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Matter of Gillespie

Decided: May 17, 1991.

IN THE MATTER OF JOHN A. GILLESPIE, AN ATTORNEY-AT-LAW


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

Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi, and Stein join in this opinion.

Per Curiam

On November 28, 1989, this Court temporarily suspended respondent, John A. Gillespie, from the practice of law based on his guilty plea in federal court to a charge of willfully aiding

and assisting in the presentation of false corporate tax returns by J.P. Sasso, Inc., a construction company. On the motion of the Office of Attorney Ethics (OAE) for final discipline based on that conviction, see Rule 1:20-6(c)(2)(i), a majority of the Disciplinary Review Board (DRB) recommended that Gillespie be suspended for three years, retroactive to the date of his temporary suspension. Three members voted to disbar.

The full text of the DRB's Decision and Recommendation reads as follows:

This matter is before the Board on a Motion for Final Discipline filed by the Office of Attorney Ethics (OAE), based on respondent's guilty plea to willfully aiding and assisting in the presentation of false corporate tax returns by J.P. Sasso, Inc., a construction company, for the period ending June 30, 1985, in violation of 26 U.S.C.A. ยง 7206(2).

On December 27, 1989, respondent was ssentenced to a term of three years' imprisonment, for which all but a period of 120 days was suspended. Respondent was placed on probation for three years, commencing on his release from confinement. He was also ordered to perform 600 hours of community service and to participate in an alcohol treatment program, if deemed necessary by the United States Probation Office.

The prosecution version of the facts is set forth in the presentence report:

The defendant pled guilty to a one-count Information charging him with aiding in the presentation of false corporate income tax returns of J.P. Sasso, Incorporated, for the period ending June 30, 1985. This defendant unlawfully assisted Joseph P. Sasso and others to divert $79,550.66 from the corporate accounts of J.P. Sasso, Inc., during the period of April 5, 1985, to July 23, 1985.

This matter came to the attention of federal law enforcement authorities as part of an ongoing investigation into labor racketeering in the Union County area. Search warrants were executed at several locations and one search warrant included a search of the home of one Joseph P. Sasso. Through analysis of the records of Mr. Sasso's construction company, J.P. Sasso, Inc., it came to the attention of investigating authorities that a large amount of cash had been generated through Mr. Sasso's business account. Mr. Sasso's business account, in the name of J.P. Sasso, Inc., was held at the First Fidelity Bank in Irvington, and later, the National State Bank in South Orange, New Jersey.

It came to the attention of the authorities that on three separate occasions checks were written on the corporate account of J.P. Sasso, Incorporated.

Two of the checks were written to [Oak Tree Road Associates].*fn1 The two checks were then deposited into the individual account of John Gillespie. Gillespie was aware that the check amounts were not reported on the corporate income tax. Mr. Gillespie is an attorney and a friend of John Palaia. One check in the amount of $51,520.66 was endorsed by Joseph P. Sasso and later endorsed by Mr. Gillespie and deposited in Mr. Gillespie's individual account on April 5, 1985. On July 8, 1985, a check in the amount of $10,530 was again written on the corporate account, endorsed by Mr. Sasso and endorsed by Mr. Gillespie and deposited into Mr. Gillespie's account. In order for a check drawn on a corporate account to be deposited in an individual account, it must have the approval of a bank officer. Mr. Palaia, as Vice President of Commercial Loans for the bank, approved the deposit of both corporate checks in an individual account. John Gillespie then wrote out checks drawn on his individual account to cash and gave the cash to Mr. Sasso. He wrote out approximately eight personal checks between April 1985 and July 1985, in amounts of less than $10,000. He wrote them in amounts of less than $10,000 so as to avoid Currency Transaction Reporting requirements. He was following the advice of Mr. Palaia. Mr. Palaia personally approved the checks and wrote his initials on the back of each one of them. Mr. Palaia performed this service for those connected with Mr. Sasso and no one else.

On June 14, 1985, the third check in the amount of $17,500 was drawn on the corporate account of J.P. Sasso, Inc. The check was endorsed by Mr. Sasso and Mr. Gillespie. Mr. Palaia authorized the deposit of the check into Mr. Gillespie's personal account. Mr. Gillespie then withdrew the $17,500 in two separate Treasurer's checks, one for $9,675, the other for $7,825. Both checks were authorized by Mr. Palaia. The $9,675 check was cashed by Mr. Gillespie, the $7,825 check was cashed by one John Amato after being endorsed by Mr. Gillespie and then co-endorsed by Amato. The $17,500 check was split into two separate checks so as to avoid Currency Transaction Reporting requirements. Mr. Amato was a bookkeeper for Mr. Sasso's business. Mr. Palaia advised Mr. Gillespie to split the checks so as to avoid Currency Transaction Reporting requirements. This money was not declared as income on the corporate tax return of J.P. Sasso, Inc. John Palaia and John Gillespie were aware that the money was not being reported on the corporate income tax return.

Mr. Palaia was introduced to investors through his dealings with Mr. Sasso and Mr. Gillespie. Through a Mr. James Palermo, Mr. Palaia was introduced to one Vincent Craparotta, a partner of Mr. Palermo's in Beybrook Estates, a housing development in Dover, New Jersey. Palaia knew that Beybrook Estates needed "seed money" in order to get the project started. Mr. Palaia asked Mr. Craparotta about various lots

that were offered through Beybrook Estates. He was interested in them for investment purposes. Mr. Palaia obtained the three lots via a "gentlemen's agreement" with Mr. Craparotta to agree to purchase the lots for a total of $86,000. At that time Palaia was not required to put down any cash. One and one-half years later, Mr. Palaia inquired about selling the lots as he was in the processing of purchasing a home in Bridgewater, New Jersey. Palaia told Mr. Craparotta that he wanted to sell the options and he needed the money for a down payment for the new home. The two of them then decided that Palaia held the option to purchase. Mr. Craparotta needed a short term loan of $45,000 in which to pay Palaia. Palaia then wrote an internal bank letter for $45,000 to his bank, the National State Bank, stating that the loan was for on-site improvements for a ...


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