Anastasia Coravos (2016)

findingsby clearand convincing evidence: The Committee determined thatthe Record supportsthe following factual

was an appropriatesanction. Committee agreed thatthe Stipulation'srecommendation ofa publiccensure allcostsofinvestigationand prosecutionof thismatter. Finally,the stipulated,and voted to approve the agreement to reimburse the Committee for findingsofviolationsofthe Rules of ProfessionalConduct (the"Rules") as stipulatedby clearand convincing evidence. The Committee then approved the Having reviewed the Record, the Committee approved the factsas

W. McGrath was recused. Elaine Holden, Susan R. Chollet,and Margaret R. Kerouac were absent. David Mona T. Movafaghi, Georges J.Roy, Richard D. Sager and Martha Van Oot. Chair,Heather E. Krans, Vice Chair,PeterG. Beeson, Richard H. Darling, (collectively,the "Record"). Members presentincluded David M. Rothstein, "Stipulation"),and theAgreement to Pay Costs of DisciplinaryMatter "Committee") deliberatedthe Stipulationas to Facts and Rule Violation(the On September 20, 2016, the ProfessionalConduct Committee (the

Coravos, Anastasia advs. Attorney DisciplineOffice- 09-015

Margaret R. Kerouac BarbaraJ. Guay, LegalAssistant Richard H. Darling* * non attorneymember Susan R. Chollet* Martha Van Oot PeterG. Beeson Richard D. Sager ElaineHolden,* Vice Chair 603-224-5828* Fax 228-9511 Georges J. Roy* Heather E. Krans, Vice Chair Concord, New Hampshire 03301 Mona T. Movafaghi David M. Rothstein,Chair 4 Chenell Drive, Suite 102 David W. McGrath

premiums. Noble arranged forfinancingto assistapplicantsin paying the insurancecompany ofatleastseveralhundred thousand dollars.Often, policy. The applicantwas alsorequiredto pay annual premiums to the yearsold and have a networth thatwas atleastequal to thevalue ofthe of$2 millionor more. To qualify,an applicanthad to be atleast70 7. Through Balcarres,Mr. Lindsey lifeinsurancepolicieswith a face value

addressfor Balcarreswas the same as the Noble address. Lindsey was alsothe Balcarresregisteredagent and the New Hampshire Balcarresto do businessin New Hampshire in September of 2006. Mr. limitedliabilityinsuranceagency incorporatedin Nevada. He registered 6. Mr. Lindsey was alsothe owner ofBalcarresGroup, LLC, ("Balcarres"),a

was not an officer. member ofthe board ofdirectors,never attendeda board meeting, and operatingofficer,and a board ofdirectors.Ms. Coravos was not a the board ofdirectorsofNoble. Noble alsohad a vice-president,chief 5. Colin P. Lindsey was the founder,owner, and president,and chairman of

decisionson behalfofitscustomers. Manchester. Itprovided investmentadvice and executed investment maintained itsoperationalheadquartersat900 Elm Street,Suite701, laws ofthe StateofNew Hampshire in September 2003. Noble 4. Noble was a non-depositoryfinancialinstitutioncharteredunder the

The Noble Trust Company and the Marino Policies

2008. This was Ms. Coravos'sfirstjob as an attorney. lessthan one year,from approximately March 11, 2007, to February Noble TrustCompany ("Noble"). Ms.Coravos was employed by Noble for 3. On March 11, 2007, Ms. Coravos became the soleattorneyemployee of

2. Ms. Coravos does not have a previousdisciplinaryhistory.

admitted to the New Hampshire Bar in November 2007. in the Commonwealth of Massachusetts on November 28, 2005. She was in Miami, Floridain May 2005. She was admitted to the practiceoflaw 1. AnastasiaCoravos graduated from St.Thomas UniversitySchool ofLaw

Matter ofthe LiquidationofNoble TrustCompany, Docket No. 08-E-0053.) liquidationproceeding in the Merrimack County SuperiorCourt. [In the On February 11, 2008, the Banking Commissioner commenced a examination ofNoble and discoveredirregularitiesin Noble's operations. 16. In early2008, the New Hampshire Banking Department conducted an

The New Hampshire Banking Department's Investigation

approximately $2.4 million. totalingmore $6.5 million,and Mr. Marino receivedreferralfees totaling high value policieswere issued. Mr. Lindsey receivedcommissions 15. As a result,between July2006 and November 2007, fourteenfraudulent

applicantsheld in the 450 4thTrust. worth assessmentswere largelybased on allegedintereststhatthe participatein the insuranceapplicationprocess. The fraudulentnet 14. The applicantswere induced through upfrontcash payments to

insurancecompanies. knowing thatNoble would forward the informationto prospective knowing thatthe accompanying financialinformationwas false,and Mr. Lindsey forty-oneapplicantsfor high value insurancepolicies 13. From Julyof 2006 through October of2007, Mr. Marino submitted to

from financialadvisors,attorneys,and accountants. applicant'sfinancialsituationwas confirmed through lettersor affidavits verifythatthe applicanthad the requisitenetworth. Verificationofthe referralfee,Mr. Marino had to provide informationto Mr. Lindsey to person who was referredto Mr. Lindsey by Mr. Marino. To earn a Mr. Marino foreach high value premium insurancepolicysold to a 12. Beginning in approximatelyJuly2006, Mr. Lindsey agreed to pay a feeto

trust,the 450 4th Avenue North Revocable Trust("450 4th Trust"). 11. Mr. Marino was alsothe trusteefor a Floridarealestateinvestment

referralsourcesfor Balcarres/Nobleclients. 10. JerryMarino, a Floridarealestatebroker,was one ofMr. Lindsey's

before Ms. Coravos was hiredby Noble in March 2007. 9. Mr. Lindsey was involved in procuringhigh value insurancepolicies

approximately 80% to 112% ofthe firstyear premium. company paid an up-frontcommission to Balcarresthatwas 8. When a Balcarrescustomer purchased a high value policy,the insurance p. 4 Page 4 of11 company, and an insurancebrokerage firm,collectivelyagreed to a one accountant,nine former officersand/ordirectorsofNoble, an insurance effectiveon March 28, 2013. In the civilmatter,Ms. Coravos, an mattersettlementagreement was approved by the courtand became and the civilmatterwere submitted to the courtforapproval. The civil 22. In January 2013, settlementagreements forboth the liquidationaction

millionsofdollarsofinvestors'money to a Ponzi scheme in Colorado. the Marino scheme and to hisfailureto discloseto thathe had lost months in prisonand ordered to pay restitution.The charges relatedto the United StatesDistrictCourt in Concord, and was sentenced to 51 21. In October 2009, Mr. Lindsey pled guiltyto two counts of mail fraud in

2010 for her failureto pay bar dues. ADO verifyingthe same. She was administrativelysuspended inJune of intentionto do so. Ms. Coravos has submitted updated affidavitsto the not practicedlaw sinceher dischargefrom Noble Trustand had no 20. Ms. Coravos submitted an AffidavitinJuly2009 attestingthatshe had

investigation." person whose conduct is"withinthe scope ofthe grand jury's whom the grand juryhas substantialevidence while a "subject"isa JusticeCriminal Manual, Sec. 9-11.151,a "target"isa person against a targetofthe investigation.As per the United StatesDepartment of likeallotherformer Noble employees, was considereda "subject"but not not proceed untiltherewas a resolutionofthesematters. Ms. Coravos, federalcriminalinvestigationand requestedthatDisciplinaryCounsel counsel,Kevin Sharkey, assertedthatMs. Coravos was the subjectofa 19. Due to the pending criminaland civilmatters,Ms. Coravos, through her

complaint,alleging, interalia, breach offiduciaryduty by Ms. Coravos. Mr. Harwood's referralconsistedofa fullcopy of the pending civil 2009, because Ms. Coravos was a named defendant in the civilmatter. referredthe matterto theAttorney DisciplineOffice ("ADO") on April 27, 18. The Banking Commissioner's outsidecounsel,Bruce A. Harwood,

Procedural Background and ResolutionofCiviland Criminal Matters

Colin Lindsey et.al, Docket No. 09-E-184) ("civilmatter"). County SuperiorCourt. (PeterHildreth,Bank Commissioner et.al.v. 17. On April 24, 2009, a petitionin equitywas filedwith the Merrimack

assetsfor the benefitofitscreditors. Aftera liquidationorderissued,the Liquidatorbegan marshaling Noble's p. 5 Page 5of11 the applicationcover lettersand humanize the applicantsby tellingtheir high value insurancepolicies.In some cases,Ms. Coravos would prepare 29. Ms. Coravos primarilyworked to obtainfinancingfor premiums forthe

were similarto those performed by non-attorneysatNoble. 28. Despite the variousjob titlesused, many ofMs. Coravos's responsibilities

ofher duties. counsel. However, Ms. Coravos was never given a writtenjob description Coravos'sjob titleas legalcounsel,generalcounsel,and corporate 27. During the course ofher employment, Mr. Lindsey identifiedMs.

Commissioner assumed controlofNoble. one paycheck based on thatsalarybefore the New Hampshire Banking Coravos's salarywas raisedto $100,000 a year. Ms. Coravos received then she had alsopassed the New Hampshire bar. In January 2008, Ms. sought a raisebecause she was working 50-60 hours per week and by $60,000 afterher first90 days of employment. In late2007, Ms. Coravos Mr. Lindsey toldMs. Coravos thather salarywould be increasedto 2008. Her startingsalarywas $50,000 per year. Within a few weeks, 26. Ms. Coravos was employed by Noble from March 11, 2007 to February

Ms. Coravos's Employment with Noble TrustCompany

August and September 2009, afterhe had pled guiltyto mail fraud. testimony thatMr. Lindsey provided to the liquidatorand itscounsel in Coravos, and portionsofthe transcriptsofseveraldays ofdeposition has reviewed Noble Trustdocuments, includingemails writtenby Ms. Kinsellaregardingthe issuesraisedin Mr. Harwood's referral.The ADO interviewedMr. Lindsey, and has spoken with U.S. Attorney Robert with Ms. Abigail Shaine,SpecialCounsel to the Liquidator,has Marino pled guiltyto wire and fraud charges. ADO counsel has alsomet 25. Ms. Coravos agreed to meet with theADO in the fallof 2014, afterMr.

24. No otherNoble employees were charged criminally.

sentenced inJune 2015 to 46 months in federalprison. 23. Mr. Marino pled guiltyto mail and wire fraud charges in 2014, and was

contributionsfrom a number ofthe individualdefendants. policyforan individualaccountantdefendant,and personal and omissions policyfor the officersand directors,a similarinsurance having engaged inwrongdoing. The settlementwas funded by an errors none ofthe settlingdefendants,includingMs. Coravos, admitted to milliondollarsettlement.As a conditionof the settlementagreement, p. 6 Page 6of11 spouses or siblings.As such, he explainedtherewas no problem with triggeredwhen the owner died. Often the transferof shareswas between to createthe necessaryliquidityto pay the estatetaxesthatwould be members so as to find a family member thatwas insurablemedically and Mr. Marino's trustofteninvolved transferringinterestsbetween family transferredbetween family members. Mr. Lindsey furtherexplainedthat revocable trustswere involved,and thatsuch trustshareswere often she had createdwas not a reason for concern. He explainedthat 36. Mr. Lindsey explainedto Ms. Coravos why the ownership spreadsheet

outsidewith him while he took a cigarettebreak. 35. ShortlyafterMs. Coravos sentthe email,Mr. Lindsey asked her to go

450 4th Trust. the spreadsheetwith the listofnames and theirpercentownership in the stating,"Ithoughtyou might liketo see this."Attached to the email was 34. On September 19, 2007, Ms. Coravos sentan email to Mr. Lindsey

162.6896%. each individual'sinterestin the trust.The percentagesadded up to purportedlyhad an interestin the 450 4thTrustand the percentageof Coravos then prepared a spreadsheetnotingthe names of those who otherfiles,financialinformationrelatingto the 450 4th Trust. Ms. presentedto her in the Marino-referredcases. Ms. Coravos pulled,from financialinformationregardingthe 450 4thTrustthathad been 33. On or about September 19, 2007, Ms. Coravos became suspiciousof the

Mr. Marino's 450 4th Avenue Trust. forwarded documents indicatingthatthey had a percentageinterestin four ofthe applicantswere referredby Mr. Marino. All four applicants insuranceapplicationsinvolvingapproximately 200 Noble cases. At least 32. By September 2007, Ms. Coravos had worked on severaltypes of

Ownership Spreadsheet for the 450 4th Trust

obtainfinancingfor the policypremiums. representatives,with whom she began to have dailycontactin orderto 31. Ms. Coravos alsobecame the pointperson with CreditSuisse

forhim, particularlywhen he was travelingout of stateor overseas. Eventually,Mr. Lindsey consideredMs. Coravos to be a trouble-shooter insurancematters,Mr. Lindsey provided her with trainingas needed. 30. Because Ms. Coravos did not have priorexperience in handling

lifestoriesto insurancecompanies. Mr. Lindsey signed the applications. p. 7 Page 7 of11 [The applicant]has an illiquidestateheavilytiltedtowards

44. In relevantpart,Ms. Coravos wrote:

ownership interestin the 450 4th Trust. Marino applicant'sallegednetworth of$34,742,535, largelybased on his 43. Ms. Coravos sentlettersto fiveunderwritingorganizationsdetailingone

Marino policies,which were eventuallyissued. 42. Accordingly, Ms. Coravos arranged for premium financingfor two more

potentialinsureds,theirCPAs, and lawyers. financialverificationthatshe receivedfrom her discussionswith the 41. Ms. Coravos was satisfiedwith Mr. Lindsey'sexplanation,and with the

applicationsalreadyin the"pipeline"to closewhile pullingothersout. as not to raisealarm, Mr. Lindsey allowed atleasttwo Marino he could repay the insurancecompanies for the fraudulentpolicies.So Lindsey hoped to createenough income over the ensuing months so that applicationsinvolvingthe 450 4thTrustwere fraudulent.However, Mr. spreadsheetprepared by Ms. Coravos, he realizedthe Marino 40. Mr. Lindsey lateradmitted thatupon being presentedwith the

means. requestthatyou switch your marketing effortsto traditional so,we can no longeracceptany 450 trustapplications.I cases totally[sic]160% ofthe 450 trustvalue.Since thisis Please see the attachedspreadsheet.You have submitted

Marino, stating: 39. The next day, September 20, 2007, Mr. Lindsey sentan email to Mr.

Lindsey. financialprofessionals.She did not have a reason to distrustMr. been independentlyverifiedby accountants,lawyers,and/orother specifictrainingnor experiencewith trusts,allofthe financialdatahad 38. At the time,Ms. Coravos recognized thateven though she had neither

he would follow up on thismatterwith Mr. Marino. reviewed a copy of the 450 4th Trustand allwas in order. He statedthat toldher not to worry sincehe and the Noble trustcommittee had day for a copy ofthe 450 4th Trustbut could not locateit. Mr. Lindsey 37. Ms. Coravos toldMr. Lindsey thatshe had looked invariousfilesthat

the percentagesadding up to more than 100%. p. 8 Page 8 of11

49. Ms. Coravos breached her dutiesofcompetence.

competence; and to bringthose areasto the client'sattention. practicewith techniqueand skill;to identifythose areasbeyond her knowledge about the areaoflaw in which she practiced;to perform her 48. Ms. Coravos had a duty as legalcounsel to Noble to develop specific

Hampshire Rules of ProfessionalConduct 1.1 and 8.4(a). The partiesstipulatedthatMs. Coravos knowingly violatedNew

thatMr. Lindsey oftenconsultedwith outsidecounsel. consultationwith outsidecounsel should occur. Yet, Ms. Coravos knew Marino-based policies,nor did she recommend to Mr. Lindsey thata 47. Ms. Coravos did not attemptto consultwith outsidecounsel about the

Marino-based policies,which had alreadyissued,were fraudulent. should occur. She alsodid not investigateto determine ifthe other did she ask him whether furtherinvestigationintothe Marino policies 46. After Ms. Coravos's September 19thconversationwith Mr. Lindsey, she

attachedCPA compilationand financialsfor theTrust.) shareas beneficiaryisvalued at$32,359,000 (pleasesee [theapplicant]owns a 6.144% interestin the trustand his investedin isthe 450 Fourth Avenue N. Revocable Trust[,] One of theserealestateendeavors that[theapplicant] 15 projectsfrom 1969 to the present(seeattachedresume.) activein the FloridaReal EstateMarket participatingin over In additionto thesebusinesses,[theapplicant]has been very

wrote in relevantpart: 45. After detailingthe applicant'swork historyand investments,Ms. Coravos

estateplan. holdings,liquidityissuesare a seriousconcern with his magnitude of [theapplicant's]debt and hisrealestate compiled personalfinancialstatement(attached).Given the has a networth of $34,742,535 as demonstrated in hisCPA $1,657,500 and estimatedtaxesof$485,500. Therefore,he 2007 of$36,885,535 but he alsoiscarryingliabilitiesof [The applicant]has an actualgrossworth as ofJune 30, realestate,with approximately $34,304,000 in property. p. 9 Page 9of11

3.0. factors." Id. (quoting Douglas' Case, 156 N.H. 613, 621 (2007)); Standards^ by the lawyer'smisconduct; and (d)the existenceofaggravatingor mitigating violated;(b)the lawyer'smental state;(c)the potentialor actualinjurycaused partanalysisforcourtsto considerin imposing sanctions:"(a)the duty guidance. Conner's Case, 158 N.H. at303. The Standards setfortha four- Although the Court has not adopted the Standards, itlooks to them for

the misconduct." Coffey's Case, 152 N.H. 503, 513 (2005). N.H. 299, 303 (2009). "The sanction. . .must take intoaccount the severityof profession,and preventingsimilarconduct in the future." Conner's Case, 158 maintainingpublicconfidence in the bar,preservingthe integrityofthe legal The purpose ofthe Court'sdisciplinarypower is"protectingthe public,

month suspension. Imposing Lawyer Sanctions (2005) ("Standards") supportthe sanctionofa six- Both case law and theAmerican Bar Association's Standards for

thatMs. Coravos violatedRules ofProfessionalConduct 1.1 and 8.4(a). The Committee concludes thatthereisclearand convincing evidence

violatethe Rules of ProfessionalConduct. Rule 8.4(a)providesthatitisprofessionalmisconduct fora lawyer to

Rule ofProfessionalConduct 1.1. 52. The partiesagree thatMs. Coravos's failuresconstitutea violationof

applicants. furtheradvice. Instead,Ms. Coravos continued to process Marino plausible.She alsofailedto recommend to Mr. Lindsey thathe seek have helped her understand whether Mr. Lindsey'sexplanationwas 51. Ms. Coravos failedto reach out to more experienced counsel,who might

furtherstepsto verifyit. However, having heard Mr. Lindsey'sexplanation,Ms. Coravos took no PresidentofNoble and the Chairman ofthe Board. See Rule 1.13. the attentionof Mr. Lindsey, her directsupervisor,who was alsothe equatingto over 162% ofthe 450 4th Trust.She also brought the issueto the totalvalue thathad been submitted to the insurancecompanies as Mr. Marino's referralsthatshe developed a spreadsheetwhich setforth 50. Ms. Coravos, an inexperiencedlawyer, became concerned enough with p. 10 Page 10 of11 toward proceedings,and inexperiencein the practiceoflaw. See Standards § disciplinaryrecord,fulland freedisclosureto theADO, a cooperativeattitude The Committee findsas mitigatingfactorsthe absence ofa prior

Standards § 9.22. aggravatingand mitigatingfactors.There are no aggravatingfactors. See Having determined the baselinesanction,the Committee must consider

clientor party...."The baselinesanctionisa publiccensure. isviolatinga courtorderor rule,and causes injuryor potentialinjuryto a that"[sjuspensionisgenerallyappropriatewhen a lawyer knows thathe or she based on the assertionthatno validobligationexists. Standards § 6.22 states to obey any obligationunder the rulesof atribunalexcept foran open refusal In determining a baselinesanction, Standards § 6.2 addressesthe failure

fraudulentinsurancepolicies. her lackofcompetence resultedin the submission and financingof Ms. Coravos'sconduct contributedto the injuryto Noble Trust. In part,

actualor potentialinjurycaused by Ms. Coravos's misconduct. The thirdprong of the sanctionanalysisrequiresan assessment ofthe

Prong III:Injuryor PotentialInjury

The partiesagree thatMs. Coravos was negligent.

Prong II:Mental State:Intent/Knowing or Negligent

competent legaladvice. Ms. Coravos violateddutiesowed to her client,Noble, to provide

Prong I:Duty Violated

sanction. See id. any aggravatingor mitigatingfactorsand whether they affectthe baseline Court then looks to the fourthand finalpartofthe analysis:the existenceof Conner's Case, 158 N.H. at303. Once the baselinesanctionisdetermined, the characterizingthe misconduct and determininga baselinesanction. See The firstthreepartsof the analysiscreatethe framework for p. 11 Page 11 of

File Kevin E. Sharkey, Esquire cc: ElizabethM. Murphy, AssistantDisciplinaryCounsel

thisPublicCensure forviolatingRulesofProfessionalConduct 1.1 and8.4(a). For allofthe above reasons,the ProfessionalConduct Committee issues

investigationand prosecutionofthismatter. agreement.Ms. Coravosshallbe responsibleforallcostsassociatedwiththe and prosecutionofthisdisciplinarymatter.The Committeeapprovesthis Ms. Coravoshas signed an agreement to paycostsof theinvestigation

omitted).The sanctionisalsoin accord with the Standards. in the future." Crew's Case, 156 N.H. 361, 365 (2007) (quotationand citation bar,preservetheintegrityofthelegalprofession,and preventsimilarconduct punishmentbut rather toprotectthepublic,maintainpublicconfidencein the (2005).The purpose of theCourt'sdisciplinarypower "is not toinflict e.g.,Conner'sCase 158 N.H. at303; Richmond'sCase, 152 N.H. 155,159-60 Thissanctionis inaccordwith thepurposesofattorneydiscipline. See

appropriatesanction.The Committee agrees. downward departureis notwarrantedand a publiccensureremains the Despitethemitigatingfactors,however,the parties agreethata

practicinglaw until thecriminaland civilissuescouldbe resolved. Marinoissue toMr. Lindsey'sattention, and that she voluntarily refrainedfrom 9.32. OthermitigatingfactorsincludethefactthatMs. Coravosbrought the