Can a lawyer help a client re-title or refinance property the client had fraudulently conveyed, and must the lawyer report the past fraud?
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This page answers the general question as of 1991. Ezel answers yours: whether it's allowed on your facts, under the current rules of professional conduct in your state, with citations.
Plain-English summary
A lawyer learned that his client had previously made a fraudulent conveyance of property to a third party in order to defraud the client's wife in a divorce and his creditors in a Chapter 11 bankruptcy. The lawyer asked whether he could help the client transfer the property's title back and whether he had to report what he had learned.
The committee was of the opinion that the lawyer would be assisting a fraud if he represented the client in now transferring title of the property to him. It added that helping the client obtain refinancing of the house would place a potential cloud on the title, because of possible marital and bankruptcy claims that had not been disclosed, and that the lawyer therefore could not so represent him.
On the disclosure question, the committee concluded that because the information was disclosed to the lawyer in the context of an attorney-client relationship, the lawyer had no duty to report the client's past conduct to the bankruptcy trustee or the family court, citing RPC 1.6.
Currency note
This opinion was issued in 1991, before the 2006 revisions to the Washington Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can the lawyer help the client transfer the fraudulently conveyed property back into the client's name?
A: No. The committee was of the opinion that the lawyer would be assisting a fraud by representing the client in transferring title of the property to him.
Q: Can the lawyer help the client refinance the house?
A: No. The committee said doing so would place a potential cloud on the title because of undisclosed marital and bankruptcy claims, so the lawyer could not represent him in that.
Q: Must the lawyer report the client's past fraud to the bankruptcy trustee or the family court?
A: No. The committee concluded that because the information was disclosed within the attorney-client relationship, the lawyer had no duty to report the past conduct, citing RPC 1.6.
Background and rules framework
The opinion applied RPC 1.2(d), Washington's rule prohibiting a lawyer from counseling or assisting a client in conduct the lawyer knows is criminal or fraudulent, and RPC 1.6 on confidentiality, corresponding to ABA Model Rules 1.2(d) and 1.6. The committee separated the bar on assisting a continuing or new fraud from the confidentiality protection covering the client's already-completed past conduct.
Citations and references
Rules of Professional Conduct:
- ABA Model Rule 1.2(d) (limits on assisting client crime or fraud) / Washington RPC 1.2(d)
- ABA Model Rule 1.6 (confidentiality of information) / Washington RPC 1.6
See also
Source
- Landing page: https://ao.wsba.org/print.aspx?ID=513
Original opinion text
Reproduced from the official source for research purposes. The linked source is authoritative.
Advisory Opinion: 1433
Year Issued: 1991
RPC(s): RPC 1.2(d); 1.6
Subject: Assisting client with transferring property previously fraudulently conveyed; client confidence or secret; duty to disclose client fraud
The Committee reviewed your inquiry concerning information you have received that your client previously made a fraudulent conveyance to a third party to defraud his wife in a divorce and his creditors in a Chapter 11 bankruptcy. The Committee was of the opinion that you would be assisting a fraud if you represented the client in now transferring title of the property to him. The Committee is also of the opinion that to assist the client to obtain refinancing of the house would be placing a potential cloud on the title because of possible marital and bankruptcy claims that were not disclosed and therefore you could not so represent him. Finally, because this information was disclosed to you in the context of an attorney-client relationship, you have no duty to report the client's past conduct to the bankruptcy trustee or the family court. See RPC 1.6.
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