IN THE SUPREME COURT OF OHIO

OFFICE OF DISCIPLINARY COUNSEL,

Relator 6®2331Case no.: 05-066

vs.

LOREN J. MARGOLIS, ESQ.,

Respondent

RESPONDENT'S OBJECTIONS TO, AND BRIEF IN SUPPORT OFTHE FINDINGS OF FACT, CONCLUSIONS OF LAW AND RECOMMENDED

SANCTION OF THE BOARD OF COMMISSIONERS ON GRIEVANCESAND DISCIPLINE OF THE SUPREME COURT OF OHIO

RICHARD S. KOBLENTZCRAIG J. MORICEKOBLENTZ & KOBLENTZ55 PUBLIC SQUARE - SUITE 1170CLEVELAND, OH 44113(216) 621-3012(216) 621-6567 (FAX)

ATTORNEYS FOR RESPONDENT,LOREN J. MARGOLIS, ESQ.

JONATHAN E. COUGHLAN, ESQ.CAROL A. COSTA, ESQ.OFFICE OF DISCIPLINARY COUNSEL250 CIVIC CENTER DRIVE, SUITE 325COLUMBUS, OH 43215-7411(614) 461-0256(614) 461-7205 (FAX)

COUNSEL FOR RELATOR

EIDJAN 17 2007

MARCIA J MENGEL, CLERKSUPREME CUURT nF OHiU

TABLE OF CONTENTS

oeae

TABLE OF AUTHORITIES ii

1. FACTS

II. LAW AND ARGUMENT

A. Introduction

1

3

3

B. Mitigating and Aggravating Factors 3

1. "Several" letters from customers in support 3

ii. Non-acceptance of responsibility 5

iii. Excuse-making; credibility 6

iv. Finding 22 is false and unsupportedby the record 7

C. Recommended Sanction 8

Ill. CONCLUSION 12

CERTIFICATE OF SERVICE

APPENDIX

A. Order to Show Cause, filed December 29, 2006

13

B. Findings of Fact, Conclusions of Law and Recommendationof the Board of Commissioners on Grievances and Disciplineof the Supreme Court of Ohio

TABLE OF AUTHORITIES

Ohio cases pmrd(s)

Akron Bar Association v. Peters, 94 Ohio St.3d 215 (2001). 11

Cincinnati Bar Association v. Hennekes, 110 Ohio St.3d 108 (2006). 9,10

Cleveland Bar Association v. Stein, 29 Ohio St.2d 77 (1972). 10

Cuyahoga County Bar Association v. Garfield, 109 Ohio St.3d 103 (2006). 10

'j^ayton Bar Association v . Seall, 81 Ohio St.3d 280 (1998). 11

Disciplinarv Counsel v. Blaszak, 104 Ohio St.3d 330 (2004). 10-11

Disciplinary Counsel v. Cook, 89 Ohio St.3d 80 (2000). 11

Disci Ip inarv Counsel v. Dubyak, 92 Ohio St.3d 18 (2001). 11

Disciplinary Counsel v. Lash, 68 Ohio St.3d 12 (1993). 11

Disci linary Counsel v. Mesi, 72 Ohio St.3d 45 (1995). 7

Disci linary Counsel v. Miller, 79 Ohio St.3d 115 (1997). 11

Disciplinary Counsel v . Petroff, 85 Ohio St.3d 396 (1999). 11

Disciplinary Counsel v. Smith, 69 Ohio St. 475 (1994). 11

Disci lina[y Counsel v. Trumbo, 76 Ohio St. 369 (1996). 7

On or about January 15, 2004, the Respondent herein, Loren J. Margolis was, along

with two other corporate entities and his father-in-law, indicted in the United States District

Court for the Northem District of Ohio alleging, inter alia, violations of 15 U.S.C. §1 (the

Sherman Anti-Trust Act) with regard to bidding and pricing practices as they existed in the

scrap-metals industry in the greater Cleveland, Ohio area market. As set forth fully in the

Agreed Stipulations and Joint Exhibits filed with the Board of Commissioners on

Grievances and Discipline of the Supreme Court of Ohio (hereinafter "Board") Mr. Margolis

entered a guilty plea in March, 2005 to two counts of violating 15 U.S.C. §1 in the matter

styled as United States of America v. M. Weinggold & Co., et al., case no.: 1:04 CR 0030,

in the United States District Court for the Northern District of Ohio, Eastern Division. See

Joint Exhibits 1 and 2, respectively.

On May 11, 2005, Judge Donald C. Nugent of said court sentenoed him, inter alia,

to five months' imprisonment, five months' home confinement, one year of post-release

control, and payment of $700,200.00 in combined fines and special assessment. Mr.

Margolis has served his term of incarceration, said fines and special assessment have

been paid, and his term of post-release control has been terminated, approximately one

year early by Judge Donald C. Nugent of the United States District Court for the Northern

District of Ohio. Further, Mr. Margolis, as was verified by testimony, continues to

cooperate with the United States Attorney in its investigation of the scrap metal industry.

1

On August 2, 2005, during Mr. Margolis' incarceration, he was suspended by this

Honorable Court from the practice of law for an interim period for the above-mentioned

conviction pursuant to Rule V(5)(A)(3) for the Government of the Bar. It is of note that Mr.

Margolis self-reported the fact of this conviction approximately one month prior to his

sentencing by correspondence transmitted to the Office of Disciplinary Counsel on April

11, 2005. See Joint Exhibits 3 and 5, respectively.

On August 10, 2006 in Columbus, Ohio, the instant matter was heard by a panel of

the Board. Of particular note is that prior to said hearing, the Office of Disciplinary

Counsel of the Supreme Court of Ohio (hereinafter "Disciplinary Counsel") and counsel

for Mr. Margolis, had entered into agreed stipulations and had submitted joint exhibits to

the Panel and Board; all of which, in the view of the undersigned, embraced the totality of

facts and issues involved herein. See Joint Exhibits I through 9, generally (the Agreed

Stipulations appear as Joint Exhibit 9).

Counsel for Mr. Margolis, without objection, also submitted 93 letters testimonial by

way of mitigation along with his pre-hearing brief. It was the belief of Disciplinary Counsel,

counsel for Mr. Margolis, and Mr. Margolis himself, that given the volume of materials

evaluated and submitted by both parties hereto, statements made throughout, and the

stipulations agreed upon, that the Panel and Board sought the August 10, 2006 hearing

in order to evaluate Mr. Margolis in person, and perhaps address certain questions they

might raise regarding the materials already submitted to them.

On the whole, the hearing met with the parties' expectations, but the Findings of

Fact, Conclusion of Law and Recommendation of the Board of Commissioners on

2

Grievances and Discipline (hereinafter "Findings") issued on December 19, 2006 did not

so reflect. In particular, and as discussed more fully infra, the factors found in aggravation,

and the case relied upon by the Board to support its recommended sanction, both misstate

the record created and do not comport with established precedent.

II. LAW AND ARGUMENT

A. Introduction

At the outset, counsel for Mr. Margolis would submit that given the cooperative and

collegial manner in which this case was handled, it may appear overiy contentious to

object to the Findings issued by the Board in this matter. However, counsel would further

posit that given the interest at stake herein, the public nature of these proceedings, and

the overriding purpose of the attorney discipline process in Ohio, the record of this case

as reported in the Board's Findings must be clarified and corrected.

B. Mitigating and Aggravating Factors

1. "Several" letters from customers in support

While counsel for Mr. Margolis must concede that at a minimum, it appears that the

Board took into account the letters testimonial submitted on Mr. Margolis' behalf, it is his

belief that these letters were not given sufficient weight as it relates to not only mitigation

of the misconduct stipulated to, but also the overall character of Mr. Margolis. By their

sheer volume alone, these 93 letters (30 of which were from customers who were the

3

victims of the underlying anti-trust matter) constitute in counsel's view, more than just

"several letters" or "some" evidence in mitigation'.

It is not uncommon for the undersigned, on behalf of their clients, to submit a

number of letters gathered in support of their clients enmeshed in the attorney discipline

process to the Board, for potential further review by this Honorable Court. Counsel for Mr.

Margolis would be hard-pressed to recall a previous matter where a client has received the

amount and caliber of letters testimonial submitted on behalf of Mr. Margolis. The 93

letters testimonial submitted to the Board, without objection by Disciplinary Counsel,

uniformly attest to Mr. Margolis' competency, professionalism, kindness, and decency,

whether in his profession or in his personal life. While admittedly many of these letters

were previously submitted as mitigation in the underlying federal criminal matter, their

content is more meaningful herein.

It is of further note that the letters attached hereto are not only from those in the

legal profession or former clients, but are also from those having business dealings with

him, or personal relationships unrelated to business or law. The truly unique aspect of

these 93 letters, however, is the number of testimonials from persons and entities who

were the victims of the anti-trust actions to which Mr. Margolis pled.

Counsel would again posit that these testimonials should be given the greatest

weight by this Honorable Court. As such, they provide a complete and accurate depiction

"'SeveraP" is defined as an adjective meaning "more than two, but not many...."New Webster's Dictionary and Thesaurus of the English Language, LexiconPublications (1992). As such, 93 is more than "several" when describing the number ofletters testimonial submitted on Mr. Margolis' behalf.

4

of Mr. Margolis as an honest, fair, and decent man whose services andlor friendship is

highly valued, if not cherished. In no way do these letters depict a man from whom the

public should be protected; on the contrary, he is, as a lawyer and a human being, a man

who serves the public well and has eamed their trust.

if. Non-acceptance of responsibility

Counsel for Mr. Margolis, in the course of representing attorneys charged with

attomey misconduct, has often commented that the hearing panels appointed by the Board

are often excellent arbiters of fact and law, dealing thoroughly and fairly with the evidence

presented. Respectfully, however, it is clear that in its finding some five aggravating

factors herein, the Panel and Board misstated the record before it; to the extent that it

made patently false statements inuring to Mr. Margolis's detriment.

In paragraph 19 of its Findings, the Board states that by way of aggravation, Mr.

Margolis "did not accept responsibility for his actions in the anti-trust activities." In short,

nothing could be further from the truth: See, e.g., Joint Exhibit 2, p. 9, para. 9(b) (written

Plea Agreement in United States v. M. Weingold & Company. et al., case no.: 1:04 CR

0030; sentencing agreement executed by Mr. Margolis, noting a two-level reduction in

offense level for sentencing purposes based upon "acceptance of responsibility" pursuant

to United States Sentencing Guideline §3E1.1(a)); Joint Exhibit 4, p.9, lines 5-10

(transcript of sentencing hearing in U.S. v. M. Weingold et al. on May 11, 2005; statement

of counsel for Mr. Margolis, corroborating the offense-level reduction for acceptance of

responsibility); Joint Exhibit 4, p.25, lines 11-14 (statement of Hon. Donald C. Nugent,

United States District Court Judge for the Northern District of Ohio, acknowledging and

5

recognizing Mr. Margolis' acceptance of responsibility for his offenses/activities for which

he had entered a plea of guilty).

In short, the United States Attomey, the United States Probation Department, the

United States District judge who presided over the underlying matter, the Office of

Disciplinary Counsel, and the Ohio Department of Commerce, none of whom have any

alliance with Mr. Margolis, all believe Mr. Margolis accepted responsibility for his actions.

iii. Excuse-making; credibility

lf the aggravating factor as found by the Board discussed above was not sufficiently

contrary to the state of record before it, there are the findings made in paragraphs 20, 21

and 23 of the Findings. In essence, they state that Mr. Margolis was persisting in his

statements of innocence, was not credible in his statements relating to his involvement

in the scrap-metal business and his level of awareness, given his status as an attorney,

as to the illegal nature of the bidding process commonly used therein. Moreover, the

Board appears to have found Mr. Margolis to be not credible overall, characterizing his

testimony as "making excuses" rather than providing an explanation for his actions.

Simply put, these findings, given the proceedings already had before the United

States District Court for the Northern District of Ohio, the Real Estate and Professional

License Division of the Ohio Department of Commerce, and the record of the August 10,

2006 hearing before the Board's panel, are absurd. See, e.g., Joint Exhibit 2 (its

entirety); Joint Exhibit 3(letter from counsel for Mr. Margolis to Disciplinary Counsel, self-

reporting his federal conviction and initiating the instant proceedings); Transcript of August

10, 2006 hearing, p.69, lines 17-19; pp. 75-76, lines 13-25, lines 1-5, 10-11; p. 86, lines

6

18-20 (evidence andlor testimony memorializing not only Mr. Margolis' current

understanding of the nature of the illegal conduct to which he pled guilty, but also his

current understanding of the import of such a plea).

Taken together, the Joint Exhibits submitted herein and the record made before the

hearing panel of the Board on August 10, 2006, portray Mr. Margolis as not only a person

who understands and acknowledges his role in the underlying criminal matter, but who

also understands that the entry of a plea of guilt cannot be subsequently characterized as

a "ceremony of innocence." Put another way, and as this Honorable Court has stated, Mr.

Margolis fully understands and acknowledges that "a guilty plea is not a ceremony of

innocence, nor can it be rationalized in a subsequent disciplinary proceeding."

Disci lip na[y Counsel v. Mesi, 72 Ohio St.3d 45, 49 (1995). However, it is equally

applicable to the instant proceedings that the purpose of attorney discipline proceedings

in Ohio is not to punish the attorney, but to protect the public. Disciplinary Counsel v.

Trumbo, 76 Ohio St.3d 372-373 (1996).

For the hearing panel and Board to find otherwise is not simply a matter of

misunderstanding or misinterpreting the facts placed upon the record made herein; it is a

case where, in the opinion of counsel for Mr. Margolis, the hearing panel and Board

ignored the record placed before it.

iv. Finding 22 is false and unsupported by the record

The panel and Board herein found as a factor in aggravation that Mr. Margolis "was

not forthcoming in his response to questions regarding his income. The Respondent

7

initially stated that his income was $25, 000 per year, whereas upon examination by the

panel, he admitted he got bonuses for around $200,000 per year."

Having reviewed the 123 pages of transcript from the August 10, 2006 hearing and

the totality of Joint Exhibits 1-9, nowhere is this finding supported. The only mentions of

Mr. Margolis' salary and/or income were: 1) that he was making $28,000.00 per year in his

role as an attomey (involved almost exclusively in real estate law and development) before

coming to work for his father-in-law in the scrap-metals business in approximately 1989;

and 2) that his approximate salary and bonus figure eamed from M. Weingold and Co. in

2000 was $200,000. See Transcript of August 10, 2006 Hearing at p.63, lines 16-20; pp.

115-116, lines 18-25, lines 1-9, respectively.

Again, Mr. Margolis and his counsel are at a loss to ascertain the source of this

finding, much less the Board's characterization of him as "not forthcoming." As such,

Finding 22, when viewed against the totality of the testimony and documentary evidence

compiled herein, is wholly unsupported and should not be considered by this Honorable

Court.

C. Recommended Sanction

It remains to consider whether the sanction recommended by the Board to be levied

upon Mr. Margolis, i.e., two year suspension with no credit for time served under the

August 2, 2005 interim suspension, is appropriate under the circumstances presented

herein and established precedent. While counsel concedes that the two year actual

suspension for the misconduct admitted is appropriate, counsel for Mr. Margolis would

posit that established Ohio precedent ail but mandates that under the circumstances

8

presented herein, said sanction should also include credit for time served under the interim

suspension currently in place. This conclusion rests upon at least two critical bases.

First, and as discussed at length above, Mr. Margolis was convicted of a federal

"white-collar" offense to which he entered a guilty plea. The record further demonstrates

that throughout not only those proceedings, but throughout the instant matter and those

had before the Ohio Department of Commerce, Mr. Margolis cooperated fully with all

concerned entities in all respects. Moreover, and as maintained by Mr. Margolis, his

counsel, and those submitting letters testimonial on his behalf, it should be borne in mind

that despite his education and experience as an attorney, and the facts surrounding his

training relative to the scrap-metal business, he did not learn or understand until the

federal investigation against him was revealed, that that industry's "accepted" business

practices in connection with pricing and bidding were considered violative of the Sherman

Antitrust Act. As such, Mr. Margolis came to understand, over time, that the manner in

which he engaged in business was, in fact, illegal; he was not so aware prior to, or during

his employment.

Second, and with those considerations in mind, the case relied upon by the Board

in its recommending that Mr. Margolis be suspended from the practice of law for two years

with no credit for time served under the August 2, 2005 interim suspension, Cincinnati Bar

Association v. Hennekes, 110 Ohio St.3d 108 (2006), is both distinguishable from, and

inapposite to, the instant case. As this Honorable Court is aware, Mr. Hennekes was

suspended from the practice of law for two years, with no credit for time served under the

interim suspension imposed for his federal conviction for conspiracy to distribute and

9

possess more than five kilograms of cocaine. t,d. Moreover, it was found that despite his

status as an attorney, he counseled his co-conspirators on various methods to evade

detection by law enforcement entities and/or arrest during the transfer of the cocaine. Id.

at 109.

These facts alone, when viewed against the evidence presented in the instant

case, are enough to distinguish it as inapplicable precedent. However, and going further,

it would appear that the Hennekes decision turned on the notion that as an attorney, no

matter your "practice niche," it is beyond cavil that cocaine is an extremely well-known

illegal substance, and that to counsel persons in methods to be used to evade law

enforcement in the transfer of this illegal substance essentially undermines the purpose

and oath to uphold the law taken by those licensed to practice law in Ohio. Hence, this

Court's quote from Cleveland Bar Association v. Stein, 29 Ohio St.2d 77 (1972), while

constituting an unassailable tenet relating to the practice of law, is more applicable to the

Hennekes facts than those presented herein. Hennekes, 110 Ohio St.3d at 110-11.

A review of Ohio attomey discipline cases in Ohio concerned with misconduct and

resulting sanction arising out of federal felony convictions for offenses analogous to those

to which Mr. Margolis pled reveals that the sanction suggested by the parties and counsel

hereto (a two-year suspension with credit for time served under the interim suspension)

but not adopted by the Board, is consistent with precedent. This clear line of precedent

is seen as follows: Cuyahoga County Bar Assn, v. Garfield, 109 Ohio St.3d 103 (May 3,

2006) (18 months' suspension with credit for time served under interim suspension for

federal bank fraud conviction); Disc' lim nary Counsel v. Blaszak; 104 Ohio St.3d 330 (2004)

10

(two year suspension with credit for time served under interim suspension for federal

conviction of selling witness testimony); Akron Bar Assn. v. Peters, 94 Ohio St.3d 215

(2001) (two-year suspension with credit for time served under interim suspension for

federal convictions relating to unlawful interest in a public contract, conflict of interest, and

conspiracy to commit mail fraud); Disciplinary Counsel v. Dubyak, 92 Ohio St.3d 18 (2001)

(two-year suspension with six months' stayed with credit for time served under interim

suspension imposed for federal mail fraud conviction); Disci Ipinaqr Counsel v. Cook, 89

Ohio St.3d 80 (2000) (six month suspension with credit for time served under interim

suspension for federal conviction for engaging in monetary transactions in property derived

from specified unlawful activity); Discjplinary Counsel v. PetrofF, 85 Ohio St.3d 396 (1999)

(one year suspension with credit for time served under interim suspension for federal

conviction of attempting to evade federal income taxes); Dayton Bar Assn, v. Seall, 81

Ohio St.3d 280 (1998) (one year suspension with credit for time served under interim

suspension for federal conspiracy to commit tax fraud conviction); Disc Iqpinarv Counsel v.

i ler, 79 Ohio St.3d 115 (1997) (one year suspension with credit for time served under

interim suspension for federal conviction of aiding and abetting the filing of a false

corporate tax return); Disciplinary Counsel v. Smith, 69 Ohio St.3d 475 (1994) (two-year

suspension with credit for time served under interim suspension for federal conviction of

theft of govemment property); Disciplinary Counsel v. Lash, 68 Ohio St.3d 12 (1993) (one

year suspension with credit for time served under interim suspension for federal bank fraud

conviction).

11

Taken together, all of the foregoing cases, coupled with the facts of the instant

matter as set forth and clarified herein, confirm that the imposition of a two year

suspension, with credit#ortime served under the interim suspension already imposed upon

Mr. Margolis, would fully comport with the purpose of attorney discipline proceedings in

Ohio. Moreover, said sanction would not unreasonably hinder Mr. Margolis' ability to

return to the practice of law and competently serve the public for an undue period of time.

III. CONCLUSION

In light of all of the above, Respondent Loren J. Margolis prays that this Honorable

Court duly consider these, his Objections to the Findings of Fact, Conclusion of Law and

Recommended of the Board of Commissioners on Grievances and Discipline of the

Supreme Court of Ohio, in its review of the instant matter, culminating in the imposition of

a sanction for attomey misconduct that is appropriate under the circumstances presented,

applicable law, and the purpose of attorney discipline in the state of Ohio.

Respectfully submitted,

RICHARD S. KOBLENTZ #0002677CRAIG J. MORICE #0065424KOBLENTZ & KOBLENTZ55 PUBLIC SQUARE - SUITE 1170CLEVELAND, OH 44113(216) 621-3012(216) 621-6567 [FAX)

ATTORNEYS FOR LOREN J. MARGOLIS

12

CERTIFICATE OF SERVICE

A copy of the foregoing has been served, via UPS NextDay Air, upon Jonathan E.

Coughlan, Esq. and Carol A. Costa, counsel for Relator, at the Office of Disciplinary

Counsel, 250 Civic Center Drive - Suite 325, Columbus, OH 43215-7411, this l64eday

of January, 2007.

Richard S. KoblentzCraig J. Morice

ATTORNEYS FOR LOREN J. MARGOLIS

13

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2006`^k^e ^zx^xe^e ^rrurt of (0 4 tia; :.^^RERa^r 4ntts.T nF ONto

Disciplinary Counsel,Relator,

V.Loren Margolis,

Respondent.

Case No. 06-2331

ORDER TO SHOW CAUSE

The Board of Commissioners on Grievances and Discipline of the Supreme Courtof Ohio has filed a Final Report in the office of the clerk of this court. This Final Reportrecommended that pursuant to Rule V(6)(B)(3) of the Supreme Court Rules for theGovernment of the Bar of Ohio the Respondent, Loren Margolis, Attomey RegistrationNumber 0007957, be suspended from the practice of law for a period of two years withno credit for time served. The Board further recommends that the costs of theseproceedings be taxed to the respondent in any disciplinary order entered, so thatexecution may issue. Upon consideration thereof,

It is ordered by the court that the respondent show cause why the reconnnendationof the Board should not be confirmed by the court and the disciplinary order so entered.

It is further ordered that any objections to the findings of fact andrecommendation of the Board, together with a brief insupport-thereof; shall be due on orbefore 20 days from the date of this order. It is further ordered that an answer brief maybe filed on or before 15 days after any brief in support of objections has been filed.

After a hearing on the objections or if no objections are filed within the prescribedtime, the court shall enter such order as it may find proper which may be the disciplinerecommended by the Board or which may be more severe or less severe than saidrecommendation.

It is further ordered, sua sponte, that all documents filed with this court in thiscase shall meet the filing requirements set forth in the Rules of Practice of the SupremeCourt of Ohio, including requirements as to form, number, and timeliness of filings.

It is further ordered, sua sponte, that service shall be deemed made on respondentby sending this order, and all other orders in this case, by certified mail to the most recentaddress respondent has given to the Attomey Registration Section.

OMAS J. MChief Justice

BEFORE THE BOARD OF COMMISSIONERSON

GRIEVANCES AND DISCIPLINEOF

THE SUPREME COURT OF OHIO

In Re:

Complaint against

Loren Jonathan MargolisAttorney Reg. No. 0007957

Resnondent,

Disciplinary Counsel

Relator.

Case No. 05-066

Findings of Fact,Conclusions of Law andRecommendation of theBoard of Commissioners onGrievances and Discipline ofthe Supreme Court of Ohio

Introduction

This matter was heard on August 10, 2006 at the Ohio Judicial Center in

Columbus, Ohio pursuant to Gov. Bar R. V(6)(G). The hearing panel consisted of Teresa

Proenza of Akron, the Honorable Thomas Bryant of Findlay and Paula Hicks-Hudson,

Esq., Chair, of Toledo. None of the panel members was from the District from which the

Complaint originated or served as members of the Probable Cause Panel that certified

this matter to the Board.

The Relator was represented by Carol Costa, Esq., on behalf of the Disciplinary

Counsel. The Respondent was present and represented by Richard Koblentz, Esq.

Procedural Background

The initial Complaint in this matter was filed on July 26, 2005 with Respondent

filing his answer on August 19, 2005: At the September 27, 2005 telephone pretrial the

parties-initially proposed disposing of this matter with a discipline by consent filing.

After a discussion with the panel members, the proposed discipline by consent was

rejected. The matter was continued until a date in the Spring of 2006 to ascertain

whether the Respondent would still be incarcerated or released from the federal penal

system.

The parties presented joint stipulations at the hearing on the August 10, 2006.

The Relator presented its case through the stipulations and rested without calling any

witnesses. Counsel for Respondent called two witnesses, Attorney William Doyle and

the Respondent. By clear and convincing evidence, the panel adopts the stipulations

containing the agreed facts of this case, and the violations of the disciplinary rules. The

stipulations are attached to this panel report and incorporated by reference as Exhibit A.

Findings of Fact

1. The Respondent was licensed to practice law on November 1, 1983. He was

suspended beginning August 2, 2005 from the practice of law based upon his

conviction of a felony.

2. The Respondent worked in a small boutique law firm from 1983 until the late 1989.

He testified that he practiced primarily in the area of real estate.

2

3. Beginning in 1989, the Respondent began working for his father-in-law's scrap metal

business, Weingold Company. He was not familiar with the business and learned

how to sell and buy scrap metal from his father-in-law.

4. In March, 2000 the federal government conducted a raid on the business and charged

the Respondent, along with others, on anti-trust violations.

5. At the hearing, the Respondent testified that his father-in-law did not tell him about

any investigations or possible illegal activities by the company even though a supeona

had been served upon his father-in-law in 1997.

6. The Respondent conducted the day-to-day operations during the absences of his

father-in-law.

7. The Federal Government filed charges against the Respondent, his father-in-law and

two other companies with anti-trust violations alleging that the three companies

engaged in conspiracy to maintain control of the scrap metal market and engaged in

the practice of complimentary bidding.

8. A complimentary bid, according to Attorney Doyle's testiinony, is a joint enterprise

where the companies would buy and sell as customers and competitors that one of the

three companies would get the bid to the exclusion of the other companies in the area

who were in the scrap metal business.

9. The Respondent testified before the panel that his father-in-law did not tell him that

the federal investigation began in 1997.

10. The Respondent cooperated with the federal government, assisting them in the

prosecution of its case.

11. The Respondent stated that although he accepted a plea bargain, he did not believe

that he had committed any crime prior to the governrnent's investigation.

Conclusions of Law

12. The Relator and Respondent stipulated that Respondent's conduct violated each of

the following provisions:

DR 1- 10 1 -2(A)(4) conduct involving dishonesty, fraud, deceit ormisrepresentation.

DR 1-102(A)(6) conduct adversely reflecting on the lawyer's fitness topractice law.

The Panel finds by clear and convincing evidence that the Respondent violated

the above listed disciplinary rules.

Aggravation and Mitigation

MITIGATION:

The Relator and Respondent stipulated to the following mitigating factors listed in

BCGD Proc. Reg. Sec.10(B)(2):

13. The Respondent has no prior disciplinary record.

14. He cooperated during the disciplinary proceedings.

4

15. He received other penalties and sanctions having been sentenced to 10 months

including five months of home confinement with electronic monitoring and payment

of $ 700,000 in fines plus court costs.

16. Respondent was suspended from the practice of law on an interim basis on August 2,

2005.

17. The Respondent is married and the father of 3 children.

18. The Respondent submitted several letters from customers in support.

AGGRAVATION

19. Although the parties did not discuss any aggravating factors, the Panel found that the

Respondent did not accept responsibility for his actions in the anti-trust activities.

20. The panel was not persuaded by the Respondent's statement that he was trying to

explain his actions and not make any excuses.

21. The panel did not believe the Respondent or his lawyer's stateinents of innocence, in

light of his responses to questions about his entering the scrap metal business and his

lack of awareness of the unfairness of the bidding process. The respondent's

demeanor and attitude while on the witness stand showed a condescending attitude

when he attempted to have the panel believe that he was naVve and duped into his

actions by his father-in-law and his desire to keep his wife and her family happy. On

5

the contrary, Respondent had been a practicing attorney for several years and held a

real estate license since college.

22. Further, the Respondent was not forthcoming in his response to questions regarding

his income. The Respondent initially stated that his salary was only $25,000 per year,

whereas upon examination by the panel he admitted he got bonuses for around

$200,000 per year.

23. In fact, the Panel did not believe the Respondent's statements that he did not know

that his actions were illegal.

Recommended Sanction

21. The parties recommended the proposed sanction of two years suspension,

retroactively applied to August 2, 2005, the effective date of the felony suspension.

A review of a recent case decided by the Ohio Supreme Court on August 2, 2006

supports the Panel's recommended sanction. Cincinnati Bar Association v. Hennekes,

110 Ohio St. 3d 108, 2006-Ohio-3669, imposed a two-year sanction without any

retroactive application. In I-iennekes, at ¶ 13 the Cour[ restated its position from

Cleveland Bar Assn. v. Stein (1972), 29 Ohio St. 2d 77, 81. "One of the fundamental

tenets of the professional responsibility of a lawyer is that he should maintain a degree of

personal and professional integrity that meets the highest standard. The integrity of the

profession can be maintained only if the conduct of the individual attorney is above

reproach. He should refrain from any illegal conduct. Anything short of this lessens

6

public confidence in the legal profession-because obedience to the law exemplifies

respect for the law."

The Panel found that the Respondent should have known that the process by which

his company and other companies obtained bids was illegal regardless of the nuances of

anti-trust law. The Panel was not persuaded by the letters submitted on behalf of the

Respondent. Nor did the Panel find that the Respondent acknowledged his role in the

illegal business practices of the company,

The Panel recommends that the Respondent be suspended from the practice of law for

two years with no credit for time served.

BOARD RECOMMENDATION

Pursuant to Gov. Bar Rule V(6)(L), the Board of Commissioners on Grievances

and Discipline of the Supreme Court of Ohio considered this matter on November 30,

2006. The Board adopted the Findings of Fact, Conclusions of Law and

Recommendation of the Panel and recommends that the Respondent, Loren Jonathan

Margolis, be suspended from the practice in the State of Ohio for two years with no credit

for time served. The Board further recommends that the cost of these proceedings be

taxed to the Respondent in any disciplinary order entered, so that execution may issue.

Pursuant to the order of the Board of Commissioners onGrievances and Discipline of The Supreme Court of Ohio,I hereby certify the foregoing Findings of Fact, Conclusionsof Law, and Recommendations as those of the Board.

/ 3 VVI ^^ATHA W. ARSH LL, Secretary

Board of Commissioners onGrievances and Discipline ofThe Supreme Court of Ohio

7

BEFORE THE BOARD OF COMMISSIONERSON GRIEVANCES AND DISCIPLINEOF THE SUPREME COURT OF OHIO

Loren Jonathan Margolis, Esq.3920 E. 91st StreetCleveland, OH 44105

BOARD NO. 05-066

Attorney Registration No. (0007957)

Respondent AGREEDSTIPULATIONS

v.

DISCIPLINARY COUNSEL250 Civic Center Drive, Suite 325Columbus, Ohio 43215-7411

Relator

AGREED STIPULATIONS

Relator, Disciplinary Counsel, and respondent, Loren Jonathan Margolis, do hereby

stipulate to the admission of the following facts, violations of the Code of Professional

Responsibility, mitigating factors, and to the admissibility and authenticity of the attached

exhibits.

STIPULATED FACTS

1. Respondent, Loren Jonathan Margolis, was admitted to the practice of law in the

State of Ohio on November 1, 1983. Respondent is subject to the Code of

Professional Responsibility and the Supreme Court Rules for the Government of the

Bar of Ohio.

JUL-25-2006 10:16 SUPREME COURT 614 461 7205 P.04

2. On January 15, 2004 respondent was indicted in the United State District Court,

Northern Division. U.S. v. Margolis, Case No. 1:04 CR 00030. Respondent was

charged with two counts of violating the Sherman Antitrust Act, 15 U.S.C. § 1.

3. At all relevant times, respondent was an employee of M. Weingold & Co.

(Weingold). Weingold was a scrap metal processing company and also engaged

in the business of buying and selling scrap metal. The business was owned by

respondent's father-in-law, who was also indicted in the same matter as

respondent.

4. Respondent was a salesman for Weingoid, and his job duties included purchasing

scrap metal.

5. The criminal charges alleged that respondent engaged in a conspiracy to suppress

and restrain competition by rigging bids for the purchase of scrap metal in

Northeastern Ohio.

6. On March 1, 2005 respondent entered into a plea agreement in which he pled

guilty to the two federal felony offenses charged in the indictment.

7. On April 11, 20D5, respondent self-reported his misconduct to relator through a

letter forwarded from his counsel.

8. On May 11, 2005, respondent was sentenced. The court imposed a sentence of

ten months in the custody of the United States Bureau of Prisons, with five months

to be served in prison, and the remaining five months to be served in home

confinement with electronic monitoring. Respondent was ordered to pay a

$700,000 fine and a $200 special assessment. The court also imposed a sentence

of a one-year supervised release.

JUL-25-2006 18:16 SUPREME COURT 614 461 7205 P.05

9. On August 2, 2005, respondent's license to practice law was suspended by the

Supreme Court of Ohio pursuant to Gov. Bar R.V(5)(A)(4) due to respondent's

conviction of the federal felony offenses. In re Margolis, Supreme Court Case No.

05-1064.

10. Respondent completed his period of incarceration on December 23, 2005.

11. Respondent has paid all fines and assessments ordered by the court.

12. On June 5, 2006, the court granted respondent's motion to terminate the supervised

release.

13. Respondent's misconduct did not involve the practice of law, nor were any legal

clients affected.

14. Respondent is a licensed real estate agent in the state of Ohio.

15. On June 9, 2006 the Ohio Real Estate Commission issued an order that respondent

be publicly reprimanded due to his federal felony convictions.

16. Respondent admits that his conduct violates the Code of Professional

Responsibility, specifically, DR 1-102 (A)(4), (conduct involving dishonesty, deceit,

fraud, or misrepresentation); and DR 1-102(A)(6), (conduct adversely reflecting on

the lawyer's fitness to practice law).

MITIGATION

Relator and respondent stipulate to the following mitigating factors as listed

in BCGD Proc. Reg. Sec. 10(B)(2):

a. absence of a prior disciplinary record;

d. cooperative attitude toward the proceedings

f. imposition of other penalties or sanctions

JUL-25-2006 10:17 SUPREME COUR'f

STIPULATED EXHIBITS

Joint Exhibits

1. U.S. v. Margolis, indictment

2. U.S. v. Margolis, plea agreement

3. Correspondence from respondent's counsel of April 11, 2005

4. Transcript of May 11, 2005 sentencing hearing

5. In re Margolbs, Ohio Supreme Court Case No. 05-1064

6. Order terminating supervised release

7. Receipts for payment of fines

8. June 9, 2006 order of the Ohio Real Estate Commission

9. Agreed Stipulations

614 461 7205 P.06

RESPONDENT'S EXHIBIT

A. Ninety-two character letters

RECOMMENDED SANCTION

Relator and respondent stipulate that the appropriate sanction based upon the

stipulations and exhibits is a two-year actual suspension from the practice of law in the

state of Ohio.

Respondent requests that the date of the suspension be August 2, 2005, the date

his interim felony suspension began. Relator defers to the panel for a recommendation on

this issue.

JUL-25-2006 10; 17 SUPREME COURT 614 461 7205 P.07

CONCLUSION

The above are stipulated to and entered into by agreement by the undersigned

rdparties on this ^J - day of 4aiy, 2006.

q. C°^ °v, ^-^ `z )Joh athan E. Coughlan (bb26424)Disciplinary Counsel

Carol A. Costa (0046556)Assistant Disciplinary Counsel

ichard S. Koblentz (0002677)Counsel for Respondent

Lorbn Jonathan Margolis (0007957)Respondent