March 21, 2011
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
GARY L. EDELSON, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Indictment No. 08-05-0116.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 8, 2011
Before Judges Parrillo, Yannotti and Skillman.
Defendant appeals from the judgment of conviction entered on November 13, 2009, and challenges his conviction of misapplication of entrusted property, in violation of N.J.S.A. 2C:21-15, and the sentence imposed. For the reasons that follow, we affirm defendant's conviction but vacate the sentence and remand for re-sentencing.
Defendant was licensed to practice law in New Jersey. From 2003 to December 2005, defendant managed his own law firm in the Township of Red Bank, and focused primarily on real estate transactions. As part of his practice, defendant was entrusted with certain monies, which were deposited in his attorney trust account.
In 2005, the Office of Attorney Ethics (OAE) conducted a random audit of defendant's practice. On October 28, 2005, defendant was interviewed by the three-member panel of the OAE. In February 2006, the Monmouth County Prosecutor's Office (MCPO) received a copy of a letter from an attorney to the New Jersey Lawyers Client Security Fund, in which the attorney alleged that defendant had obtained but failed to disburse funds derived from a real estate transaction. The letter indicated that a copy also had been sent to the OAE.
In March 2006, Detective Matthew Veprek (Veprek), of the MCPO's Special Prosecutions Bureau, contacted the OAE and was informed that the OAE was conducting an investigation into the matter. The OAE informed Veprek that the MCPO would be notified when its investigation was complete and whether it had found any criminal conduct. In the ensuing months, Veprek documented other complaints concerning defendant.
The OAE investigation was completed in September 2006. On September 22, 2006, defendant signed a consent to his disbarrment, and the Supreme Court thereafter ordered his disbarrment. In re Edelson, 188 N.J. 282 (2006). On September 29, 2006, the OAE contacted Veprek and informed him of defendant's disbarrment. By letter dated October 13, 2006, the OAE informed Veprek that its investigative file was open for his inspection. In May 2007, Veprek met with an OAE compliance auditor and obtained financial records pertaining to defendant's trust account.
On April 21, 2008, a Monmouth County grand jury returned an indictment charging defendant with one count of second-degree misapplication of entrusted property, contrary to N.J.S.A. 2C:21-15. In September 2008, defendant filed motions to: suppress the records that the MCPO obtained from the OAE; suppress the statement that defendant gave to the OAE during its investigation; and dismiss the indictment on the basis of prosecutorial misconduct and a lack of evidence. On November 19, 2008, the court conducted a hearing and denied all three motions.
On May 11, 2009, defendant pled guilty to the charges. The court conducted a restitution hearing and ordered defendant to make restitution in the amount of $45,805.57 to First American Title Insurance Company. Defendant was sentenced on November 13, 2009. The court imposed a seven-year term of incarceration, and imposed appropriate fines and penalties.
Defendant appeals and raises the following issues for our consideration.
POINT 1 THE COURT BELOW ERRED BY ALLOWING INFORMATION OBTAINED FROM THE OFFICE OF ATTORNEY ETHICS IN VIOLATION OF A CONSENT AGREEMENT BETWEEN THE STATE AND THE APPELLANT.
POINT 2 THE STATE SHOULD NOT HAVE BEEN ALLOWED TO USE AN ADMINISTRATIVE SEARCH, WHICH IS PERMITTED TO BYPASS AN INDIVIDUAL'S FOURTH AMENDMENT RIGHTS, AS A FACADE FOR A CRIMINAL INVESTIGATION.
POINT 3 STATE AGENCIES WORKING IN CONCERT EXTRACTED DIRECT ELICITATIONS FROM THE DEFENDANT IN THE ABSENCE OF [MIRANDA*fn1 ] WARNINGS; THEREFORE, SUCH INVOLUNTARY STATEMENTS AND ANY EVIDENCE ARISING FROM THEM SHOULD HAVE BEEN SUPPRESSED.
POINT 4 THE COURT BELOW ERRED BY NOT DISMISSING THE INDICTMENT BECAUSE THE STATE FAILED TO PRESENT EVIDENCE SUPPORTING ALL ELEMENTS OF THE OFFENSE.
POINT 5 THE COURT BELOW ERRED BY NOT FINDING THAT THE CHARGE SHOULD HAVE BEEN ADJUSTED TO A THIRD DEGREE LEVEL.
POINT 6 THE COURT BELOW ERRED BY NOT ALLOWING DEFENSE COUNSEL TO CROSS EXAMINE [THE] STATE'S WITNESS REGARDING HIS GRAND JURY TESTIMONY.
POINT 7 THE STATE'S CONDUCT RUNS COUNTER TO PUBLIC POLICY, SPECIFICALLY BY CHILLING THE COOPERATION BETWEEN ATTORNEYS AND THE OFFICE OF ATTORNEY ETHICS.
POINT 8 THE TRIAL COURT ERRED BY NOT FINDING THAT APPELLANT'S SEVERE HEALTH ISSUES DEMANDED A LESSER SENTENCE AND HIS PLEA OF GUILT SHOULD NOT HAVE BEEN TAKEN INTO CONSIDERATION.
The State argues that defendant is barred from raising on appeal the issues in Points 1, 3, 4, 5, 6 and 7. We agree.
Here, defendant entered an unqualified plea of guilty to misapplication of entrusted property. Such a plea generally precludes a defendant from raising on appeal all claims with respect to his guilt for the crime to which he has pled guilty. State v. Knight, 183 N.J. 449, 470 (2005). There are only three exceptions to this rule. Id. at 471. A defendant may seek review of the denial of a motion to suppress physical evidence on the basis of an unlawful search or seizure, R. 3:5-7(d); the denial of admission to pre-trial intervention, R. 3:28(g); and adverse determinations on any pre-trial motion as to which the defendant had reserved on the record the right to appeal, R. 3:9-3(f). Knight, supra, 183 N.J. at 471.
Therefore, defendant is barred from raising on appeal the following claims: the State improperly presented evidence regarding his consent agreement with OAE to the grand jury (Point 1); the trial court should have suppressed his statement to the OAE because he was not informed of his Miranda rights (Point 3); the trial court erred by denying his motion to dismiss the indictment (Point 4); he should have been charged with a third-degree, rather than a second-degree offense (Point 5); the trial court erred by refusing to permit him to cross-examine Veprek when the court considered his motion to dismiss the indictment (Point 6); and the State's conduct in the investigation runs counter to public policy and should not be condoned (Point 7).
We turn to defendant's contention that the trial court erred by denying his motion to suppress the evidence that the MCPO obtained from the OAE, as argued in Point 2. Defendant argues that the evidence was obtained in violation of his rights under the Fourth Amendment to the United States Constitution. We disagree.
The trial court conducted an evidentiary hearing on defendant's suppression motion, at which Veprek testified. Thereafter, the court placed its decision on the record. The court found Veprek had testified credibly that the MCPO and the OAE had not engaged in a cooperative investigation and that the evidence in the OAE investigation had been properly disclosed to the prosecutor's office. The trial court's findings are binding on appeal because they are based on sufficient credible evidence in the record. State v. Elders, 192 N.J. 224, 243 (2007).
The evidence established that, although Veprek was aware in March 2006 that the OAE was investigating defendant's trust account, he was not involved in that investigation. The evidence also established that there was no contact between the MCPO and the OAE between March 2006 and September 2006, when the OAE informed Veprek that it had completed its investigation and defendant had consented to his disbarrment. In addition, the record shows that OAE advised Veprek in October 2006 that its investigative files were available for inspection, but Veprek did not obtain any of defendant's financial records from the OAE until seven months later.
Defendant argues that the OAE's investigative records were provided to the MCPO in violation of Rule 1:20-9, which governs the dissemination of information obtained in an OAE disciplinary investigation. However, there is no evidence that the MCPO obtained any information from the OAE in contravention of the requirements of the rule. As we stated previously, Veprek contacted the OAE after the MCPO received a copy of a letter from an attorney, who alleged that defendant had engaged in wrongful conduct with regard to certain monies that had been entrusted to him. The OAE confirmed that an investigation was pending, which was permissible under Rule 1:20-9(a)(3), because there was "a need to notify another person or organization . . . in order to protect the public, the administration of justice, or the legal profession[.]" In addition, the OAE did not disclose the records in its investigative file to the MCPO until after defendant had consented to his disbarrment, which disclosure is expressly authorized by Rule 1:20-9(f)(1).
The Supreme Court's decision in State v. Stroger, 97 N.J. 391 (1984), cert. denied, 469 U.S. 1193, 105 S. Ct. 971, 83 L. Ed. 2d 974 (1985), supports our conclusion that the OAE did not obtain defendant's financial information in violation of his Fourth Amendment right to protection from unreasonable searches and seizures. In Stroger, a District Ethics Committee (DEC) received a complaint indicating that an attorney for an estate had been entrusted with monies, failed to pay a specified bequest and spent the monies for his personal use. Id. at 397. The DEC informed the county prosecutor and the Division of Ethics and Professional Services (DEPS) of the complaint. Ibid. The DEPS had received other complaints about the attorney and required him to produce for review and audit certain financial records. Id. at 397-98. The DEPS released the records to the prosecutor's office after the Disciplinary Review Board (DRB) granted a request for their production. Id. at 399. The defendant then was charged with embezzlement. Id. at 399-400.
The defendant filed a motion to suppress all the records that had been voluntarily furnished to the DEPS and thereafter released to the prosecutor. Id. at 400. The defendant argued, among other things, that he had been denied his rights under the Fourth Amendment to the United States Constitution. Ibid. The Court rejected that contention, finding that no search or seizure occurred because the defendant had been required to maintain the records and knew or should have known that they were subject to "open examination." Id. at 403. The same conclusion applies here.
We therefore conclude that the records obtained by the OAE in its investigation were properly disclosed to the MCPO pursuant to Rule 1:20-9(f)(1). We further conclude that the OAE did not obtain defendant's records in violation of his Fourth Amendment right to protection from unreasonable searches and seizures.
Defendant contends that, although he pled guilty to a second-degree offense, the court should have sentenced him within the range for third-degree offenses. He further contends that even if a downgrade was not warranted, the seven-year sentence is excessive.
Here, the trial court found aggravating factors four, breach of a fiduciary responsibility, N.J.S.A. 2C:44-1(a)(4); and nine, need to deter defendant and others from violating the law, N.J.S.A. 2C:44-1(a)(9). The court found mitigating factors seven, defendant has no prior criminal record, N.J.S.A. 2C:44-1(b)(7); eight, the circumstances are unlikely to recur, N.J.S.A. 2C:44-1(b)(8); and eleven, incarceration will likely cause defendant undue hardship due to his ill health, N.J.S.A. 2C:44-1(b)(11). The court found that the aggravating factors outweighed the mitigating factors.
Defendant argues that while the court found mitigating factors seven and eleven, it failed to give sufficient weight to these factors. He notes that this is his first offense. He also notes that he is presently suffering from severe health problems. Defendant points out that he had a heart attack in February 2009; underwent open-heart bypass surgery in March 2009; a defibrillator was inserted into his chest; and he was readmitted to the hospital in August and September 2009, after having suffered several cerebrovascular strokes.
Defendant submitted to the trial court a letter from a board-certified cardiologist, who opined that defendant's prognosis is "guarded" and his life expectancy "significantly reduced." The doctor stated that, in his opinion, defendant's incarceration would further reduce his life expectancy and compound his medical problems "in a significant way." The doctor stated that defendant would require close medical monitoring, which would not be available if he is incarcerated.
The court stated that, because of the non-violent nature of defendant's offense, he could seek admission to the court's Intensive Supervision Program (ISP), which would result in his release from jail after "anywhere between 90 and 180 days." The court added that there are medical facilities in jail, where defendant would receive appropriate treatment.
The court also stated that imposition of a term of less than the seven years permitted by the plea agreement would diminish the seriousness of defendant's offense because he had taken advantage of his position of trust and confidence to commit the offense. The court observed that there was a need to deter defendant and others from violating the law, and review of the pre-sentence report indicated that defendant had shown little remorse for his actions.
N.J.S.A. 2C:44-1(f)(2) provides that a defendant who is convicted of a first- or second-degree offense may be sentenced "to a term appropriate to a crime of one degree lower" if the court "is clearly convinced that the mitigating factors substantially outweigh the aggravating factors and where the interest of justice demands[.]" In reaching this decision, the court must apply "the basic principles" of sentencing under Code, with the understanding that "the severity of the crime [is] the most single important factor in the sentencing process." State v. Megargel, 143 N.J. 484, 500 (1996).
We are convinced that the court did not err by finding that the mitigating factors did not "substantially outweigh" the aggravating factors. Therefore, a downgrade pursuant to N.J.S.A. 2C:44-1(f)(2) was not warranted. We conclude, however, that even if the mitigating factors did not "substantially outweigh" the aggravating factors, greater weight should have been given to them and, therefore, imposition of a seven-year sentence was a mistaken exercise of discretion.
We do not minimize the seriousness of defendant's offense. We also believe that there is a need to deter defendant and others from violating the law. We are convinced, however, that the trial court should have given more weight to the fact that this is defendant's first offense and he presently suffers from very serious medical problems. Therefore, we remand the matter to the trial court for reconsideration of the sentence.
On remand, the court should consider the following. As we stated previously, the court apparently assumed that defendant would be admitted to ISP and would only serve between "90 and 180 days" in jail. Although not part of the record on appeal, defendant has submitted documentation indicating that an application for admission to ISP was submitted on February 3, 2010. The ISP Assessment Report dated March 9, 2010, recommended that defendant be admitted to the program. A hearing was scheduled for May 6, 2010. Defendant's attorney says that it is his understanding that the panel deferred defendant's admission to the ISP for six months.
Defendant's conviction is affirmed and the matter is remanded to the trial court for resentencing. We do not retain jurisdiction.