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Jeffrey Randall Bivens (WSBA No. 34100, admitted 2003), of Washougal, resigned in lieu of disbarment, effective January 6, 2011. This resignation was based on conduct involving false statements and the commission of a felony.
In 2006, Mr. Bivens represented a client in connection with the sale of his business. The client employed Mr. K as a commercial broker and appraiser. Mr. K established a value of the business at about $7.4 million. Mr. Bivens and others represented to the lender in the transaction (bank) and to the U.S. Small Business Administration (SBA), which guaranteed the loan, that the purchase price of the business would be $4 million. This amount was consistent with an independent appraisal performed by the bank. Based upon that $4 million purchase price and financial review of the business by the bank, the bank agreed to loan approximately $2 million, and the SBA agreed to guarantee 75 percent of the loan. That loan closed and funding occurred on or about May 23, 2007. Almost immediately thereafter, problems with the business surfaced and the loan went into default. In connection with those problems and in a separate criminal action, Mr. Bivens’s client was convicted of wire fraud, bank fraud, and money laundering. Mr. K was convicted of making material false statements relating to the sale and loan transaction.
In connection with the bank’s SBA loan for about $2 million, Mr. Bivens, in his capacity as counsel for the client, knowingly made a series of false representations during the underwriting and funding process. Mr. Bivens claimed the purchase price was $4 million, when in truth it was about $7.4 million. Mr. Bivens claimed that apart from the purchaser owing $2 million to the bank and SBA in connection with the loan, the purchaser’s only direct debt to the seller was set forth in two promissory notes in the total amount of $1.8 million. In truth, however, there was a third secret promissory note from the buyer to the client in the amount of $1 million. Mr. Bivens also represented, pursuant to bank and SBA requirements, that a continued employment contract for the client was limited to one year, when in fact it was a much longer time period. Through the SBA guarantee process and procedure, those misrepresentations, made by Mr. Bivens and others, were communicated to the SBA. If the SBA had learned of any of those misrepresentations, its guarantee of the loan would have been denied and the bank’s loan would also have been denied.
In conversations and in e-mails between Mr. Bivens and others working on the sale transactions, there were explicit communications about the falsity of the representations and the need to keep the true terms of the sale secret from the bank and SBA. To accomplish the loan but still maintain the true sales agreement between Mr. Bivens’s client and the buyer, the sale closing was structured by Mr. Bivens and others to occur in two separate sessions. The first closing included the bank and escrow officer, and the second was kept secret from them and included the secret $1 million promissory note and the true employment contract. The separation of the two closings was for the purpose of deceiving the bank and the SBA.
On October 20, 2010, Mr. Bivens entered a guilty plea to the charge of false statements, in violation of Title 18 US.C.§1001, a felony. Mr. Bivens signed a plea agreement admitting to the facts above.
Mr. Bivens’s conduct violated RPC 8.4(b), prohibiting a lawyer from committing a criminal act (here, false statements) that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects; and RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.
Erica W. Temple represented the Bar Association. Mr. Bivens represented himself. Donald W. Carter was the hearing officer. |