Two committees of the board that weighs disciplinary action against lawyers in the District of Columbia have recommended that two local lawyers -- a prominent divorce lawyer and a nationally known expert on legal ethics -- be publicly reprimanded for engaging in unethical conduct.
A committee of the Board on Professional Responsibility concluded that Mark B. Sandground, one of the city's best-known divorce lawyers, "actively and knowingly" participated in a client's attempt to conceal his cash holdings from his estranged wife in a 1983 divorce case.
A separate committee found that David T. Austern, who in the early 1970s served as the first director of the court office that investigates complaints against District lawyers, violated the rule against helping a client engage in fraudulent conduct by failing to withdraw as the lawyer in a real estate transaction after his client told him he had written a bad check to guarantee completion of a condominium renovation.
Sandground and Austern said they did not believe their conduct violated the ethical rules, according to the written reports filed in the cases.
The recommendations by the three-member committees -- the first step in the lawyer disciplinary process -- go to the Board on Professional Responsibility, which transmits its findings and recommendations to the D.C. Court of Appeals for final action.
In the Sandground case, the committee found that his actions constituted "dishonesty and misrepresentation" and "assisting a client in conduct known to be illegal or fraudulent."
Sandground's client, in financial statements submitted to his wife's attorney in July and August 1983, listed a bank account with a $2,500 balance, when in fact the account balance never fell below $10,000 and averaged more than $12,000, according to the committee's report.
A few weeks after the August statement, the client, who was not named in the report, gave Sandground a $12,000 check, and asked him to hold the money for him, the report said. Sandground never disclosed the existence of the funds to the wife's lawyer, who learned about the money in September 1983 from a lawyer to whom Sandground had referred the case, according to the report.
Sandground "knew or had every reason to know when he accepted the $12,000 that he would facilitate the client's purpose of concealing the full extent of his cash holdings from his wife and her lawyer, and he did it anyway," the committee found.
Sandground, it said, "may well need to be reminded that aggressive advocacy, while commendable within limits, must not be exercised in a fashion that contradicts a lawyer's ethical responsibility to meet the disclosure obligations of our legal system."
The D.C. Bar Counsel, which prosecutes lawyer disciplinary cases, urged that Sandground be suspended from practice for a year and a day, which would require that he demonstrate his fitness before being permitted to return to practice.
The committee, however, chose the lesser penalty of a public reprimand, noting Sandground's "unblemished record" during more than 25 years of practice and an impressive array of character witnesses who attested to Sandground's "integrity and honesty, and commitment to high standards of professional practice."
Sandground's lawyer, John Karr, said Sandground "denied having done anything he knew or should have known was wrong." He said the money the client gave to Sandground "was fully disclosed at the first opportunity."
The Austern case involved what the committee termed "one of the most troublesome and complex ethical problems an attorney may encounter" -- a clash between the lawyer's duty to protect a client's confidences and the rule against helping further a client's fraud.
According to the committee report, during the settlement on the sale of several condominium units in 1981, Austern's client, writer Milton Viorst, asked him to step outside the conference room and informed him that a $10,000 check Viorst had just written to guarantee the completion of renovations was "no good" because of insufficient funds.
Austern took no action, the settlement was completed, and the check was made good by the time any funds could be drawn against it, the committee said.
It found that Austern "spent a great deal of time considering his ethical obligation when his client presented him with a difficult situation" and "did not in any way intentionally intend to violate the Code of Professional Responsibility."
Austern, who served as an escrow agent for the money, argued that he did not help further an "ongoing fraud" because his client's "crimes" -- writing a false check and offering it to the purchasers -- were completed before the client informed him of the problem.
Even if the fraud were ongoing, Austern contended, his duty to protect his client's secrets outweighed his duty to avoid furthering the fraud, and withdrawing as the escrow agent would have violated the attorney-client privilege.
The committee concluded, however, that the fraud was an ongoing one, that Austern could have withdrawn without violating the privilege.
However, it said, considering "the outstanding character" of Austern, the "appropriate sanction" should be a public reprimand rather than more severe action.
On the good news front: D.C. Superior Court Judge Paul R. Webber -- one of four judges vying for the Superior Court chief judgeship -- will be honored by the Trial Lawyers Association of Metropolitan Washington as the Outstanding Trial Judge of the Year at a dinner Saturday . . . . National Bar Association President Fred D. Gray received the Washington Bar Association's 1986 Charles Hamilton Houston Medallion of Merit last month . . . . Wealthy Texan H. Ross Perot has given the Georgetown University Law Center $1 million to endow a chair in honor of tax expert and Georgetown Prof. Martin D. Ginsburg.