Monday, February 9, 2009

Case of the Week 2/9/09

When it comes to bar applications, a student’s improper business dealings or conduct during employment may raise eyebrows.

In one case, a student was involved in a fraudulent investment scheme that resulted in civil litigation by defrauded investors against the student and his partner, as well as criminal charges against the partner, but not against the student. In re Matthews, 94 N.J. 59 (1983). After the student disclosed the pending civil case on his bar application, the court concluded that despite the lack of criminal charges and purported non-involvement, the student did not have the requisite moral character to be admitted to the bar. The court held, “It cannot be disputed that Matthews should have known of the fraudulent nature of the scheme. Even Matthews, in retrospect, recognizes that too many elements of the scheme simply reeked with illegitimacy. Any reasonable person’s suspicion would have been raised by a series of purported investment opportunities, each of which returned an exceptionally high rate of profit, yet involved no risk.” Id., at 79. The court also found Matthews’ failure to file his tax returns on time troublesome.

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