Oct. 16, 2019 – What should a lawyer do when learning an “indigent” client isn’t really indigent?
I represent a criminal defendant who was evaluated as indigent by the State Public Defender’s Office, which then appointed me as counsel. I have come to learn from the client that he has assets he intentionally did not disclose when being evaluated and it is clear to me that the client is not actually indigent.
Do I have an obligation to reveal this fact to the court? Must I withdraw?
While no Wisconsin case or opinion addresses this situation, two ethics opinions from other states address appointed counsel’s obligations when counsel learns that the client is not, in fact indigent.
Illinois Ethics Op. 95-14 framed the question as:
An indigent defendant completes an assets and liabilities affidavit. Based upon the information in the affidavit, the court appoints the public defender. During the course of this representation, the defendant confides to counsel that he has a trust fund with the ability to access up to $3500.
The opinion notes the tension between the duty of confidentiality to the client and the duty of candor towards the tribunal:
This inquiry presents the conflict faced by lawyers between their private duty of maintaining client confidentiality and their public duty to maintain the integrity of the judicial system by complete candor with the court. Both the ethical opinions and case law agree that limits to zealous representation are necessary to maintain the integrity of the adversary process. Those authorities also conclude that a failure to disclose when required by the Rules to do so is tantamount to affirmative misrepresentation.
In the view of the Illinois State Bar Ethics Committee, the duty of candor towards the tribunal prevails:
The Committee has assumed that the lawyer knows that the court's knowledge of the client's concealed asset of $3500 would preclude the appointment of the public defender. If so, it is a material fact known to the lawyer and disclosure may be necessary if the lawyer is to avoid assisting the client's fraudulent act by the lawyer's silence. Failure to disclose the client's fraud in securing the free legal services of the public defender assists the client in continuing the fraud upon the court. Subsection (a)(2) of Rule 3.3 prohibits failure to disclose a material fact if necessary to avoid assisting a fraudulent act by the client, and subsection (a)(6) restricts a lawyer from assisting a client in conduct the lawyer knows to be fraudulent.
In response to the question posed by the inquiry, the lawyer not only may reveal, but might be required to reveal such information to the court if it is necessary to rectify the fraud if the lawyer's efforts to persuade the client to rectify the fraud are unsuccessful.
In contrast, Nassau County Ethics Op. 03-1 took the position that the lawyer may not reveal the fact that the client is not indigent, but must seek to withdraw from the representation:
However, an attorney may not facilitate a client's efforts to perpetuate a fraud upon the tribunal. Therefore, under DR 7-102(B) (1) if the attorney receives information clearly establishing that the client has misrepresented his or her financial condition for the fraudulent purpose of securing the legal services of the 18-B program, the attorney must call upon the client to rectify the fraud upon the tribunal. If the client fails to do so, the attorney should seek to withdraw from the representation, but he or she may not reveal the client's misrepresentation unless ordered to do so by the Court. DR 4-101 (C) (attorney may reveal secrets if "required by ....court order"). If the disclosure is not ordered and the motion to withdraw is not successful, then the attorney at least will have taken those steps ethically necessary to fulfill his or her duties under the Code of Professional Responsibility.
Like the Illinois opinion, the Nassau County opinion relies on rules that differ in some respects from Wisconsin’s current rules.
Court vs. Public Defender’s Office
Moreover, in most cases in Wisconsin, the State Public Defender’s Office, rather than a court, makes the indigency evaluation and assigns counsel, so the false statement about assets will not have been made to a court. This is significant, because the disclosures obligations to correct previously made false statements of material fact or false evidence presented to the court under SCR 20:3.3 would not apply and do not apply on the facts, given the scenario under consideration.
org tpierce wisbar Tim Pierce is ethics counsel with the State Bar of Wisconsin. Reach him by org tpierce wisbar email or through the Ethics Hotline at (608) 229-2017 or (800) 254-9154.
Pursuant to Wis. Stat. section 977.06(2)(b), however, it is a Class I felony to knowingly make a false statement “for purposes of assigning counsel.” The mandatory disclosure obligation under SCR 20:1.6(b) requires a lawyer to make disclosures to prevent a client form committing a criminal or fraudulent act, but the criminal act already occurred when the client intentionally misstated assets and can no longer be prevented.
Lawyers are prohibited from assisting a client in conduct that the lawyer knows is criminal or fraudulent by SCR 20:1.2(d). ABA Comment  to SCR 20:1.2 states:
When the client's course of action has already begun and is continuing, the lawyer's responsibility is especially delicate. The lawyer is required to avoid assisting the client, for example, by drafting or delivering documents that the lawyer knows are fraudulent or by suggesting how the wrongdoing might be concealed. A lawyer may not continue assisting a client in conduct that the lawyer originally supposed was legally proper but then discovers is criminal or fraudulent. The lawyer must, therefore, withdraw from the representation of the client in the matter. See Rule 1.16(a). In some cases, withdrawal alone might be insufficient. It may be necessary for the lawyer to give notice of the fact of withdrawal and to disaffirm any opinion, document, affirmation or the like. See Rule 4.1.1
While determinations about what might constitute criminal or fraudulent conduct are beyond the scope of this article, it seems reasonable to conclude that the client who has knowingly misstated their assets has violated the law to obtain assigned counsel, and that continuing to provide the illegally obtained services is assisting the client in furthering the client’s unlawful act.
Once the lawyer has actual knowledge of this fact,2 as in the situation under consideration here, the lawyer must withdraw. The lawyer must be careful to observe their confidentiality obligations to the client when seeking the court’s permission to withdraw.3
Thus, Wisconsin’s current rules would seem to be in accord with the guidance offered by the Nassau County Bar’s opinion, in that the lawyer normally may not reveal the client’s past misconduct, but must withdraw.
Knowing Is Important
It is important to bear in mind that, under the facts of this hypothetical situation, the lawyer has actual knowledge that the client intentionally misstated their assets. A lawyer’s suspicion that a client is not indigent would not necessarily trigger the same obligations, and such suspicion would not trigger an obligation on the part of the lawyer to investigate further.
Further, as is important to note, a lawyer’s obligations may differ significantly if the indigency determination were made by the court, rather than the State Public Defender.
In Case You Missed It: Read Past Ethical Dilemmas
Ethical Dilemmas appears monthly in InsideTrack. Check out these topics from recent issues:
On the Death of a Client, Sept. 18, 2019
What are a lawyer's duties when their client dies while a case is pending? When does a lawyer's authority to act on behalf of a client end?
Office Clean Up: Considerations in Closed Client Files, Aug. 21, 2019
File cleanup: What do you need to know in storing and destroying old files from closed client cases? How long do you have to wait before destroying closed client files? And do you need permission of the former client before destroying them?
1 Emphasis added.
2 SCR 20:1.0(n) defines knowledge as actual knowledge of the fact in question, which may be inferred from the circumstances. A lawyer’s responsibilities under SCR 20:1.2(d) may be different if the lawyer has reasonable belief as opposed to knowledge.
3 See SCR 20:1.16, ABA Comment .