141 A.D.3d 90
N.Y. App. Div.2016Background
- Lawrence R. Goldfarb (admitted 1985) was suspended in 1998 for failure to register and has remained suspended; he resides in California.
- In 2014 Goldfarb pleaded guilty in the U.S. District Court (N.D. Cal.) to wire fraud (18 U.S.C. § 1343) and was sentenced to 14 months’ imprisonment and three years’ supervised release.
- As managing partner of Baystar Capital II, L.P., Goldfarb diverted funds from a 2003 Island Fund LLC “side pocket” distribution (over $16 million gross) to other entities, some in which he had an interest, and failed to disclose distributions to investors.
- He entered a deferred prosecution agreement and an SEC consent judgment in 2011 agreeing to disgorge ≈$12 million; he later was found in civil contempt for failing to pay and a receiver was appointed; the breach led to the criminal prosecution.
- The Departmental Disciplinary Committee sought automatic disbarment (Judiciary Law § 90[4][b]/[e]) on the ground the federal wire fraud conviction is essentially similar to NY scheme to defraud in the first degree, and alternatively sought suspension/discipline; Goldfarb did not respond to the petition.
Issues
| Issue | Petitioner (DDC) Argument | Respondent (Goldfarb) Argument | Held |
|---|---|---|---|
| Whether Goldfarb’s federal wire fraud conviction mandates automatic disbarment under Judiciary Law § 90(4)(e) because it is essentially similar to a NY felony | The plea admissions and charging instrument establish the conduct satisfies Penal Law § 190.65(1)(b) (scheme to defraud 1st deg.), so automatic disbarment is required | No response submitted; record did not include a contrary factual or legal contention | Held: The federal conviction is "essentially similar" to NY scheme to defraud in the first degree; name stricken nunc pro tunc to April 15, 2014 |
| Whether alternative disciplinary remedies or immediate suspension are appropriate given failure to report conviction and other misconduct | DDC alternatively asked for suspension or show-cause for censure/suspension/disbarment; noted Goldfarb failed to report conviction as required | No response submitted | Court granted automatic disbarment; alternative remedies need not be addressed further |
Key Cases Cited
- Matter of Rosenthal, 64 A.D.3d 16 (1st Dep’t 2009) (federal felony triggers disbarment only if essentially similar to NY felony)
- Matter of Margiotta, 60 N.Y.2d 147 (1983) (standard: federal offense must be essentially similar, not mirror image)
- Matter of Adams, 114 A.D.3d 1 (1st Dep’t 2013) (plea allocution plus charging instrument may establish essential similarity)
- Matter of Lin, 110 A.D.3d 186 (1st Dep’t 2013) (same: use of plea admissions to establish equivalence)
- Matter of Sorin, 47 A.D.3d 1 (1st Dep’t 2007) (comparing federal and state offenses for disciplinary disbarment)
- Matter of Klein, 28 A.D.3d 102 (1st Dep’t 2006) (recognizing wire fraud lacks direct NY felony analogue in some contexts)
- Matter of Mercado, 1 A.D.3d 54 (1st Dep’t 2003) (same)
- Matter of Muraskin, 302 A.D.2d 33 (1st Dep’t 2002) (found federal wire fraud essentially similar to Penal Law § 190.65(b)(1) based on plea admissions)