By Charles Toutant
The New Jersey Supreme Court has suspended Kenilworth attorney Howard Burger for two years over improper loans to a client.
Burger made a series of loans totaling $410,000 between 1997 and 2009 to Al Amjady, the operator of a used-car lot in Elizabeth, whose business relationship with Burger had evolved into a close friendship, according to the Disciplinary Review Board.
He made the initial loan of $150,000 to allow Amjady to purchase land for the used-car lot, and the loans were secured by the land, the disciplinary board said.
The board found Burger committed tax fraud by collecting interest payments from Amjady, failing to deposit the payments in a bank account and failing to pay federal or state taxes on that income.
But Burger later filed amended tax returns and paid back taxes owed to the federal and state governments, the disciplinary board said.
The board also said Burger “arguably” committed insurance fraud by taking out a life insurance policy for Amjady, which was based on misrepresentations of Amjady’s income and net worth. It also noted that Burger engaged in tax fraud, despite his masters degree in corporate law and his experience as founder of The Enterprise Bank, a commercial financial institution.
‘Exclusively in Cash’
In 2017, after Amjady stopped making payments on the debt, Burger brought a foreclosure action. Amjady, through counsel, sought to nullify the mortgages based on Burger’s alleged conduct in making loans that were “not fair or reasonable” and were “not fully disclosed or understood,” the disciplinary board said. A superior court judge ruled for Burger, entering a judgment of foreclosure after finding Amjady was a sophisticated businessman and the mortgage was valid.
A District Ethics Committee found that Burger violated New Jersey Rules of Professional Conduct 1.7(a)(2), which governs conflict of interest, and 1.8(a), improper business transaction with a client. It found an attorney-client relationship existed between Burger and Amjady at the time the loans were made, and Burger failed to obtain Amjady’s signature on a conflict waiver. The ethics committee declined to charge Burger with violation of Rules 8.4(b), commission of a criminal act, and 8.4(c), conduct involving dishonesty, fraud or deceit.
The Disciplinary Review Board reinstated the charges based on 8.4 (b) and (c) after the Office of Attorney Ethics argued that Burger willfully evaded income taxes, even though he was not charged criminally with tax evasion. The Office of Attorney Ethics cited Burger’s statements under oath that he recorded all his finances on Quicken software, with the exception of the interest payments from Amjady.
Burger “engaged in numerous improper mortgage loan transactions with Amjady, spanning more than nineteen years,” and that he “committed all this misconduct for the pecuniary benefit of himself, his family and other investors, operating exclusively in cash, reaping a significant profit, and then willfully evading income taxes on that very profit from 2010 to 2016. In fact, respondent finally admitted, during oral argument before us, after multiple prior denials during the course of these ethics proceedings, that he paid his back tax obligations only after the ethics grievance was filed in this case,” the board said.
By way of mitigation, Burger pointed out that he provided pro bono assistance for his synagogue and for surrogates’ courts in Essex and Union counties, including assisting victims of the 9/11 terrorist attacks. He also cited his extensive involvement in his local Rotary Club and his experience as an Eagle Scout.
Five Disciplinary Review Board members voted for a two-year suspension of Burger, and three others voted to disbar him.
The Supreme Court upheld the charges of vRPC 1.7(a)(2), 1.8(a), 8.4(b) and (c) and the two-year suspension, in an order made public Wednesday.
Petar Kuridza of Lewis Brisbois Bisgaard & Smith in Newark, representing Burger in the case, did not return a call for comment.
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