ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, March 14, 1996 TAG: 9603140068
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
A Roanoke lawyer has pleaded guilty to criminal contempt of court and been fined $10,000 because one of his clients furnished inaccurate financial information to U.S. Bankruptcy Court.
A. Carter Magee signed the plea agreement with the U.S. attorney's office Feb. 29, the same day charges were filed against him. The sentencing order was signed this week.
Magee, who devotes the major part of his practice to bankruptcy cases, is managing partner of Magee, Foster, Goldstein & Sayers in Roanoke.
The contempt of court charge, a misdemeanor, stems from a bankruptcy filing Magee's firm did for Warren and Barbara McCormack of Vinton in 1994. Papers filed indicated the McCormacks had rings valued at $15,000. In fact, the rings had been bought for $66,618.75, with a 90-day guarantee that allowed the owners to return them for a refund. The guarantee was in effect at the time of the filing.
Magee "reasonably should have known" about the refund guarantee even if the client didn't tell him, the court said.
Magee said Wednesday that he would have disclosed the information to the court if he had known of it. He also said that he has put procedures in place to prevent a recurrence. He won't meet with clients anymore unless another person is present, he said, and he is putting all instructions to clients in writing. Also, he said, papers filed with the court containing the value of items will carry an "asterisk that the values were given by the client."
The charge against Magee grew out of an investigation of the McCormacks that began after an anonymous complaint to Tom Kennedy, assistant U.S. trustee in the bankruptcy court. Kennedy referred the complaint to U.S. Attorney Robert P. Crouch Jr.
Crouch wouldn't comment on whether or not the McCormack investigation had been closed.
U.S. attorneys' offices throughout the country are scrutinizing bankruptcy cases more thoroughly at the directive of U.S. Attorney General Janet Reno, Crouch said.
"What you see in this case is the beginning of that attention to cases of this sort," Crouch said.
Magee's attorney, John Lichtenstein of Roanoke, said Wednesday that one of the "positive" things for his client was that the government decided "it was a petty mistake."
Assistant U.S. Attorney Karen Peters, who prosecuted the case, told the Richmond Times-Dispatch that the $10,000 fine was "a big fine for a small offense."
The contempt charge will go through a routine review by the Virginia State Bar to determine whether disciplinary action should be taken, a bar staff member said Wednesday.
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