The Ohio Supreme Court has indefinitely suspended a Cleveland-area lawyer for his role in helping a firm bilk more than 70 investors out of $31 million over four years.

In a unanimous per curiam opinion, the Supreme Court suspended Mark M. George of Independence. George has been under an interim suspension since November 2016 after pleading guilty in federal court to conspiracy to commit wire fraud and securities fraud. He was sentenced to 21 months in prison , followed by three years of supervised release.

To be reinstated to the practice of law, one of the terms the Court imposed is that George pay  restitution to the Lawyers’ Fund for Client Protection, which paid $51,000 to two of the investment scheme victims. He also must make progress in paying more than $125,000 in restitution imposed on him by the federal Securities Exchange Commission and $17 million in restitution that he and his co-conspirators were directed by the federal court to pay to the investors.

Lawyer Aided Phony Fuel-Selling Scheme
A company known as KGTA Petroleum Ltd. solicited investors by representing it could purchase crude-oil and refined fuel products at a deeply discounted price and resell commodities to buyers in the petroleum industry for a substantial profit.  The investors were promised guaranteed returns of five percent a month.

George, who previously represented one of KGTA’s founders, used his client trust account to deposit the investors’ funds. KGTA promoted George’s status as an attorney and described him as its “escrow agent” to assure the investors that their money was safe. The investors were told George would disburse money held in escrow only after purchases were executed, and all proceeds from sales of fuel and oil were delivered to the escrow agent.

KGTA never provided George with legitimate purchase orders or deposited any profits from the sale of oil or gas into his client trust account. Federal investigators uncovered the scheme and charged several people in the crime. In June 2015, a federal grand jury indicted George on eight counts of criminal conduct for his participation in the scheme.

Lawyer Unaware of Client’s Activity
Based on his conviction , the Office of the Disciplinary Counsel charged George with violating several of the rules governing the conduct of Ohio attorneys. A Board of Professional Conduct hearing panel determined that George was not a principal of KGTA and did not perform any legal services for the company or its investors. George initially received a fee of $2,500 per month for his role as the escrow agent.

At his disciplinary hearing, George stated at some point he realized KGTA was not a legitimate business. The hearing panel reported “he could not, or would not, disclose when that epiphany had occurred.” After reportedly leaving the company after observing improper conduct, he returned to serve on a month-to-month basis and increased his fee from $2,500 to $4,000 per month.

At his hearing, George testified that he served about 16 months of his prison sentence, spent a year in a halfway house, and was released to home detention in May 2019. He has remained on supervised release. At the time of his disciplinary hearing he had paid $6,700 toward his restitution obligations.

Attorney Concedes Rule Violations
The parties stipulated and the board agreed that George committed an illegal act that adversely reflects on his honesty and trustworthiness; engaged in conduct that adversely reflects on his fitness to practice law; and engaged in conduct involving dishonest, fraud, deceit, or misrepresentation.

The board recommended, and the Court agreed, to indefinitely suspend George with no credit for the time served under his interim suspension. To be reinstated he must comply with all his terms of supervised release; complete a minimum of three house of continued legal education regarding the use of a client trust account; make full restitution of $51,000 to the Lawyers’ Fund for Client Protection; and take reasonable steps to comply with the other two restitution orders for more than $17 million.

2019-1747. Disciplinary Counsel v. George, Slip Opinion No. 2020-Ohio-2902.

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