let me paraphrase Warren:

If you have a law practice, you didn’t get there by yourself. The rest of us paid for your early education, the roads you traveled to get to class, passed the laws that set the standards for you to make money practicing law, and gave you the ability to appear in court for clients and get paid for it too.

And all we ask is that you pass the bar and get a license so we know you are legit. In other words, play by the rules. So why do you have a problem with that? Do you think you are better than us?

P.S. Wonder if Scott Brown will ask a similar question in Lowell?

    …If you have a law practice, you didn’t get there by yourself…

    Not only didn’t she get there by herself, but by cheating she took advantage of helps that were intended for others.

The Good Professor is also an outstanding Investigative Reporter. He deserves a Pulitzer Prize for this on-going research.

It looks extremely rocky for the Cambridge Whine this day….

the washington Post today does a nice job of discussing the evidnece of warren’s claims, see

but, then of course, compleletly sells out with these conclusions:

Brown said that Warren “checked the box claiming she was Native American” when she applied to Harvard and Penn, suggesting the Democratic candidate somehow gained an unfair advantage because of an iffy ethnic background. But there is no proof that she ever marked a form to tell the schools about her heritage, nor is there any public evidence that the universities knew about her lineage before hiring her.

The senator’s debate comments also suggest Warren actively applied for positions with Harvard and Penn, but the evidence suggests the schools recruited her because of her groundbreaking research and writings on bankruptcy. Harvard, in fact, did not give up on her after she first turned down a tenured position with the university.

Some might assume that Warren listed herself as a minority in the law school directories to attract offers from top schools, which would be a pro-active measure. The explanation that she was reaching out to other Native Americans — when she was merely listed as a “minority” — certainly appears suspicious, but there is no conclusive evidence that she used her status in the listing to land a job.

    george in reply to george. | September 28, 2012 at 10:20 am

    I am amazed (ok, not with WaPo) that they are taking Scott Brown’s “check the box” point literally.

    “there is no proof that she ever marked a form to tell the schools about her heritage”

    c’mon. It is a figurative comment meaning she actively promoted her (fake) minority status to get a benefit.

    this WaPo fact-checker is completely dishonest. Amazing (ok, not)

    george in reply to george. | September 28, 2012 at 10:46 am

    And this one was a really bellly-laugher

    “the evidence suggests the schools recruited her because of her groundbreaking research and writings on bankruptcy”

    it does? Harvard does take Rutgers Law grads as an immedaitely TENURED PROFESSORS without the Scarlet Knight being part of some affirmative action plan.

    This was an interesting point made by WaPo

    “But several news accounts during that period identified Fried as a conservative faculty member who downplayed the need for change. The Globe described him in April 1992 as an “outspoken defender of the beleaguered faculty appointments committee.””

    “Nonetheless, Fried showed signs of acquiescing around the time that he joined the faculty appointments committee. The Harvard Law Record asked him in a 1992 Q&A, “How aggressively is the appointments committee pursuing women and minority faculty members?” Fried replied, “Very.””

    “When asked by the Record whether he believed in affirmative action, Fried replied, “Yes.””

    creeper in reply to george. | September 28, 2012 at 11:34 am

    If she didn’t “check the box” howthehell did she get on the school’s list of “minorities”?

    Typical smokescreen from the WaPo.

    janitor in reply to george. | September 28, 2012 at 3:37 pm

    Brown said that Warren “checked the box claiming she was Native American” when she applied to Harvard and Penn, suggesting the Democratic candidate somehow gained an unfair advantage because of an iffy ethnic background. But there is no proof that she ever marked a form to tell the schools about her heritage, nor is there any public evidence that the universities knew about her lineage before hiring her.

    What transparent pretext. The “evidence” is crystal clear. As others have noted, Harvard Law does not hire graduates of lower-tier law schools to be professors.

    Elizabeth Warren herself has discounted that it was because of her [shoddy] research. She claimed that she was hired because she was a “good teacher”. Most lawyers can talk (many can “teach” as that’s not unrelated to writing a good brief or making a good argument), but be that as it may — as anyone who has gone through law school or grad school or any college can attest — teaching ability also is not high up there in the hiring criteria for professors.

Raquel Pinkbullet | September 28, 2012 at 10:00 am

Lieawatha claims relation to two tribes now, per her latest teevee spot. She is not only part Cherokee, but part Delaware Indian, too.

Only in MA could an out-and-out fraud like Fauxcahontas continue to run — and receive support.

Well, maybe also in CA and IL, but there ya go.

She’s as big a fake as Choom Boy, and that’s really saying something.

    casualobserver in reply to Raquel Pinkbullet. | September 28, 2012 at 10:22 am

    Just a kind reminder: Corruption and playing outside the rules is not limited to the Democrat Party. Sure, there may be some real great examples crappy ethics and even illegal activity lately from the left, but the GOP is not full of angels. Ever heard of Spencer Bachus, for example? Can you believe he has gotten national support from the party and from individuals just to cover his legal bills? For me, it’s never a good thing to push the idea of one side being more corrupt or one state or region being worse than another. That’s a battle that has plenty of evidence on both sides.

Raquel Pinkbullet | September 28, 2012 at 10:03 am

I’m afraid the scummier she is shown to be, the more attractive to masshole voters she will also be…

Look at Teddy he killed a woman, help his buddy Dodd sexually harass women, among Massholes he still was worthy of Sainthood.

I really think the only solution is we nuke MA off the map or sell it off to Canada. It’s too far gone.

    RP – so true. The Massholes (where I live) are truly brain-washed. truly.

    Look at Congessman Tierney. His wife plead guilty to laundering $7,000,000 for her gambler-organized crime brother just before last elction in 2010. Voters did not care. Tierney won by a landslide. This election, Tierney’s (ex) Bro-in-law, now convicted of gambling/money laundering, said Tierney knew all about it and Tienrey is a liar.

    The voters do not care. Tierney is DEM. he will win. By a lot.

    Look at the guy runnign for Barney Frank’s seat. 3rd gen Kennedy. Red hair. square jaw. No expereince. 30 something. he will win. He is annointed.

    How Scott Brown beat Coaxley remains an enduring, deep mystery for me.

      Victor Ward in reply to george. | September 28, 2012 at 10:24 am

      well, in running against Coakley, it helped that he was running against an annoying preachy female attorney who didn’t know how to run a campaign.

      damn, scott brown gets all the luck 🙂

        NC Mountain Girl in reply to Victor Ward. | September 28, 2012 at 12:30 pm

        Coakley had very heavy baggage connected with that modern day witch trail, the Fells Acres Day Care center sexual abuse case. If you recall so-called experts were allowed to conduct suggestive interviews with young children. The resulting stories went beyond preposterous. Long after most locals were certain innocent people had been sent to jail Coakley went out of her way to keep them incarcerated. Then she made sure the label of child abuser hung around their necks for the rest of their lives.

        Sending or keeping innocent people in jail is not good for a political career. Just ask Illinois politician Jim Ryan how the Nicarico murder prosecutions later derailed his career.

      casualobserver in reply to george. | September 28, 2012 at 10:25 am

      You are right, George, there are many reflexive voters in MA. But I’m finding more and more are registering as ‘unenrolled’ (independent) around me, and certain elections show the stranglehold is not as powerful as it used to be. Certain districts, sure. I wouldn’t count Tisei out (Tierney) or Bielat (Kennedy 3.0) just yet.

      After all, in some towns that voted overwhelmingly for Obama in 08 I see more than a few Scott Brown signs on lawns. It’s a start….

        Yes, it is a start. But there is a long, long way to go.

        Take my colleague at work. She is convinced that Obama is a jobs president and Romney wants to send all the job to China. She thinks Obama wants to create tax and other incentive to allow businesses to invest in America and create more jobs, and Romney wants to just help millionairs and billionaires get richer (his only real goal). Nothing could ever be said to change her DEM mind. She thinks BO handing out 12,000,000 free cell phones is “fair” and needed so the poor can use the phones to get work and it does not relate to buying votes. Yes, She is a college grad, smart, nice, does great work etc. But she has been brain washed from an early age that DEM = good; Republican = BAD and that will never change.

          creeper in reply to george. | September 28, 2012 at 11:39 am

          {sigh} She sounds like the friend I just returned from visiting. The brainwashing among those people is so complete there is just no point in even attempting to reason with them. How an intelligent person can take total leave of their senses like that is beyond me.

          casualobserver in reply to george. | September 28, 2012 at 12:36 pm

          Obviously I don’t know your coworker, but she certainly sounds like people I know, too. And I find in most cases their intransigence has more to do with being in an echo chamber than whether they really observe and think. No doubt many get a lot of their information from like minded people, news outlets, newspapers, etc. I’ve heard progressives complain the same way about people in deep red states.

          The fact that Brown has been up so often even in questionable polls says a lot, to me. This state is difficult to predict for a number of reasons, the two most critical being how large the list of unenrolled voters is in proportion and how their voting record swings a fair amount by comparison. Second, never underestimate what the Dem party will do in classical dirty-politics fashion, especially towards the election date.

          It’s my experience in MA that the younger people are, the more being Dem and making ‘acceptable’ politic statements is a social activity. It is really ‘uncool’ to suggest you are Republican. Just as Chuck Schumer or Pelosi speaking makes people in TX recoil in horror, so does a Palin or Jim DeMint cause the same in New England. Culture and society are sadly a big factor. Let’s be honest, many in the region look down on others in the South, Midwest, etc. So while tying Warren to Pelosi (hypothetical) isn’t a bad thing in MA, tying Brown to Palin can be damaging (again hypothetical) But as you climb up the age scale people tend to be more open, candidate by candidate.

        Stop the Kennedy dynasty!

        ” Congressional candidate Sean Bielat calmly looked across the table to his opponent, Joseph P. Kennedy III, and matter-of-factly declared him unfit to be there.”

      No mystery…Scott Brown won because Coakley dissed Fenway Park sports fans. It really is as simple as that.

      “As opposed to standing outside Fenway Park? In the cold? Shaking hands?” she fires back, in an apparent reference to a Brown online video of him doing just that. .

“The middle class is getting hammered…”

I know I want to go out and get hammered every time I hear Tin Lizzie speak…

“My family lore tells me that I am admitted to the Massacusetts Bar. I never questioned what my family told me about my license to practice law… What child would? I just accepted on face value that I was permitted to offer legal advice and charge $625 an hour because that is what I grew up believing…”

Ok, so she said in 2002 :

It is significant that Warren informed the Court in the opening paragraph that she was admitted in Texas, but did not inform the Court that she had been on inactive status since 1992.

So what was going on with her New Jersey License? She said on Monday it had been inactive for years and years, so what year did it become inactive?

My concern is that she may have been working with NO active license at all.

Is there also a way to verify that she has taken the Bar exam in MA and failed?

    CatoRenasci in reply to Mercyneal. | September 28, 2012 at 10:53 am

    One should not understate the importance of the fact that Warren made a false statement in a verified statement to a Federal court in 2002.

    She stated she was admitted in Texas. That statement, without more, implies her license is current and that she was eligible to practice in Texas, which Professor Jacobson’s research and contact with the Texas State Bar shows to inaccurate after 1992. Worse, she had to know that the statement was false because she said sometime around then that she had given up her Texas license ‘years ago. That makes her statement knowingly false. This is PERJURY, a federal felony.

      Cato, you can add into the mix, materiality. It was a material statement because it set forth her qualification to obtain payment from the court for her legal work.

      So, we can say it was a materailly false statement, knowingly made in order to receive benefit from a court.

      Of course, I can’t imagine a prosecutor would ever charge Warren (statute of limitations aside) because even if inactive in NJ she still may have believed she was admitted in NJ, which was qualification enough to get appointed.

        Chris Mac in reply to george. | September 28, 2012 at 1:16 pm

        If a complaint against Warren is lodged with the BBO (and a poster at Massachusetts Lawyers Weekly said he would do that), would the NJ bar then open their records in response to an investigation in MA?

      Observer in reply to CatoRenasci. | September 28, 2012 at 1:34 pm

      Yes, that would be like a person submitting an affidavit to a court that says “I’ve been licensed to drive in Texas since 1992” but omitting the fact that you’ve also been legally blind since 1994, and cannot in fact safely operate a vehicle on Texas roads. It’s a deliberate misrepresentation of a material fact.

    CatoRenasci in reply to Mercyneal. | September 28, 2012 at 10:57 am

    As to your second point about the MA Bar examination: there is no reason Warren would have had to take the MA exam as long as her New Jersey license was active (an open question). She could easily have been admitted on motion under the MA rules which permit ‘foreign’ (other states) lawyers in good standing in any state who have practiced or taught law for a sufficient number of prior years (3 out of 5, I think) to be admitted on motion. It’s what she should have done, and what I’d bet virtually every other HLS faculty member who does any practice does if they didn’t originally take the MA Bar exam after law school.

      Mercyneal in reply to CatoRenasci. | September 28, 2012 at 11:04 am

      It appears that most of the heavy hitters at Harvard Law School like Alan Dershowitz have a Massachusetts law license.

      I would just be interested to see if she failed the MA bar exam as it would go against her fans that are always crowing about how smart she is.

      Pasturized in reply to CatoRenasci. | September 28, 2012 at 11:45 am

      Isn’t it amazing that teaching law is not evidence of “a systematic and continuous presence in Massachusetts for the practice of law” as far as requiring a MA license is concerned, but it is equivalent to practice when the question is admission on motion? Funny old world.

So the Board of Examiners in MA says that the list of people who failed the Bar exam is not public record. Anyone have any ideas how to get around this?

Perhaps I missed this. Where/how do we know that she was inactive status in Texas since 1992?

There is a September 24 post at the Legal Ethics Forum ( with a September 27 update that essentially makes the following argument: The Federal Courts control who gets to practice before them and the Federal Court rules trump state law, even with respect to who can practice law. The writer cites a number of cases to support this argument. So far, we have only learned of Federal cases that Warren worked on. Therefore, the argument goes, if Warren was authorized by the Federal courts in which she appeared to appear before them, she was not engaged in the unauthorized practice of law. Unknown, of course, what Warren’s status was with the courts in question. Under the rules of those courts she could have been permanently admitted or temporarily allowed by the court to appear in a particular matter (pro hac vice).

Curious to hear informed opinions regarding this argument, including Professor Jacobson’s.

    Mercyneal in reply to PlainTalk. | September 28, 2012 at 11:00 am

    The issue now is her New Jersey license and when it became inactive.

    We know that her Texas law license has been inactive since 1992.

    And on September 25, 2012, reporter Robert Rizzuto stated in this story:

    September 25, 2012 Mass Live story:

    “On September 11, Warren reportedly cancelled her New Jersey license which was inactive for some time.”

    If the Masslive reporter says her New Jersey law license was inactive for some time, and her Texas license was inactive, then if both licenses had lapsed, how could she do any work in federal court?

    Also, why didn’t list in her 2008 resume that her Texas law license was inactive?

      I thought it was well understood that NJ doesn’t have an “inactive” bar status. Warren actually resigned from the NJ on 9/11/12. Prior to that, as far as anyone seems to know, she was admitted and in good standing in NJ.

        Mercyneal in reply to Conrad. | September 28, 2012 at 12:40 pm

        No, reported that her law license in New Jersey has been inactive for some time. See above post with link.

        It was also reported that during a radio interview on September 24, that Warren herself said her New Jersey license had been inactive for “years and years.”

        I know of one reporter who is looking into the New Jersey license issue.

    Mercyneal in reply to PlainTalk. | September 28, 2012 at 11:01 am

    Also, Plaintalk, you must not have been reading carefully. Yesterday Professor Jacobson posted an MA case that Warren worked on for an MA citizen. Because of this her previous defenders are now saying that Jacobson is right and she was wrong.

    Go back and read yesterday’s posts.

      That “Massachusetts” case (Schlictmann) was still a federal court case, which I believe was the distinction Plaintalk was focusing on.

      PlainTalk in reply to Mercyneal. | September 28, 2012 at 11:57 am

      I did read the post about the Mass. case. That does not have any impact on the argument at Legal Ethics Forum. The Mass. case mentioned was a case in the First Circuit Court of Appeals, which is a Federal Court. Professor Jacobson raised this case because it undermines a different argument that was being made by Warren’s defenders under the Mass. rules. The Legal Ethics Forum argument is that it does not matter what Mass. rules say, Federal rules trump the state rules.

      Incidentally, some of the commenters on Legal Ethics Forum wondered why she did not simply apply for admission to the Mass. bar. I looked at the current rules. Today, at least, she could be admitted on motion, without taking the bar exam (based on bar admission in another state and experience teaching/practicing law). What the rule was a few years back, I don’t know, but if they were substantially the same, I can’t understand why not either.

        NC Mountain Girl in reply to PlainTalk. | September 28, 2012 at 12:11 pm

        My guess is a massive sense of entitlement along with a cheapskate’s desire to not pay the annual fee.

        I’m not sure the argument about “why not just become a member of the Mass Bar” has much punch to it. First, if it were me, I wouldn’t go through the trouble and expense of becoming a member of another state bar if I didn’t have to. Maybe it’s not a great analogy, but would you register a vehicle (like an ATV*) with the DMV if you didn’t have to? I think the issues really are whether she was REQUIRED to be a member of the Mass Bar to conduct the level and type of law practice she had going on, and (secondarily) whether this was sufficiently obvious as to deem it a serious, in fact criminal, lapse on her part. (IOW, I could see a situation where she eventually says, “I didn’t think I needed to, but now that I’ve spoken with the BBO about it and read what the legal experts have to say about it, I probably should have filed a motion and joined the Mass. Bar.” (On top of that, she could point out that nobody ever questioned it before this campaign, she was always admitted in NJ and subject to their disciplinary system, she’s never had an ethics complaint filed against her, and yadda yadda yadda.)

        The other reason I don’t think the argument packs much punch is that it points out how easy it WOULD have been for her to “register” in Mass. If all that was missing was a motion being filed that would have been granted in pro forma fashion, it seems to make it harder to portray this as a serious crime.

        *My hypothetical assumes, without my checking, that people don’t have to register ATVs.

          Mercyneal in reply to Conrad. | September 28, 2012 at 12:36 pm

          Well, she’d already gone through the “trouble” to be licensed in two other states. She knows the ropes. Additionally, as someone’s research pointed out, almost all of the other professors at Harvard Law are licensed in the state of MA.

          As she has already faced criticism from many about being a carpetbagger, one would have thought she would have applied for an MA license.

    creeper in reply to PlainTalk. | September 28, 2012 at 11:47 am

    There is no such thing as a federal bar exam. Are you suggesting that anyone could practice law in federal court without having passed some…any…state bar exam?

    Your hypothesis is more twisted than a pretzel.

      PlainTalk in reply to creeper. | September 28, 2012 at 12:19 pm

      No. I’m rehashing the argument from Legal Ethics Forum. It does not seem farfetched to me and I have not seen anyone present a contrary view. The current rules of the Federal First Circuit Court of Appeals do not require adminission to a state court. It requires prior admission to “Supreme Court of the United States, the highest court of a state, another United States court of appeals, or a United States district court”. So a state bar is only one way you can satisfy the requirements. That’s just an example of the current rule for one court where Warren appeared. I must say that until a few days ago, until I saw all the arguments and read many of the rules, I would have been with you all the way on this. Now I’m dumbfounded by how murky this stuff is.

        beantown in reply to PlainTalk. | September 28, 2012 at 1:23 pm

        You’re right that it is confusing. I believe Professor Jacobson’s point, and it is one I agree with, is that whether it was proper for her to appear before the First Circuit is a separate question from that of whether she is practicing law in Massachusetts and has violated the law in Massachusetts. The Mass rule in question prohibits the practice of law without a license. There is a definition of what the practice of law is.

        The rules of the First Circuit do require admission to a state court precisely because it requires prior admission to “Supreme Court of the United States, the highest court of a state, another United States court of appeals, or a United States district court”. One cannot gain admission to at least two of these without admission to a state bar. It doesn’t require admission to the Massachusetts state bar, you’re correct. It’s not clear to me though that she ever gained admission to the First Circuit in order to appear there. She would have received a bar number, and it does not show up on her appearance. Other than that, she could appear pro hac vice, which requires a special motion and an affidavit that you are in good standing with you state bar. I don’t see any record of that either.

    Evidently, there is a theory that under the Sperry SCOTUS decision, states can’t regulate who can practice in federal courts or before federal agencies. I’m not clear on how exactly that doctrine would apply here or how far it would extend in general, but it would certainly seem to help the argument that Warren was engaged in UPL if some evidence could be turned up that she was practicing in STATE court or making a regular practice of representing/counseling Massachusetts clients on Massachusetts issues.

      beantown in reply to Conrad. | September 28, 2012 at 6:29 pm

      States cannot prevent or allow who can practice in federal court, correct. That’s not the issue here. She can be licensed in New Jersey and have an office in New Jersey and then, if she follows the proper federal court procedures and rules, practice in federal court in Massachusetts. No question.

      The question is whether she has been practicing law in Massachusetts. One doesn’t need to appear in court to practice law. Signing a document is enough. Giving advice to a client is enough. It doesn’t even need to be on Massachusetts law. I practice law in Massachusetts, advising a California client on issues of federal patent law, and appearing in court in other federal jurisdictions. But I’m in an office within the territory of the Commonwealth, holding myself out as a lawyer, and advising people on what to do. Practicing law. And I’m heavily regulated and charged for the privilege of doing so.

Dow Chemical!?!?

Bhopal, anyone?

In 2002 they were still paying out claims to victims. How could she have been advising them in their bankruptcy? That means she was helping them figure out ways to wash their hands of the disaster.

Maybe she was just helping the little guy…you know, the same way that her work for Travelers ‘helped’ the little guy by granting the corporation immunity against prosecution.

For any remaining lefties who might still be trying to find a defense for Warren, this is the kiss of death. Dow Chemical.

Don’t forget that there is an annual fee of $351 in Massachusetts to maintain an active bar membership. Ms. Warren has cheated the state of Massachusetts out of several thousand dollars by not being registered as an attorney during her time at Harvard.

    If she joined the Mass. bar, however, she could’ve dropped NJ. So would she really have saved herself any money? Somehow I doubt this was a financial decision.

      Insufficiently Sensitive in reply to Conrad. | September 28, 2012 at 6:45 pm

      It wasn’t a financial decision. It followed from NJ’s requirement of a minimum dose of legal continuing education for each two years under license. Ms. Warren herself has explained that she ‘hadn’t the time’ to invest in such studies, so dropped the NJ license.

      Had she wished to retain the license regardless, she would have had to formally swear to the NJ Board that she had complied, and even Ms. Warren would realize the jeopardy of such perjury to her future prospects if busted.

Masterful, Professor. I tip my coffee cup to you. ;-).

It’s now painfully obvious that no other single human being in the United States has bothered to even take a cursory look at this candidate.

Mass Lawyers Weekly poll question:

Should U.S. Senate candidate Elizabeth Warren be investigated for possibly practicing law without a license?


Bhopal was a Union Carbide disaster, not a Dow Chemical disaster. The libbies all hate Dow Chemical because of Napalm and Agent Orange.

Of course, Union Carbide might have merged with Dow at a later date. I don’t know about that…

    Hi HG,

    Here is some background info –

    In 1999, Dow Chemical purchased the Union Carbide Corporation (UCC) for $9.3 billion.

    Obviously I don’t have the details, but it would seem likely that the bankruptcy proceedings that EW was hired to consult on were intended in part to “shield” Dow Chemical from any potential future liabilities related to Bhopal. (Many, many survivors never got anything in terms of compensation from Union Carbide, and the average award was only about $2,000.)

    How could she have done this work with a clean conscience? The first thing I thought of when I saw Dow Chemical was Bhopal and how the corporation only paid a small fraction of what it was originally supposed to pay as a settlement.

    If you are all about the money, then fine – go take the corporate cash. That’s fine. That’s who you are.

    But if you claim to be someone who is always working ‘for the little guy’, and you claim to have liberal scruples, and you are all about justice and fairness, blah blah balh – then you can’t work for ^$##^*&$$&! Dow Chemical. You can’t. You just can’t.

    So in summary, what was Elizabeth Warren thinking when she took that job?!?!

    She must have thought this would never come to light.

      Dow Chemical owned stock in Dow Corning which filed bankruptcy because alkaline the breast implant cases. Union Carbide never declared bankruptcy. It and its Indian sub paid about $500 million to settle the Bhopal claims.

Doing the work that investigative journalists of the MSM should be doing but flat refuse to do because she’s got a ‘D’ next to her name and not a ‘R’ — so this candidate must be protected at all costs.

Excellent work, Professor Jacobson. I am looking forward to reading more even though I’m half a continent away in California and cannot vote for the only candidate not shamefully and heinously self-aggrandizingly lying their posterior off — Scott Brown.

The story of Elizabeth Stands With Writs Warren and her high cheekbones coupled with her lawyering on behalf of ~The Law Firm of Dewey, Cheatem, and Howe~ is a sordid and tawdry tale — and I just can’t stop reading about it. More! More! More — please!

Warren’s latest defense is that she was providing her counsel through LegalZoom, which she had been led to believe was licensed to “practice” in all 50 states.

Nice job on this one, Prof. J! Sheesh … asbestos…Dow right to practice law. As I often remind myself, “Beware the champion of the oppressed.”

what I want to know is…who is the person disliking all the comments here?

    Henry Hawkins in reply to dmacleo. | September 28, 2012 at 3:57 pm

    You don’t have to be registered at LI to enter a Like or Dislike. Since LI articles are frequently linked elsewhere, especially anything Warren-related, liberals get drawn here via links. They seem to Dislike us.

It is highly likely that she could have “waived in” to the Mass bar without having to take the bar exam, as a consequence of prior experience in NJ and Texas. “Waiving in” is just a matter of filing some papers. This is all about cheating the state of Massachusetts out of the $351 annual fee. Taxes are for the little people!

Hmmmm? Statute of limitations? Otherwise potential 9 1/2 years in prison for just those offenses. But that’s beside the point: the unwritten law in MA is that these laws only apply to Republicans.


Section 41 Unauthorized practice of law; solicitation of business; penalty

Section 41. Whoever has been so removed and continues thereafter to practice law or to receive any fee for his services as an attorney at law rendered after such removal, or who holds himself out, or who represents or advertises himself as an attorney or counsellor at law, or whoever, not having been lawfully admitted to practice as an attorney at law, represents himself to be an attorney or counsellor at law, or to be lawfully qualified to practice in the courts of the commonwealth, by means of a sign, business card, letter head or otherwise, or holds himself out or represents or advertises himself as having authority or power in behalf of persons who have claims for damages to procure settlements of such claims for damages either to person or property, or whoever, not being an attorney at law, solicits or procures from any such person or his representative, either for himself or another, the management or control of any such claim, or authority to adjust or bring suit to recover for the same, or solicits for himself or another from a person accused of crime or his representative the right to defend the accused person, shall be punished for a first offence by a fine of not more than one hundred dollars or by imprisonment for not more than six months, and for a subsequent offence by a fine of not more than five hundred dollars or by imprisonment for not more than one year.

An honest person would resign from the race at the very least. Anyone know what the Cherokee version of seppuku is?

Jack The Ripper | September 28, 2012 at 6:21 pm

1) Occupy Harvard Law School!

2) Force Ms. Warren to give a eulogy for the late John Silber (what a contrast there – see WSJ’s Notable & Quotable and editorial today).

3) Run and re-run the 1986 movie Soul Man on all Massachusetts TV stations.

4) Get Ms. Warren’s tax returns and all schedules.

5) Check to see if Ms. Warren had necessary business permits & occupational licenses.

6) Run a silent TV commercial showing nothing but a slide show of Ms. Warren with an exiting caption that simply reads: “Get to know Harvard Law School Professor Elizabeth Warren at” [Some photos out there appear to be really telling].

7) Run another TV commercial that contains nothing but sound bits of Ms. Warren (but make DAMNED sure that no one can accuse the sound bites of being out of context).

8) Round up some of the asbestos claimants for sound bites, along the lines of what that evil, evil Bill Burton of Priorities USA tried to do with Mitt Romney and the steel mill near Kansas City – you know, the woman that Mitt Romney murdered because of health care benefits and then Mitt Romney dragged her to all the way to Poucha Pond and tried to dispose of her body by dumping it in the water.

With apologies to Gilbert Gottfried (in the Roast of Bob Sagat): People should not go around saying that Bill Burton of Priorities USA raped and killed a child in 1990. There is no proof that Bill Burton of Priorities USA raped and killed a child in 1990. Sure, Bill Burton of Priorities USA has never denied that he raped and killed a child in 1990. But, then there is no evidence that anyone has ever asked Bill Burton of Priorities USA whether he raped and killed a child in 1990 or whether Bill Burton of Priorities USA would be willing to deny that he raped and killed a child in 1990. So, if you have any proof that that Bill Burton of Priorities USA raped and killed child in 1990, then stop gossiping and slandering Bill Burton of Priorities USA and go straight to the police!

Jack The Ripper | September 28, 2012 at 6:41 pm

Did Elizabeth Warren do any legal work for “Big Oil?”

Did she do any work for “Wall Street” companies?

Here in MA, I suspect the same turn out for Scott Brown as in 2010, plus some. I’m sure He won quite a few votes from the Democratic voters, for all the times He voted against the Tea Party-ish constituents, the past 2 years. For that reason I have withheld my donation this time around. Let the newbies donate to you Scott.

The Diocese continues it’s gentle massage of influence during the homily and in the bulletins. Rallying the votes away from the Democratic Machine, over the healthcare mandates and lack of religious liberty. The added bonus is Question 2 on the Ma Ballot. It directly opposes Catholic Doctrine and reveals the Progressive push, THAT WE MUST RESIST, Doctor assisted suicide. Dems playing God through deadly drug cocktails is just the right thing to lose the Catholic vote completely.

When the ‘Massachusetts Information for Voters’ came in the mail today I saw a glimmer of hope because of Question 2.

What’s going to push us over in MA is the hope that all the stoners are too stoned to show up for Question 3, legalizing medical marijuana. Those idiots will vote ‘D’ down the line. And I’m sure that’s not a coincidence at all, Question 3 made the ballot for 2012. Obama needs every vote he can get.

Jack The Ripper | September 28, 2012 at 7:55 pm

Disgorgement of attorney’s fees due to incorrect statement under Federal Rule of Bankruptcy Procedure 2014.

In re OCCIDENTAL FINANCIAL GROUP, INC.; Occidental Land Research, Debtors.
The LAW OFFICES OF IVAN W. HALPERIN, Plaintiff-Appellant,
OCCIDENTAL FINANCIAL GROUP, INC.; Occidental Land Research, Defendants-Appellees.
40 F.3d 1059, 32 Collier Bankr.Cas.2d 515, Bankr. L. Rep. P 76,207, No. 92-56002 (9th Cir. 1994)

Also, Bankruptcy Crimes by Stephanie Wickouski
cites Gellene 182 F.3d 578 on page 131 on that book, footnote number too small to read on screen.

Here is the case.

182 F.3d 578 (7th Cir. 1999)

JOHN G. GELLENE, Defendant-Appellant.

No. 98-2985

United States Court of Appeals, Seventh Circuit

Argued December 8, 1998
Decided July 20, 1999
Rehearing and Suggestion for Rehearing En Banc Denied August 17, 1999*

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 97 CR 221–J.P. Stadtmueller, Chief Judge.[Copyrighted Material Omitted][Copyrighted Material Omitted]

Before COFFEY, RIPPLE and MANION, Circuit Judges.

RIPPLE, Circuit Judge.

John G. Gellene, a partner at the law firm of Milbank Tweed Hadley & McCloy (“Milbank”) in New York, represented the Bucyrus-Erie Company (“Bucyrus”) in its Chapter 11 bankruptcy. Mr. Gellene filed in the bankruptcy court a sworn declaration that was to include all of his firm’s connections to the debtor, creditors, and any other parties in interest. The declaration failed to list the senior secured creditor and related parties. Mr. Gellene was charged with two counts of knowingly and fraudulently making a false material declaration in the Bucyrus bankruptcy case, in violation of 18 U.S.C. § 152, and one count of using a document while under oath, knowing that it contained a false material declaration, in violation of 18 U.S.C. § 1623. Although Mr. Gellene admitted that he had used bad judgment in concluding that the representations did not need to be disclosed, he asserted that he had no fraudulent intent. After a six-day trial, on March 3, 1998, the jury returned guilty verdicts against Mr. Gellene on all three counts. Mr. Gellene was sentenced to 15 months of imprisonment on each count, to run concurrently, and was fined $15,000.


A. The Bucyrus Bankruptcy Proceedings

Bucyrus, a manufacturer of mining equipment based in South Milwaukee, Wisconsin, had retained Milbank to represent it in general corporate matters in the 1980s. Between 1988 and 1992, Bucyrus’ financial transactions, including a leveraged buy-out, left the company with more than $200 million in debt. During that time, the head of Milbank’s Mergers and Acquisitions Department, Lawrence Lederman, managed the Bucyrus account. In 1993, Lederman brought in Mr. Gellene, a bankruptcy attorney at Milbank, to work on the financial restructuring of Bucyrus.

At that time, the major parties with an interest in Bucyrus included Goldman Sachs & Co., Bucyrus’ largest equity shareholder, which held 49% of the Bucyrus stock; Jackson National Life Insurance Company (“JNL”), Bucyrus’ largest creditor, which held approximately $60 million in unsecured notes; and South Street Funds, a group of investment entities, which held approximately $35 million in senior secured notes and leasehold interests.1 South Street Funds was managed and directed by Greycliff Partners, an investment entity which consisted of financial advisers Mikael Salovaara and Alfred Eckert, former employees of Goldman Sachs.

On February 18, 1994, Bucyrus filed its Chapter 11 bankruptcy petition in the Eastern District of Wisconsin.2 Because the legal representation of a debtor is subject to court approval, Bucyrus submitted an application requesting that Milbank be appointed to represent it in the bankruptcy. Pursuant to Bankruptcy Rule 2014, the application included the required sworn declaration disclosing “any connection” that Milbank had with “the Debtors, their creditors, or any other party in interest.”3 Ex. 22, ¶ 5. Mr. Gellene, Milbank’s lead attorney in the Bucyrus bankruptcy, under oath disclosed that his firm had previously represented Goldman Sachs and JNL in “unrelated” matters and would continue to represent Goldman Sachs in non-Bucyrus proceedings. See id. at ¶ 6. Mr. Gellene did not disclose any of Milbank’s representations of South Street, Greycliff Partners or Salovaara.

The United States Trustee and JNL filed objections to Mr. Gellene’s Rule 2014 declaration. They sought additional information regarding Milbank’s representation of Goldman Sachs and questioned whether there was a sufficient conflict of interest to bar Milbank’s retention as counsel for the debtor.

On March 23, 1994, the bankruptcy court conducted a hearing on the issue. It requested that Mr. Gellene submit a second declaration containing more detail about possible conflicts of interest.4 The court specifically commented: “If you represent them [Goldman Sachs] in other matters, then I think it’s important to state precisely what arrangements have been made internally to separate what you’re doing in this matter with the recommendation in other matters.” Tr. 917-18.

On March 28, 1994, Mr. Gellene signed a second sworn Rule 2014 statement providing details about Milbank’s representation of Goldman Sachs and the “Chinese wall” that the firm planned to put in place. It also disclosed its prior representation of two other creditors, Cowen & Co. and Mitsubishi International. The declaration then stated:

Besides the representations disclosed in my declaration dated February 18, 1994, after due inquiry I am unaware of any other current representation by Milbank of an equity security holder or institutional creditor of [Bucyrus].

Ex. 27, ¶ 7. Mr. Gellene again did not disclose any representation by Milbank of South Street, Greycliff Partners or Salovaara. However, at the time of both declarations, Milbank was doing their legal work, including the representation of Salovaara when his partner, Alfred Eckert, sued him.5

At Milbank, one partner recognized that there might be a conflict of interest between Milbank’s representation of Salovaara in the Salovaara- Eckert dispute and its representation of Bucyrus in its bankruptcy proceedings. At a meeting on December 22, 1993, with Mr. Gellene, Lederman and Milbank partner Toni Lichstein, all of whom were working on the Bucyrus bankruptcy and the Salovaara-Eckert dispute, Lichstein raised the possibility of conflict. Both Lederman and Mr. Gellene stated it was not a problem. Lichstein raised the issue again in March 1994 after she, representing Salovaara, had attended a South Street investors’ meeting at which South Street’s investment in Bucyrus was discussed. At that time, Mr. Gellene responded that Salovaara was not a creditor of Bucyrus and that all disclosure obligations had been satisfied. However, Lederman suggested that, if Lichstein had further concerns, Salovaara should obtain other counsel. After that, Milbank’s representation of Salovaara in his dispute with Eckert slowed and eventually ended. By December 1994, Lederman had resigned his representation of South Street/Greycliff and had written off the billings generated in a tangential matter, a Colorado bankruptcy6 (about $16,000), and in the Salovaara-Eckert dispute (more than $300,000). Mr. Gellene also wrote off $13,000 in fees and expenses on the Bucyrus bankruptcy billings.7 Mr. Gellene never informed anyone at Bucyrus of the other Milbank representations.

Meanwhile, the Bucyrus bankruptcy creditors’ committee worked through the summer and fall of 1994 to see if it could formulate a plan that would satisfy the major creditors.8 By late fall, a compromise was reached and all the parties to the Bucyrus bankruptcy agreed to the new plan of reorganization.

Thereafter, Milbank filed a petition requesting compensation for its work on the bankruptcy case. In November 1995, a hearing was held on Milbank’s application for more than $2 million in legal fees and expenses. The United States Trustee and JNL both opposed the application. Mr. Gellene was lead attorney for Milbank at those hearings. However, when he testified in support of his firm’s request for fees, Milbank partner David Gelfand was the attorney who put on Mr. Gellene’s testimony. Gelfand presented Mr. Gellene’s sworn declarations to him on the stand. Mr. Gellene testified that the supplemental Rule 2014 declaration had disclosed Milbank’s relationship with Goldman Sachs and thus that the court had been fully aware of that relationship. However, Mr. Gellene did not testify that his firm had represented and was continuing to represent South Street and Greycliff. The United States Trustee did not learn of that representation until the late fall of 1996. The court ultimately awarded Milbank approximately $1.8 million in fees and expenses.9

In late 1996, JNL discovered that Milbank had represented Salovaara in his dispute with Eckert at the same time it was representing Bucyrus. JNL then filed a motion in the bankruptcy court in December 1996 seeking disgorgement of Milbank’s fees. Mr. Gellene did not respond to the motion. On February 24, 1997, when his partners became aware of the motion and asked him about it, Mr. Gellene responded falsely that the answer was due in a few days. Mr. Gellene even altered the JNL filing to conceal the date it had been signed. When that deception was uncovered, however, Mr. Gellene admitted to Lichstein and Gelfand that he had lied about the response due date.

In March 1997, Mr. Gellene filed a third declaration with the bankruptcy court. In it, he explained that he had made an error in legal judgment by omitting Milbank’s representations of South Street and of Salovaara and took “full personal responsibility for failing to disclose these matters to the court.” Tr. 1247.

B. The Federal Criminal Charges

On December 9, 1997, a federal grand jury returned a three-count indictment against Mr. Gellene, charging him with two counts of bankruptcy fraud and with one count of perjury. It alleged that Mr. Gellene had lied three times in the course of a bankruptcy case: twice when he filed the Rule 2014 declarations knowing that they were false and once when he used the supplemental declaration, while under oath at a bankruptcy hearing, knowing that it contained a false material declaration.

At Mr. Gellene’s trial, the government produced evidence of other false representations by the defendant, evidence that was admitted under Rule 404(b) of the Federal Rules of Evidence. The first concerned Mr. Gellene’s bar status. He joined the New York State Bar in 1990; however, between 1981 and 1990 he represented himself to be a member of that bar in court filings and in legal publications. Mr. Gellene also represented himself to be a member of the federal bar in the Southern District of New York, both by repeatedly appearing in that court and by claiming that membership when applying for membership in the Eastern District of Wisconsin to represent Bucyrus in its bankruptcy proceedings.

The second category of evidence admitted at trial concerned Milbank’s relationship with Lotus Cab Company: Mr. Gellene had included his charges to the cab company in the itemized expenses of the Milbank fee request but had failed to disclose to the court the ownership interest of some law firm partners in that company. The third false representation admitted at Mr. Gellene’s trial under Rule 404(b) was made to the Colorado bankruptcy court. After South Street, Milbank’s client, failed to produce discovery documents in the bankruptcy case of George Gillett, the bankruptcy court dismissed the South Street claim. Mr. Gellene moved for reconsideration; he stated that the delay in producing the documents was caused by the winding-up of South Street and by the ongoing dispute between Eckert, the managing partner of South Street, and the Funds’ portfolio advisor, Greycliff Partners, regarding control of the funds. At Mr. Gellene’s trial, however, Eckert testified that Mr. Gellene’s explanation was not true and that he had produced the documents shortly after Mr. Gellene had requested them– which was after the deadline for production of the documents.

Mr. Gellene testified as the only defense witness at his trial. He stated that he began work at Milbank in 1980 and developed a bankruptcy practice. He testified that Lederman gave him the Bucyrus work and the South Street/Greycliff representation. He also admitted being aware in December 1993 of his firm’s representation of Salovaara in the Eckert dispute. He testified that he failed to disclose these representations in the Bucyrus bankruptcy because he did not consider Salovaara to be a creditor, did not distinguish South Street/Greycliff from Salovaara, and thus did not think the representations needed to be disclosed. He also testified that the matters involving Salovaara, South Street and Greycliff were unrelated to the Bucyrus matter and that an agreement with Salovaara had already been reached. He called these conclusions “bad judgment” and “stupid, but not criminal.” The jury did not agree; it convicted him on all three counts.



A. Bankruptcy Fraud under 18 U.S.C. § 152(3)


Mr. Gellene was found guilty of two counts of making false oaths in a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3).10 He was convicted specifically of “knowingly and fraudulently” making false declarations under oath in two Rule 2014 bankruptcy applications.11 Twice he applied for an order approving his employment as attorney for the debtor; first, on February 18, 1994, the day he filed Bucyrus’ Chapter 11 bankruptcy, and second, on March 28, 1994, after the hearing on his application, when he elaborated on potential conflicts of interest, as the bankruptcy court had requested. Those applications failed to list the senior secured creditor and related parties.

At trial, the district court instructed the jury on the elements of bankruptcy fraud12 and specifically instructed that “[a] statement is fraudulent if known to be untrue and made with intent to deceive.” Jury Instructions at 18. Mr. Gellene submits that the court’s definition of “fraudulent” as “with intent to deceive” is erroneous. In his view, the statute requires that the statement be made not simply with the intent to deceive but with the intent to defraud. He further claims that, because the government misapprehended the statutory requirement, it failed to present evidence that he made his declarations with an intent to defraud because it believed it needed to prove merely an intent to deceive. He submits that the distinction between the two terms is significant: To deceive is to cause to believe the false or to mislead; to defraud is to deprive of some right, interest or property by deceit. Therefore, under § 152 of the Bankruptcy Code, he contends, the defendant must have a specific intent to alter or to impact the distribution of a debtor’s assets and not merely to impact the integrity of the legal system, as the government argued.

We cannot accept Mr. Gellene’s narrowly circumscribed definition of “intent to defraud” or “fraudulently.” Mr. Gellene would limit exclusively the statute’s scope to false statements that deprive the debtor of his property or the bankruptcy estate of its assets. In our view, such a parsimonious interpretation was not intended by Congress.13

First, the plain wording of the statute suggests no such limited scope. Rather, the plain wording of the statute punishes making a false statement “knowingly and fraudulently.” The common understanding of the term “fraudulently” includes the intent to deceive.14 Indeed, our case law has long acknowledged a broader scope for the statutory language than Mr. Gellene suggests. We have held that the section is designed to reach statements made “with intent to defraud the bankruptcy court.” United States v. Key, 859 F.2d 1257, 1260 (7th Cir. 1988). In United States v. Ellis, 50 F.3d 419 (7th Cir.), cert. denied, 516 U.S. 849 (1995), we commented that § 152 has long been recognized as the Congress’ attempt to criminalize all the possible methods by which a debtor or any other person may attempt to defeat the intent and effect of the Bankruptcy Code and that the expansive scope of the statute “reaches beyond the wrongful sequestration of a debtor’s property and also encompasses the knowing and fraudulent making of false oaths or declarations in the context of a bankruptcy proceeding.” Id. at 423 (citing Key, 859 F.2d at 1259-60).

In addition, Ellis commented that the omission of material information in a bankruptcy filing “impedes a bankruptcy court’s fulfilling of its responsibilities just as much as an explicitly false statement.” Id. (affirming § 152 conviction of debtor for omission of prior bankruptcies from petition); see also United States v. Cherek, 734 F.2d 1248, 1254 (7th Cir. 1984) (holding that failure by corporation president to list asset on corporation’s bankruptcy petition was omission of material information supporting a § 152 conviction), cert. denied, 471 U.S. 1014 (1985); United States v. Lindholm, 24 F.3d 1078, 1083 (9th Cir. 1994) (affirming § 152 conviction of debtor for omission of prior bankruptcy filings). Thus, whether the deception at issue is aimed at thwarting the bankruptcy court or the parties to the bankruptcy, § 152 is designed to protect the integrity of the administration of a bankruptcy case. As one commentator has put it:

The orientation of title 11 toward debtors’ rehabilitation and equitable distribution to creditors relies heavily upon the participants’ honesty. When honesty is absent, the goals of the civil side of the system become more expensive and more illusive. To protect the civil system, bankruptcy crimes are not concerned with individual loss or even whether certain acts caused anyone particularized harm. Instead, the statutes establishing the federal bankruptcy crimes seek to prevent and redress abuses of the bankruptcy system. Thus, most of the crimes do not require that the acts proscribed be material in the grand scheme of things, that the defendant benefit in any way nor that any creditor be injured.

1 Collier on Bankruptcy, ¶ 7.01[1][a] at 7-15 (Lawrence P. King ed., 15th ed. rev. 1999) (emphasis added).


Mr. Gellene’s narrow reading of the statute leads him to take a narrow view of the provision’s materiality requirement. In his view, the statute criminalizes only fraud that is intended to frustrate the equitable distribution of assets in the bankruptcy estate. As counsel explained at oral argument, the fraud ought to be considered material only when it is related to the estate’s assets, to pecuniary and property distribution issues. Under this narrow interpretation, his failure to divulge his representation of a major secured creditor of the debtor was not material, he asserts, because it was not intended to impact on the equitable distribution of assets in the bankruptcy.

We agree that § 152 requires that materiality be an element of the crime of bankruptcy fraud and, indeed, we have incorporated such a requirement in our analysis of § 152 fraud. See Key, 859 F.2d at 1261. The statute is therefore construed to require that the false oath be in relation to some material matter. See United States v. Jackson, 836 F.2d 324, 329 (7th Cir. 1987) (citing cases). That material matter about which the misrepresentation was made could of course be the debtor’s business transactions, the debtor’s estate assets, the discovery of those assets, or the history of the debtor’s financial transactions. See id. (holding that the debtor’s false statements about the location of assets of the estate were material to the proceedings). However, we have never accepted Mr. Gellene’s view that only misrepresentations that relate to the assets of the bankruptcy estate are material. Indeed, we, like other circuits, have rejected expressly such a reading. See Key, 859 F.2d at 1261 (stating that materiality does not require showing that creditors were harmed by the false statements).15 The same commentator, addressing the materiality element, likewise has explained why a broader view of materiality than the one urged by Mr. Gellene is compatible with the purpose of the bankruptcy laws:

Materiality in this context does not require harm to or adverse reliance by a creditor, nor does it require a realization of a gain by the defendant. Rather, it requires that the false oath or account relate to some significant aspect of the bankruptcy case or proceeding in which it was given, or that it pertain to the discovery of assets or to the debtor’s financial transactions. Just what is significant is difficult to say for the general case: failing to disclose ownership of a ream of paper in a multi-million dollar bankruptcy is probably not material, but in many cases a false social security number or a false prior address may be. Statements given by individuals in order to secure a particular adjudication carry their own reliable index of materiality; the person giving the statement believed it sufficiently important–and hence, material–to the goal of obtaining the desired action.

Collier on Bankruptcy, ¶ 7.02[2][a][iv] at 7- 46 to 7-47. We conclude that the materiality element does not require proof of the potential impact on the disposition of assets.

We have no doubt that a misstatement in a Rule 2014 statement by an attorney about other affiliations constitutes a material misstatement. The Bankruptcy Code requires that attorneys who seek to be employed as counsel for a debtor apply for the bankruptcy court’s approval of that employment. See In re Crivello, 134 F.3d 831, 835-36 (7th Cir. 1998). Bankruptcy Rule 2014 requires the potential attorney for the debtor to set forth under oath any “connections with the debtor, creditors, [and] any other party in interest.” Fed. R. Bankr. P. 2014(a). The disclosure requirements apply to all professionals and are not discretionary. The professionals “cannot pick and choose which connections are irrelevant or trivial.” In re EWC, Inc., 138 B.R. 276, 280 (Bankr. W.D. Okl. 1992). “[C]ounsel who fail to disclose timely and completely their connections proceed at their own risk because failure to disclose is sufficient grounds to revoke an employment order and deny compensation.” Crivello, 134 F.3d at 836; see also Rome v. Braunstein, 19 F.3d 54, 59 (1st Cir. 1994). As Judge Kanne pointed out in Crivello, this procedure is designed to ensure that a “disinterested person” is chosen to represent the debtor. This requirement goes to the heart of the integrity of the administration of the bankruptcy estate. The Code reflects Congress’ concern that any person who might possess or assert an interest or have a predisposition that would reduce the value of the estate or delay its administration ought not have a professional relationship with the estate. See Crivello, 124 F.3d at 835.


We now consider whether there was sufficient evidence of Mr. Gellene’s guilt. We therefore must determine, after viewing the evidence in the light most favorable to the government, whether a rational trier of fact could have found the essential elements of the offense of bankruptcy fraud beyond a reasonable doubt. See United States v. Webster, 125 F.3d 1024, 1034 (7th Cir. 1997), cert. denied, 118 S. Ct. 698 (1998). “Circumstantial evidence is sufficient to prove fraudulent intent and to support a conviction.” Id.

Our review of the record verifies that the government established Mr. Gellene’s knowledge of his duty to disclose. It set forth Mr. Gellene’s expertise in bankruptcy and the bankruptcy court’s statements alerting him to the importance of full disclosures. Mr. Gellene was fully apprised of the importance of the information that had been excluded. He had been questioned by his law partner, Toni Lichstein, several times about whether there might be a conflict of interest and whether all necessary disclosures had been made. Yet Mr. Gellene continued to withhold the information over a two-year period; he simultaneously worked on the Bucyrus bankruptcy and represented South Street, Greycliff and Salovaara without informing his client Bucyrus of the other representations.

In addition to the direct evidence of Mr. Gellene’s intentional fraudulent omission of information from the Rule 2014 applications, the government offered evidence that he had committed deceptions on the bankruptcy court and other courts with respect to (1) his failure to disclose his law firm partners’ interest in the Lotus Cab Company, from whom he had submitted a bill; (2) his failure to file documents in a Colorado bankruptcy court; and (3) the status of his bar memberships. Moreover, Mr. Gellene himself testified regarding his mental state; therefore, the jury had an opportunity to judge in detail his innocent explanations regarding his conduct. After viewing the evidence in the light most favorable to the government, we conclude that there was evidence from which a jury reasonably could have found beyond a reasonable doubt that Mr. Gellene knowingly and fraudulently made two false material declarations in the Bucyrus bankruptcy case.


Mr. Gellene claims that the court’s definition of “fraudulent,” which was set forth in the instructions, was erroneous. We therefore have considered the jury instructions, viewing them as a whole and acknowledging that we may overturn Mr. Gellene’s conviction only if those instructions failed to treat the contested issues fairly and adequately. See United States v. Lerch, 996 F.2d 158, 161 (7th Cir. 1993), cert. denied, 510 U.S. 1047 (1994).

The district court instructed the jury that a “statement or representation is fraudulent if known to be untrue, and made with intent to deceive.” This instruction, given the facts of the case, adequately presented the issue to the jury. The defendant’s conduct was to make a fraudulent statement. Because he is the attorney for the debtor rather than the debtor, his use of false statements defrauded the entire bankruptcy process when he withheld the name of a client that was the debtor’s major secured creditor and of other related entities. We conclude that the instruction given in this case, which notably was given along with an instruction stating the elements of § 152 that must be proven beyond a reasonable doubt, adequately addressed the issue of intent. We hold that the district court treated all elements of the offense fairly and accurately, and accordingly we affirm the use of the jury instruction defining “fraudulent.”

B. Perjury under 18 U.S.C. § 1623


Mr. Gellene was convicted on Count 3 of using a document, while under oath, knowing that it contained a material falsehood, in violation of 18 U.S.C. § 1623.16 This charge arose from the bankruptcy court’s hearing in November 1995 to consider Milbank’s fee application. JNL opposed the application on the ground that Milbank had conflicts of interest in its representation of the debtor Bucyrus. Specifically, JNL challenged Milbank’s relationship with Goldman Sachs.

At the fee hearing, Mr. Gellene testified on direct examination that he previously had disclosed to the bankruptcy court Milbank’s representation of Goldman Sachs; in the course of his testimony, he referred to the two sworn declarations as exhibits to establish that disclosure. The second declaration in particular demonstrated that Milbank had divulged its relationship with Goldman Sachs and had put in place a “Chinese wall” to keep separate the Goldman Sachs legal representation and the Bucyrus bankruptcy work. That second declaration then made this concluding statement, alleged to be false in Count 3:

Besides the representations disclosed in my declaration dated February 18, 1994, after due inquiry, I am unaware of any other current representation by Milbank of an equity security holder or institutional creditor of the Debtors.

Indictment, Count 3, ¶ 2.

However, when Mr. Gellene drafted this Rule 2014 disclosure statement (around March 28, 1994) and when he used it at the fee hearing (November 29, 1995), he and his firm were actively representing South Street and Greycliff. Notably, Milbank’s representation of those entities was not known at the time of the fee hearing to anyone involved in the Bucyrus bankruptcy.


Section 1623(a), often called the “false swearing statute” to distinguish it from its older sibling, the general federal perjury statute, see United States v. Sherman, 150 F.3d 306, 310 (3d Cir. 1998), punishes anyone who “knowingly makes any false material declaration” under oath in a court proceeding. 18 U.S.C. § 1623(a).17 A material statement is one that has “a natural tendency to influence, or was capable of influencing, the decision of” the decisionmaker to which the statement was addressed. Kungys v. United States, 485 U.S. 759, 770 (1988) (citing cases as examples). Materiality is an element of the offense; it must be proven by the government and decided by the jury. See United States v. Gaudin, 515 U.S. 506, 509 (1995); United States v. Akram, 152 F.3d 698, 700 (7th Cir. 1998) (“Since Johnson v. United States, 520 U.S. 461 (1997), it has been clear that materiality under § 1623(a) is an element of the prosecution’s case and must therefore be submitted to the jury and proven beyond a reasonable doubt.”).

Mr. Gellene challenges his conviction on several grounds. First, he claims that the evidence was not sufficient to prove his guilt beyond a reasonable doubt because his testimony at the fee hearing did not constitute a knowing “use” of a “false material” document. Second, he asserts (for the first time on appeal) that, because the document was literally true, his statement based on the declaration cannot form the basis for a perjury conviction. And, third, he submits that the district court should have granted the motion for judgment of acquittal. We shall address the first two contentions in some detail and, in the course of our analysis, also discuss the sufficiency of the evidence.


The false swearing statute, as the government seeks to apply it here, requires the “use” of a false statement. Mr. Gellene claims that his testimony at the fee hearing was entirely and historically accurate. In his view, the focus of the inquiry was on another paragraph of his March 1994 declaration, the paragraph that disclosed his relationship with Goldman Sachs. Mr. Gellene contends that he did not “use” the paragraph mentioned in the indictment because he never referred to that paragraph or used that paragraph to bolster his testimony; the inquiry was limited to Milbank’s relationship with Goldman Sachs, and he made no mention at the fee hearing of the paragraph set forth in the indictment.

We cannot accept this argument. The thrust of JNL’s challenge to the fee petition was a challenge to Milbank’s divided loyalty. Although its allegation was limited to Milbank’s association with Goldman Sachs, a fair interpretation of the record–and one the jury was certainly entitled to accept–was that JNL’s foundational concern was that Milbank’s divided loyalties might jeopardize the position of the creditors. The statement at issue in the indictment informed, and assured, the bankruptcy court that, beyond the area of acknowledged concern (Milbank’s relationship with Goldman Sachs), there were no other areas of representation of which Mr. Gellene was aware. The statement conveyed the message that, once he met JNL’s concern about Goldman Sachs, there was no other cause for concern about Milbank’s divided loyalties and the fee petition could be approved.

We believe that the district court was correct in its determination that Mr. Gellene “used”18 the designated paragraph of the supplemental statement in his 2014 application during his testimony. His reference to–and his reliance upon–the application allowed him to demonstrate not only that he had disclosed the representation of Goldman Sachs but also that he had examined other possible areas of concern and had determined that there were no other similar representations that warranted the court’s scrutiny before awarding fees.

For essentially the same reasons, we believe that the use of the application was material. The district court noted that a document “is material if it has a natural tendency to influence or is capable of influencing the decision of the person to whom it was addressed.” R.50 at 6 (citing United States v. Gaudin, 515 U.S. 506, 509 (1995), and United States v. Ross, 77 F.3d 1525, 1545 (7th Cir. 1996)). According to the district court, the testimony of David Gelfand, Mr. Gellene’s partner at Milbank who examined Mr. Gellene at the fee hearing, was sufficient evidence of materiality; Mr. Gelfand testified that the document was introduced to convince the bankruptcy court to award attorney’s fees.

Our study of the record convinces us of the correctness of the district court’s ruling. The jury was entitled to believe that the statement was designed to lull the bankruptcy court and the parties into believing that there were no other Milbank relationships deserving of scrutiny before the award of fees. The jury was entitled to conclude that the sequence of events established that Mr. Gellene had knowingly used the document to convey such an impression to the bankruptcy court. Indeed, Mr. Gellene stated prior to the hearing that he intended to use the declarations in response to JNL’s allegation that Milbank had conflicts of interest. David Gelfand, who examined Mr. Gellene at that hearing, later testified that Mr. Gellene had chosen to proffer his sworn declarations as exhibits and had orchestrated the subsequent questioning of his own sworn testimony. According to Gelfand, the purpose in presenting the documents was to establish that Milbank was entitled to the $2 million in fees because all potential conflicts had been disclosed and considered by the bankruptcy court. There is no question that his proffer of the statement constituted use of a material document under § 1623.

The record permitted the jury to conclude that Mr. Gellene knowingly introduced the false document in order to gain approval of Milbank’s $2 million fee request. Evaluating the testimony presented to it, the jury was entitled to conclude that Mr. Gellene had virtually bragged about the forthrightness of Milbank’s disclosure of its representation of Goldman Sachs, all the while knowing that no one involved in the bankruptcy proceedings was aware of Milbank’s undisclosed representations of South Street and the other entities. It was not until the next year that the falsity of that disclosure information was discovered. Only then could the United States Trustee seek return of the fees and an order of sanctions against Milbank.

Accordingly, we believe that sufficient evidence existed for the district court to find that materiality has been established.


Mr. Gellene contends that his conviction under § 1623 cannot stand because the statement made in the paragraph set forth in the indictment is literally true. The government made no effort to prove, he contends, that Milbank’s undisclosed clients–South Street, Greycliff and Salovaara– were “institutional creditors” or “equity security holders” of Bucyrus. Because there was nothing “materially false” about that paragraph of Mr. Gellene’s declaration, he claims, the government could not have proven those necessary elements of the crime of perjury under § 1623. Therefore, he submits, his perjury conviction cannot be sustained.19

The government points out that, because Mr. Gellene has raised this issue for the first time on appeal, he may obtain a reversal only if he can demonstrate a “manifest miscarriage of justice.” United States v. Hickok, 77 F.3d 992, 1002 (7th Cir.), cert. denied, 517 U.S. 1200 (1996). It further argues that a reviewing court should uphold the conviction as long as the falsity is established by a “common sense reading” of the language used. United States v. Yasak, 884 F.2d 996, 1001 (7th Cir. 1989). The government then submits that South Street and Greycliff were “institutional creditors” and that Mr. Gellene was fully aware that these entities were represented by Milbank at the time he stated that he was “unaware” of such creditors.20

The jury was entitled to credit the testimony of Alfred Eckert, partner of Mikael Salovaara and half-owner of South Street and Greycliff, who stated that South Street’s first investment was a secured loan to Bucyrus in the summer of 1992. As Eckert explained, South Street had loaned $35 million to Bucyrus “and we were collateralized by all the assets of the company so that . . . we would be paid off first if there was a problem.” Tr. 573. Eckert also testified that the interest of South Street certainly was affected by the Bucyrus bankruptcy. It is obvious from this testimony that, whether or not Mr. Gellene defines it as an “institutional creditor,” South Street was a party in interest in the Bucyrus bankruptcy, one that should have been identified and disclosed by Mr. Gellene on his Rule 2014 declaration as long as he or his firm had any connection with it.

Because it is clear that South Street and Greycliff were institutions that had lent to and were owed millions of dollars by Bucyrus, we believe that the jury had sufficient information from the trial testimony of Eckert and others to determine that South Street and Greycliff were institutional creditors of the debtor Bucyrus. Accordingly, it was not a miscarriage of justice for the jury to find that South Street and Greycliff fit the term “institutional creditor” and then to conclude that Mr. Gellene’s supplemental declaration was false.

C. Admissibility of Rule 404(b) Evidence


Mr. Gellene next submits that the district court abused its discretion in admitting evidence, pursuant to Rule 404(b) of the Federal Rules of Evidence,21 of certain other events on the ground that they were relevant and probative on the issue of intent.

During the course of trial, the court admitted evidence that Mr. Gellene had misrepresented his status as a member of the bar when applying to become a member of the bar of the Eastern District of Wisconsin: He stated that he was a member of the bar of the Southern District of New York and had been a member since 1981, but in fact he has never been a member of that bar, despite repeated appearances in that court over the years. In addition, Mr. Gellene practiced law in New York State between 1981 and 1990 without ever joining that bar. During that time, he represented himself to be a member of the New York bar in legal publications and court filings. The court also admitted evidence of (1) Mr. Gellene’s misrepresentation to the Colorado bankruptcy court concerning his failure to produce discovery documents, and (2) Mr. Gellene’s misrepresentation to the Wisconsin bankruptcy court in this case concerning his law firm’s relationship with Lotus Cab Company.

Mr. Gellene explained that he had passed the bar but had neglected to complete the requisite paperwork to be licensed. He also admitted that he did not tell his law firm that he was not a member of the bar and, as a result, practiced law for almost nine years without a proper license. Nevertheless, he contends that the government sought to admit this irrelevant evidence to prove his propensity to make misrepresentations, thereby allowing the jury to infer that he must have been untruthful and even must have fraudulently intended the charged conduct. In his view, stating that he was a licensed attorney when he only had passed the bar exam, although not commendable conduct, is not equivalent to the state of mind involved with providing false testimony as to a material issue under litigation.

In admitting the evidence, the district court reasoned that, by denying that he had the requisite fraudulent intent for the charged crimes, Mr. Gellene had made intent an issue in the case; therefore, the court concluded, the government was entitled to rebut that contention with evidence of other bad acts that tended to undermine the defendant’s innocent explanations for his act. Concerning Mr. Gellene’s bar status, the court determined that there was clear evidence of (1) his knowledge that he was not a member of the New York state bar and (2) “his continuing intent for a period of almost nine years to deceive anyone who would have an interest [in] believing that indeed he was a member of the New York bar.” Tr. 1480. The court then determined that this intent to deceive concerning his bar status was similar to his intent to defraud, to deceive and to perjure himself under Counts 1, 2 and 3 of the indictment. It noted Mr. Gellene’s status as an officer of the court–in the bankruptcy court in Milwaukee, a federal court in New York, a bankruptcy court in Denver, or elsewhere–and then found that his conduct in those courts was similar and “appropriate to consider on the very narrow issue of this defendant’s intent in his candor with the United States Bankruptcy Court in the Eastern District of Wisconsin.” Tr. 1482.


We review the district court’s determinations concerning the admissibility of evidence under the abuse of discretion standard. See United States v. Lerch, 996 F.2d 158, 162 (7th Cir. 1993). Our circuit’s traditional four-part test to determine the admissibility of evidence under Rule 404(b) permits the admission of prior acts when:

(1) the evidence is directed toward establishing a matter in issue other than the defendant’s propensity to commit the crime charged, (2) the evidence shows that the other act is similar enough and close enough in time to be relevant to the matter in issue, (3) the evidence is sufficient to support a jury finding that the defendant committed the similar act, and (4) the probative value of the evidence is not substantially outweighed by the danger of unfair prejudice.

United States v. Asher, No. 98-1700, 178 F.3d 486, 491 (7th Cir. May 21, 1999). Our review, on appeal, of the district court’s application of Rule 404(b) requires us to “ascertain whether the tendered evidence is directed toward establishing a matter in issue other than the defendant’s propensity to commit the charged crime.” United States v. Allison, 120 F.3d 71, 74 (7th Cir.), cert. denied, 118 S. Ct. 455 (1997) (emphasis added). When the defendant is charged with a specific intent crime, as Mr. Gellene is, “the government may present other acts evidence to prove intent.” United States v. Lewis, 110 F.3d 417, 420 (7th Cir.) (quoting United States v. Long, 86 F.3d 81, 84 (7th Cir. 1996)) (citations and internal quotation marks omitted), cert. denied, 118 S. Ct. 149 (1997). The admission of evidence of other crimes for that limited purpose is proper.

We cannot say that the district court abused its discretion in admitting the evidence. The district court was correct in its determination that Mr. Gellene had placed his intent in issue. It was clear from the parties’ opening statements that the facts were basically not in dispute and that the focus of the trial would be on the intention underlying Mr. Gellene’s conduct.22 On this record, we also think that the district court was entitled to conclude that Mr. Gellene’s false representations regarding his bar status and his other misrepresentations were similar enough in nature to the charged offenses to be relevant. Both the charged conduct and these other misrepresentations involve intentional misrepresentations before a court. The evidence admitted by the district court, like the offenses of conviction, tended to show intentional dishonesty, absence of mistake, and a cavalier disregard for the truth in his dealings with tribunals. For instance, Mr. Gellene’s intentional deception in falsely representing to various courts (including the United States District Court for the Eastern District of Wisconsin) that he was a member of the bars of other courts, when he was not, is not dissimilar to his intentional deception in falsely representing to the bankruptcy court that he had no connection with other parties in interest in the bankruptcy, when in fact he was representing the major secured creditor. Certainly, his attempt to treat the earlier conduct as de minimis, trivial, a matter of neglect, a matter of embarrassment but not a knowing deception– when the circumstances evince knowing deception– is similar to the dishonesty reflected in his filings of the two fraudulent disclosure statements and the perjurious statement he made subsequent to the filing of those documents in order to win the requested $2 million fee award.23

Even when such evidence has a slight tendency to show Mr. Gellene’s propensity to commit wrongs, “its predominant effect pertained to the legitimate purpose of proving [the defendant’s] intent.” United States v. Sinclair, 74 F.3d 753, 761 (7th Cir. 1996) (affirming district court’s discretionary decision to admit evidence that the defendant had signed certificates affirming that he complied with the bank’s code of conduct but had not obtained permission to serve as an officer of another corporation, as the code required). We note, moreover, that the district court instructed the jury that Mr. Gellene was “not on trial for any act or conduct not alleged in the indictment” and that the jury was allowed to consider “evidence of acts of the defendant other than those charged in the indictment . . . only on the question of the defendant’s intent.” Jury Instructions at 4, 9. Given these limiting instructions, we cannot say that the danger of prejudice outweighed the probity of the evidence. The district court did not abuse its discretion in admitting evidence of Mr. Gellene’s false representations and omissions concerning his bar status with respect to the “narrow issue” of his intent.

D. The Court’s Sentencing Determinations

1. U.S.S.G. § 3B1.3

Mr. Gellene contends that the district court erroneously enhanced his conviction on Count 3, the perjury charge, under U.S.S.G. § 3B1.3 for abuse of a position of trust. According to Mr. Gellene, he does not occupy a position of trust with respect to his client Bucyrus, the bankruptcy court, the creditors, or his law partners.

We review a district court’s interpretation of “position of trust” de novo. However, because the question whether the defendant occupied a position of trust is a factual one, we review that determination for clear error. See United States v. Bhagavan, 116 F.3d 189, 192 (7th Cir. 1997). The § 3B1.3 adjustment is appropriate if (a) the defendant occupied a position of trust, and (b) his abuse of the position of trust significantly facilitated the offense. See United States v. Emerson, 128 F.3d 557, 562 (7th Cir. 1997). Whether a defendant holds a position of trust depends on the amount of professional managerial discretion he has been given, see § 3B1.3, or on his “access or authority over things of value.” United States v. Lamb, 6 F.3d 415, 419 (7th Cir. 1993). When a person is given a great deal of autonomy by his employer, for example, and is in a position to steal or to do other harm without being caught, that person, if he abuses that trust, may be punished more heavily. See United States v. Deal, 147 F.3d 562, 563 (7th Cir. 1998).

Mr. Gellene was a bankruptcy lawyer representing a large corporate client in bankruptcy. He held a position of considerable professional discretion. See § 3B1.3 n.1 (giving the example that a lawyer who embezzles from his client abuses a position of trust). In our view, Mr. Gellene, as lead Milbank lawyer in the Bucyrus bankruptcy, occupied a position of trust.

We next ask, therefore, whether Mr. Gellene’s abuse of his role as attorney for the debtor significantly facilitated the commission of the perjury. The district court determined that it did; Mr. Gellene, as counsel for Bucyrus, abused that position of trust by concealing critical information from his client, namely his representation of the senior secured creditor, South Street. Mr. Gellene’s offense was lying about those representations in the Rule 2014 disclosure statements, at the bankruptcy fees hearing, and over a two-year period during which Bucyrus was never told of the conflicting representation. As the district court stated, such nondisclosure constituted a serious breach of trust and of “the ethical obligations that one owes to his client to be free from all the intrusions that surround potential conflicts of interest.” Sent. Tr. 103.

We believe there was no error in the district court’s imposition of the enhancement. Mr. Gellene’s position representing the debtor brought with it fiduciary duties to act in the debtor’s interest throughout the bankruptcy proceeding. See Bhagavan, 116 F.3d at 193 (concluding that the president/majority shareholder, with fiduciary duties to act in the interests of minority shareholders, occupied a position of trust). His undisclosed representation of the senior secured creditor of the debtor certainly created a potential if not actual conflict of interest and thus was a breach of his position of trust with the debtor. Mr. Gellene also abused his position of trust as an officer of the bankruptcy court by using his fraudulent sworn document to verify his perjurious sworn testimony.

2. Imposition of fine

Mr. Gellene claims that the district court did not properly consider his inability to pay the $15,000 fine imposed on him at sentencing. He asserts that the government miscalculated his net worth at $360,131.50 and that he actually is insolvent with three daughters dependent upon him for financial support. According to Mr. Gellene, the fine was imposed in disregard of the applicable sentencing standards and must be set aside.

Section 5E1.2 mandates that a district court impose a fine on a defendant unless he “establishes that he is unable to pay and is not likely to become able to pay any fine.” U.S.S.G. § 5E1.2(a). It is the defendant’s burden to demonstrate that he lacks the ability to pay. It is the court’s duty to consider the factors for imposition of a fine found in U.S.S.G. § 5E1.2(d) and 18 U.S.C. § 3572.24 See United States v. Young, 66 F.3d 830, 838 (7th Cir. 1995). We do not require that the sentencing court make specific findings regarding each of the relevant factors, however; in fact, the articulation of findings may be satisfied by adopting the PSR findings. See United States v. Bauer, 129 F.3d 962, 966 (7th Cir. 1996). “[T]he sentencing court must consider the relevant factors and provide a reasoned and reviewable basis for its decision to impose a fine.” Id. at 968.

In this case, the record makes clear that the district court spent considerable time properly considering the relevant factors. The court followed the PSR’s factual findings, questioned Mr. Gellene concerning his current financial situation, and then asked Mr. Gellene and his attorney to meet over lunch with the probation officer who prepared the presentence report in order to provide to the court “a little detail about where all this money went in the last six years.”25 Sent. Tr. 69. The probation officer’s notes from that discussion became a supplement to the PSR–a supplement created by both parties. See Bauer, 129 F.3d at 969 (recognizing that the defendant approved the supplement to the PSR). The court reviewed the material and questioned Mr. Gellene further concerning the estimated unpaid taxes and life insurance. He noted the high cost of living in New York and costs involved in schools for his daughters. After assessing Mr. Gellene’s financial situation along with the nature of his conduct, the court believed that “the interests of justice and the interests of society” required some fine within the guideline range. Sent. Tr. 146. It determined that $15,000 was the appropriate fine within the guideline fine range of $4,000 to $40,000 for his offense level.

In our view, the district court gave Mr. Gellene the opportunity to prove his inability to pay a fine when it asked him to meet again with the probation officer over lunch. It carefully reviewed Mr. Gellene’s claim of insolvency during the sentencing hearing before rejecting it. Mr. Gellene has given us no grounds for re-evaluating the district court’s decision on this matter. The district court was within its discretion, and committed no error, when it fined Mr. Gellene. Moreover, “‘we have no authority to inquire into the precise amount of the fine the district judge specified,’ because claims ‘that the judge should have made a greater departure . . . [are] outside our jurisdiction.'” United States v. Sanchez- Estrada, 62 F.3d 981, 995 (7th Cir. 1995) (quoting United States v. Gomez, 24 F.3d 924, 927 (7th Cir.), cert. denied, 513 U.S. 909 (1994) (citation omitted)); see also Young, 66 F.3d at 439-40 (concluding that we are without authority to depart below the minimum fine level).


For the foregoing reasons, we affirm the judgment of the district court.



According to Assistant United States Trustee John Byrnes, South Street Funds purchased Bucyru- s’ manufacturing equipment pursuant to a lease- back arrangement in order to raise money prior to the bankruptcy. Therefore, South Street is a creditor that held the debtor’s equipment along with other secured debts.

Filing bankruptcy along with Bucyrus was a related corporate entity called B-E Holdings, Inc.

Rule 2014, “Employment of Professional Persons,” states:

(a) Application for an order of employment

An order approving the employment of attorneys, accountants, appraisers, auctioneers, agents, or other professionals . . . shall be made only on application of the trustee or committee. The application shall be filed and . . . a copy of the application shall be transmitted by the applicant to the United States trustee. The application shall state the specific facts show- ing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the professional services to be ren- dered, any proposed arrangement for compensation, and, to the best of the applicant’s knowledge, all of the person’s connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. The applica- tion shall be accompanied by a verified statement of the person to be employed setting forth the person’s connections with the debtor, creditors, or any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee.

Fed. R. Bankr. P. 2014 (emphasis added).

The bankruptcy court also told Mr. Gellene: “New York is different from Milwaukee. . . . Professional things like conflicts [of interest] are taken very, very seriously. And for better or worse you’re stuck in Wisconsin.” Tr. 916.

In November 1993, after Salovaara’s partner Alfred Eckert decided to pursue employment else- where, Salovaara threatened and ultimately took legal action against him. Milbank served as Salovaara’s attorney through June of 1994, al- though a New Jersey firm was listed as the counsel of record in the initial litigation. The dispute between Salovaara and Eckert involved control of South Street and Greycliff; it was still ongoing in 1998. On December 9, 1993, during the Salovaara-Eckert dispute, Mr. Gellene and other Milbank lawyers began representing South Street and Greycliff in an acquisition of a $15 million note and claim in the Colorado bankruptcy of George Gillett. Mr. Gellene was the Milbank partner in charge of the matter. In fact, Mr. Gellene billed work on this project the same day that he signed his second declaration in the Bucyrus case.

An internal Milbank memorandum stated that the matter had been “billed prior to a conflict arising in connection with our representation of Bucyrus-Erie in its bankruptcy.” Tr. 500; Ex. 48. Nevertheless, Milbank did continue to represent South Street/ Greycliff in this matter in 1995 and 1996, and Mr. Gellene directly participated in this further work.

Mr. Gellene’s internal memo explained the write-off:

These charges represent fees and expenses incurred prior to February 18, 1994, the date of filing of the chapter 11 petition for Bucyrus- Erie. Under bankruptcy law, retaining these amounts as receivable would cause the firm to be a creditor of Bucyrus-Erie, creating both a potential conflict of interest and potential grounds for disqualification and denial of post- bankruptcy fees. I do not believe the risk is worth taking in view of the amount of the re- quested write-off, which is less than one-percent of all pre-bankruptcy fees.

Tr. 503-04; Ex. 50.

On June 20, 1994, the bankruptcy court had rejected the disclosure statement submitted as part of the proposed Bucyrus reorganization on the ground that the statement had failed to make complete disclosures on some matters, including inadequate disclosure of the roles of Salovaara, South Street and Greycliff in Bucyrus’ pre-bank- ruptcy dealings and failure to explain why cer- tain parties–including Salovaara, South Street and Greycliff–were receiving releases from future litigation. However, the court urged the parties to settle these issues and to agree upon a plan of reorganization by the end of 1994 for tax reasons.

Based on Mr. Gellene’s false statements, the bankruptcy court subsequently directed Milbank to return the $1.8 million to the bankruptcy estate.

§ 152. Concealment of assets; false oaths and claims; bribery.

A person who–

. . .

(3) knowingly and fraudulently makes a false declaration, certificate, verification, or state- ment under penalty of perjury . . . in relation to any case under title 11; . . . shall be fined under this title, imprisoned not more than 5 years, or both.

Federal Rule of Bankruptcy Procedure 2014 is presented in full in footnote 3.

The district court set forth the following elements of a § 152 violation: (1) a bankrupt- cy proceeding existed under Title 11 of the United States Code; (2) the defendant made a statement relating to the proceedings; (3) the statement was made under penalty of perjury; (4) the statement related to a material matter; (5) the statement was false; and (6) the statement was made knowingly and fraudulently. Mr. Gellene does not deny that the applications were sworn declarations in a bankruptcy case which were false and knowingly made. He challenges only two elements of the crime, namely that the false statements were “fraudulently made” and “material.”

The bankruptcy treatise Collier on Bankrupt- cy states that a false oath or account, to be “knowingly and fraudulently” made, “must have been intentionally made with the purpose of deceiving or cheating parties affected by the bankruptcy case.” 1 Collier on Bankruptcy ¶ 7.02[2][a][v] at 7-47 to 7-48 (Lawrence P. King ed., 15th ed. rev. 1999).

See Merriam-Webster’s Collegiate Dictionary (10th ed. 1998) (synonym of “fraudulent” is “deceitful”); Black’s Law Dictionary (5th ed. 1979) (“To act with ‘intent to defraud’ means to act willfully, and with the specific intent to deceive or cheat.”).

See also Lindholm, 24 F.3d at 1083-84 (criminal statute § 152 applies even if false statements do not affect the outcome of the bankruptcy proceedings); United States v. Yagow, 953 F.2d 427, 432-33 (8th Cir.) (citing cases and holding that debtor’s sworn statement attesting to his lack of employment, aimed at securing in forma pauperis status before the tribunal, is material), cert. denied, 506 U.S. 833 (1992); In re Robinson, 506 F.2d 1184, 1188-89 (2d Cir. 1974) (holding that materiality does not require a showing that the creditors were prejudiced by the false statement); cf. United States v. Grant, 971 F.2d 799, 808-09 (1st Cir. 1992) (rejecting contention that § 152 implicitly requires that concealment involve a substantial amount of property material to the estate).

The statute, in pertinent part, states: § 1623. False declarations before grand jury or court.

(a) Whoever under oath (or in any declaration . . .) in any proceeding before or ancillary to any court or grand jury of the United States knowing- ly makes any false material declaration or makes or uses any other information, including any book, paper, document, record, recording, or other material, knowing the same to contain any false material declaration, shall be fined under this title or imprisoned not more than five years, or both.

U.S.C. § 1623

Congress adopted § 1623 in 1970 in the Organized Crime Control Act of 1970. It was enacted “to facilitate Federal perjury prosecu- tions and establish a new false declaration provision applicable in federal grand jury and court proceedings.” H.R. Rep. No. 91-1549, 91st Cong., 2d Sess., reprinted in 1970 U.S.C.C.A.N. 4007, 4008. For discussions of the similarities and distinctions of these statutes, see Dunn v. United States, 442 U.S. 100, 107-12 (1979); Sherman, 150 F.3d at 310-12; United States v. Molinares, 700 F.2d 647, 651-52 (11th Cir. 1983); United States v. Watson, 623 F.2d 1198, 1207 (7th Cir. 1980); and United States v. Gross, 511 F.2d 910, 914-15 (3d Cir.), cert. denied, 423 U.S. 924 (1975). See also Kathryn Kavanagh Baran & Rebecca I. Ruby, Perjury, 35 Am. Crim. L. Rev. 1035 (1998).

For a compendium of cases applying the term “use” in § 1623, see Baran & Ruby, supra note 17, at 1041 n.38.

Mr. Gellene relies on Bronston v. United States, 409 U.S. 352 (1973), when claiming that literally true statements cannot form the basis for a perjury conviction. In Bronston, the presi- dent of the debtor corporation was examined as a witness by a creditor’s lawyer. He answered all the questions truthfully; however, the lawyer never asked him directly if he had a personal bank account in Switzerland, and one of his answers implied that he did not. When the govern- ment discovered the Swiss account, it charged him with perjury for misleading the questioner by answering in a literally truthful but unrespon- sive way. The Supreme Court characterized the lawyer’s questioning of the witness as “a testi- monial mishap that could readily have been reached with a single additional question by counsel alert–as every examiner ought to be–to the incongruity of petitioner’s unresponsive answer.” Bronston, 409 U.S. at 358. The Court placed the blame on the attorney for failing “to recognize the evasion and to bring the witness back to the mark, to flush out the whole truth with the tools of adversary examination.” Id. at 358-59. It concluded that the perjury prosecution was a “drastic sanction to cure” that testimonial mishap, one that the statute did not intend. “Precise questioning is imperative as a predicate for the offense of perjury.” Id. at 362.

As can readily be seen, Bronston is inapposite to the case before us. It focuses on adversary examination of a witness; it does not encompass a case in which the witness orchestrates his own false evidence under direct examination through the planned questions of his own attorney. Mr. Gellene has no basis on which to rely on Bronston.

The government explained that South Street and Greycliff were investment entities engaging in the same type of transactions as Goldman Sachs. Although set up as separate “legal struc- tures” for “legal and tax reasons,” South Street and Greycliff were one and the same for opera- tional purposes. The amount in the funds was $180 million, making it larger than many banks. The money had been raised from pension funds, insur- ance companies and individual investors. South Street and Greycliff were run by Mikael Salovaara and Alfred Eckert, two men who had operated similar, successful investment vehicles while working for Goldman Sachs and believed they could do the same or better away from Goldman Sachs. In essence, Eckert served as chairman and Salovaara as president.

South Street’s $35 million investment in Bucyrus was a secured loan structured, in part, as a sale/lease-back of company assets. At trial, Eckert characterized the transaction: “We loaned the money and we were collateralized by all the assets of the company . . . like a mortgage so that we would be paid off first if there was a problem.” Tr. 573. In the bankruptcy case, Mr. Gellene himself characterized South Street as the “major secured lender” of Bucyrus. Tr. 968.

South Street and Greycliff were multi-million dollar organizations, not individuals. As such, they were “institutions” or “institutional.” South Street

Jack The Ripper | September 28, 2012 at 9:57 pm

Maybe it relates to what can happen when one makes false statements under oath (or verified) to the Court under Federal Rules of Bankruptcy Procedure 2014, which is what appears to have happened in the document that Professor Jacobson posted entitled:


in the Kaiser Aluminum Corp. case.