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In re Surgent

Decided: December 11, 1986.

IN THE MATTER OF JOHN W. SURGENT, II, AN ATTORNEY AT LAW


On an order to show cause why respondent should not be disbarred or otherwise disciplined.

For disbarment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None.

Per Curiam

This disciplinary proceeding arose from a motion filed by the Office of Attorney Ethics (OAE) before the Disciplinary Review Board (DRB), seeking final discipline of respondent, John W. Surgent, II, pursuant to Rule 1:20-6. The motion was based on respondent's criminal conviction in this State of conspiracy to commit theft by deception, contrary to N.J.S.A. 2C:5-2 and 2C:20-4, and his conviction in the U.S. District Court, Southern District of New York, of 14 felony offenses that included conspiracy, stock fraud, sale of unregistered securities, and subornation of perjury, contrary to 15 U.S.C. § 77e, 77x, 78j(b) and 78ff; 17 C.F.R. § 240, 10b-5; and 18 U.S.C. § 1341, 1343, 371, 1622 and 2.

The DRB recommended that respondent be disbarred. Our independent review of the record leads us to accept that recommendation.

I

The DRB summarized the relevant facts as follows:

Respondent, who was admitted to the Bar in 1967, was suspended from the practice of law on May 30, 1979 for improper execution of jurats, improper involvement in a business transaction concerning a client and conflict of interest in representing a corporation. [ In re Surgent ] 79 N.J. 529 (1979). While his petition for reinstatement was pending before this Board in early 1980, a Sussex County Grand Jury returned indictment I-86-79-J which charged him with obtaining money under false pretenses (Count 1, N.J.S.A. 2A:111-1) and with making a false statement (Count 2, N.J.S.A. 2A:111-8). The Board on March 19, 1980, denied the petition for reinstatement until the resolution of these criminal charges. While this indictment was pending, a federal grand jury handed up a 16-count indictment against Respondent and another individual. Respondent was charged in 14 counts with conspiracy (Count 1); selling unregistered securities (Count 2 through 7); securities fraud (Count 9 through 11); mail fraud (Count 12 and 13); wire fraud (Count 15) and subornation of perjury (Count 16). The indictment charged Respondent and his co-defendant with engaging in a criminal conspiracy to enrich themselves at the expense of the investing public and shareholders of World Gambling Corporation, a company which they controlled. The indictment alleged they unlawfully traded in company stock, misappropriated corporate assets and issued false and materially misleading statements to shareholders. The two were also charged with attempting to obstruct a Securities and Exchange Commission investigation into the company by suborning perjury. A jury convicted Respondent of all 14 counts on March 19, 1982. He was sentenced on June 9, 1982, to a total of ten years in prison. In imposing the sentence, the court noted:

There was a deliberate, elaborate scheme carried out with various mechanisms to acquire small businesses which were vulnerable in unfortunate positions. The scheme involved holding out to these people that these businesses would be given financial infusions, would be given superior management, and therefore have a chance of survival.

Instead, these businesses were simply used as a vehicle for looting what small amount of assets remained, so Mr. Surgent and his co-schemers simply put their hands in the pockets of these little companies and robbed them of whatever was left.

I could hardly imagine a more cynical, a more dishonorable, more dangerous kind of fraudulent conduct.

The judgment of conviction was affirmed by the U.S. Court of Appeals for the second circuit in an unpublished opinion filed January 4, 1983. The United States Supreme Court denied certiorari on April 18, 1983. [ Surgent v. United States, 460 U.S. 1086, 103 S. Ct. 1779, 76 L. Ed. 2d 349 (1983).]

A Passaic County Grand Jury returned indictment 0162-83B against Respondent and another individual. Respondent was charged with conspiracy (Count 1) and seven counts of theft by deception (Count 8, 14-17, 21 and 24). Respondent was ...


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