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Seattle lawyer Michael H. Gale (WSBA No.8897 admitted 1979) has been disbarred from the practice of law effective April 24, 1997. The disbarment was pursuant to a stipulation.
In the stipulation, Gale admitted that in 1984 he proposed to a client that the client employ all of his office staff through a corporation established by Gale. Gale advised the client that this would enable the client to establish his own benefit plans without discriminating against employees, since the client would have no employees. Gale helped the client establish a separate plan for himself. Under the terms of the arrangement, the client paid Gale a monthly sum representing the gross payroll obligation for the staff then employed, including FICA, FUTA, Medicaid, Washington State Employment Security, Washington State Department of Labor and Industries taxes, Washington B&O taxes, medical reimbursement, uniform costs, vacations, and sick leave. Gale prepared the payroll and issued payroll checks to each employee including an accounting for the deductions. Gale purported to create a 10% purchase money pension plan for the employees, when in fact, Gale did not create a pension plan for the employees. (He created a 25% purchase money pension plan for the client individually.) Annually, Gale prepared and sent to each employee a W-2 form which in all respects appeared to be accurate. Gale did not file the Social Security Administration copies of those W-2 forms with the Social Security Administration. Between 1985 and 1996, Gale misappropriated all of the money given to him by the client except the net pay amounts paid to each employee. Gale prepared annual statements of contributions and allocations of earnings and falsified brokerage statements to support earnings calculations for each employees’ "pension" funds. On two occasions, Gale paid a withdrawing employee's "pension" funds with a cashier's check. On one occasion, a withdrawing employee left her funds in the "plan." On a more-or-less annual basis, Gale advised his client that he was still in compliance with the anti-discrimination laws regarding the two plans. Over the 12-year period, the client funds misappropriated by Gale totaled $287,944.73.
Gale stipulated that his conduct summarized above violated RPC 8.4(b), which prohibits a lawyer from engaging in a criminal act that reflects adversely on the lawyer’s honesty or trustworthiness, RPC 8.4(c), which prohibits a lawyer from engaging in acts involving dishonesty, fraud, deceit or misrepresentation, and RPC 4.1, which prohibits a lawyer from knowingly making false statements to a third person and failing to disclose material facts to a third person. Gale must make restitution of $287,944.83 and any additional restitution he may be ordered to pay in any criminal proceeding, and pay discipline costs and expenses of $1,000.
Gale appeared pro se, although he was assisted by counsel. The Association was represented by disciplinary counsel William G. McGillin.
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