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Tolan S. Furusho (WSBA No. 25055, admitted 1995), of Bellevue, was disbarred, effective August 22, 2008, by order of the Washington State Supreme Court following approval of a stipulation. This discipline is based on conduct involving the commission of a criminal act, making false statements to third persons, and engaging in conduct involving deceit or misrepresentation.
Mr. Furusho was the registered agent for a corporation which owned the majority of outstanding shares of stock of another corporation (Corporation E). Corporation E was a publicly traded Washington corporation based in Salt Lake City, Utah, purporting to be a developmental stage company that was in the business of developing coal mining properties in Wyoming. During all material times, Mr. Furusho's legal practice focused in part on securities law. As part of his practice, Mr. Furusho was familiar with securities laws governing restricted stock, exemptions from registration, freely tradable stock, restrictive legends, and opinion letters regarding exemptions from registration requirements. Mr. Furusho agreed to provide an attorney opinion letter to a co-conspirator (Ms. K) for Corporation E stating that the stock of Corporation E complied with an exemption from federal securities registration requirement. On May 9, 2006, Mr. Furusho signed an opinion letter drafted by Ms. K and sent it interstate via facsimile to Corporation E's transfer agent. Mr. Furusho knew the transfer agent would rely on the representations in his opinion letter to re-issue restricted shares of Corporation E's stock as freely tradable stock. The opinion letter falsely stated that:
• The transfer agent could remove the restrictive legends on the shares of Corporation E stock that had been issued to co-conspirators because the stock met an exemption from registration.
• Mr. Furusho had been furnished with, and had examined, "all such records of the Company, agreements and other instruments, certificates of officers and representatives of the Company, certificates of public officials, and other documents…deemed…necessary…as a basis for the opinions."
• Mr. Furusho had reviewed "documents and representation letters provided by the Shareholder and the broker involved in this transaction."
Mr. Furusho knew at the time he signed the letter that the statements were false.
On or about May 9, 2006, Mr. Furusho and other co-conspirators, pursuant to Mr. Furusho's opinion letter, caused Corporation E's transfer agent to issue 17,390,000 freely tradable shares of Corporation E stock. Between June 7, 2006, and June 8, 2006, Mr. Furusho, by virtue of having issued his opinion letter, and other co-conspirators caused 487,000 freely tradable shares of Corporation E stock to be sold for a total of approximately $88,326. Respondent's actions as described above violated Title 15 United States Code Section 78j(b) (15 U.S.C. § 78j(b)), 15 U.S.C. § 78ff(a), and Title 17 Code of Federal Regulations Section 240.10(b)-5 (17 CFR § 240.10(b)-5), and 18 U.S.C. § 371.
During the 2004 tax year, Mr. Furusho received gross income of approximately $146,000. During the 2005 tax year, Mr. Furusho received gross income of approximately $37,000. Mr. Furusho's income during the tax years 2004 and 2005 was substantially in excess of the minimum filing requirements and required Mr. Furusho by law to file an income tax return. Mr. Furusho failed to file income tax returns for the tax years 2004 and 2005 in violation of 26 U.S.C. § 7203, which resulted in tax liability in the amount of $36,600. On November 28, 2007, Mr. Furusho pleaded guilty in U.S. District Court to violating of 15 U.S.C. § 78j(b), 3 15 U.S.C. § 78ff(a), 17 CFR 240.10(b)-5, 18 U.S.C. § 371, and 26 U.S.C. § 7203. On December 13, 2007, U.S. District Court entered an acceptance of Plea of Guilty, Adjudication of Guilt and Notice of Sentencing accepting Mr. Furusho's plea of guilty.
Mr. Furusho's conduct violated RPC 4.1(a), prohibiting a lawyer in the course of representing a client from knowingly making a false statement of material fact or law to a third person; RPC 8.4(b), prohibiting a lawyer from committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects; RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; and RPC 8.4(i), prohibiting a lawyer from committing any act involving moral turpitude, or another act which reflects disregard for the rule of law.
Jonathan H. Burke represented the Bar Association. Mr. Furusho represented himself. |