In Re Barry Downey
162 A.3d 162
| D.C. | 2017Background
- Barry K. Downey, D.C. Bar member since 1989, was an officer/director of E-GOLD/GSR, a digital-currency business backed by gold.
- Federal and D.C. law evolved in 2001–2003 to require licensing of money transmitters; E-GOLD sought and received mixed, ambiguous legal advice (informal advice from Seidl, a 2003 Drinker Biddle memorandum, and later advice from Mitchell Fuerst).
- In 2007 Downey was charged with multiple offenses; he pled guilty to a strict-liability felony under D.C. Code § 26-1002 for operating an unlicensed money-transmitting business; other charges (including conspiracy/money laundering) were dismissed.
- At sentencing Downey said he did not intend to violate the law and had relied on experts; Judge Collyer found him credible and imposed a suspended jail term, probation, and a fine.
- Disciplinary proceedings focused on whether the felony involved moral turpitude and whether Downey was dishonest about relying on counsel; the Hearing Committee and the Board found no clear and convincing evidence of moral turpitude or dishonesty and recommended an informal admonition.
- The D.C. Court of Appeals deferred to credibility findings and the Board, held Disciplinary Counsel failed to prove moral turpitude or dishonesty by clear and convincing evidence, and affirmed issuance of an informal admonition for the felony conviction.
Issues
| Issue | Disciplinary Counsel's Argument | Downey's Argument | Held |
|---|---|---|---|
| Whether the felony involved moral turpitude | Conviction and related allegations show facilitation of crimes (fraud, child pornography), so moral turpitude on the facts | The conviction was for a strict-liability licensing offense; no admission or proof of underlying immoral acts | No moral turpitude; prosecutorial allegations insufficient and burden not met |
| Whether Downey was dishonest in claiming reliance on counsel | Documentary evidence (Drinker Biddle memo) contradicts reliance; statements were misleading | He repeatedly sought outside advice; memos were ambiguous and he believed them inaccurate; credible testimony | No clear and convincing proof of dishonesty; Board/Hearing Committee credibility findings upheld |
| Appropriate sanction for felony conviction | Request for disbarment or long suspension given seriousness and public-risk implications | Informal admonition suffices given conviction arose outside practice, regulatory uncertainty, clean disciplinary record | Informal admonition affirmed; public protection goals met by criminal prosecution and circumstances warrant leniency |
| Standard of proof and deference to factfinders | Clear and convincing evidence required for moral turpitude/dishonesty; appellate review de novo on law but defer to credibility | Same; asked court to accept Board recommendation and defer to findings | Court applied heightened burden, deferred to substantial-evidence-supported credibility findings, and adopted Board recommendation |
Key Cases Cited
- In re Allen, 27 A.3d 1178 (D.C. 2011) (clear-and-convincing burden for moral-turpitude findings; severity of misconduct still relevant)
- In re Cater, 887 A.2d 1 (D.C. 2005) (disciplinary counsel must prove facts justifying enhanced sanction by clear and convincing evidence; sanctions aim to protect public and profession)
- In re Rehberger, 891 A.2d 249 (D.C. 2006) (definition of moral turpitude in attorney-discipline context)
- In re Daniel, 11 A.3d 291 (D.C. 2011) (court generally adopts Board sanction recommendations unless inconsistent or unwarranted)
- In re Martin, 67 A.3d 1032 (D.C. 2013) (appellate review: de novo on law/ultimate facts, defer to Hearing Committee credibility and factual findings)