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12/15/88 In Re Arnold Jerome Karzov

December 15, 1988

IN RE ARNOLD JEROME KARZOV, ATTORNEY, RESPONDENT.


SUPREME COURT OF ILLINOIS

533 N.E.2d 856, 126 Ill. 2d 33, 127 Ill. Dec. 774 1988.IL.1793

Disciplinary proceeding.

Rehearing Denied January 30, 1989

APPELLATE Judges:

JUSTICE MILLER delivered the opinion of the court. JUSTICE STAMOS took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MILLER

As a result of activities uncovered by the Operation Greylord investigation of Judge Reginald J. Holzer, the Administrator of the Attorney Registration and Disciplinary Commission filed a two-count complaint charging the respondent, Arnold Jerome Karzov, with professional misconduct. The Administrator alleged that respondent engaged in two separate financial transactions with Judge Holzer and, in each instance, violated Rule 7 -- 110(a) (giving or lending a thing of value to a Judge); Rule 1 -- 102(a)(3) (engaging in illegal conduct involving moral turpitude); Rule 1 -- 102(a)(5) (engaging in conduct that is prejudicial to the administration of Justice); Rule 1 -- 103(a) (failing to report knowledge of a violation of Rules 1 -- 102(a)(3) or (a)(4)); and Canon 9 (failing to avoid the appearance of professional impropriety) of the Illinois Code of Professional Responsibility (107 Ill. 2d R. 1 -- 101 et seq.).

A panel of the Hearing Board found for respondent on count I, against respondent on count II, and recommended that respondent be suspended from the practice of law for 15 months. Both respondent and the Administrator filed exceptions to the Hearing Board's report and recommendation. The Review Board disagreed with the Hearing Board, finding against respondent on both counts and recommending a two-year suspension from the practice of law. Respondent then filed exceptions with this court to the Review Board's report and recommendation. See 107 Ill. 2d R. 753(e)(5).

Respondent was licensed to practice law in this State in 1962 and, since his admission to the bar, has practiced primarily in the area of business law with an emphasis on chancery matters. Judge Holzer was assigned to the chancery division of the circuit court of Cook County from 1978 to 1985. For five or six of those years, respondent had 12 to 15 cases before Holzer, or approximately two to three cases per year. Respondent knew Holzer on a first name basis but was not a social friend. The facts, findings, and recommendations as to each count are set forth separately below.

COUNT I

Beginning in 1976, one of respondent's principal clients was Albany Bank and Trust Company, N.A. (Albank), for whom he acted as general counsel. Respondent owned about 2% of Albank's stock and was secretary to the board of directors, but was neither a director himself nor a member of the loan committee. In February 1981, respondent had one case pending before Holzer. (Albany Bank & Trust Company v. Helfer (Cook Co. Cir. Ct.), No. 80 -- CH -- 9046.) The case was a mortgage foreclosure proceeding brought by Albank on a delinquent mortgage.

In the same month, February 1981, respondent went to the outer office of Holzer's chambers to have an order file-stamped by Holzer's clerk. Present in the office with respondent were Holzer's clerk and several other attorneys who were also there to have orders file-stamped. While respondent waited, Holzer came into the outer office and asked respondent for the name of a loan officer at Albank. Respondent gave Holzer the name of a senior loan officer, Mr. Joseph Kurtzke. Holzer then applied for a loan from Albank through Kurtzke. Later that month, Kurtzke called respondent for information about Holzer in connection with the loan. Kurtzke asked respondent whether he knew anything unfavorable about Holzer, and respondent replied that he did not. Then, on February 18, 1981, Holzer received a $24,000, unsecured loan from Albank.

The Administrator alleged that respondent had used his position as general counsel for Albank to help Holzer obtain the $24,000 loan and charged him with violating Rule 7 -- 110(a), which prohibits giving or lending a thing of value to a Judge, and also with violating the other Code provisions cited above. At the hearing, the Administrator's evidence consisted of respondent's testimony about the circumstances surrounding the loan and a loan memorandum form prepared by Kurtzke in the course of processing Holzer's loan application. The circumstances surrounding the loan showed that respondent's practice caused him to appear before Holzer periodically, that Holzer knew respondent represented Albank, and that Albank then had a case pending before ...


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