DocketNumber: Appeal, No. 874 C.D. 1982
Citation Numbers: 76 Pa. Commw. 216
Judges: Blatt, Doyle, Rogers
Filed Date: 8/8/1983
Status: Precedential
Modified Date: 6/24/2022
Opinion by
This is an appeal by Harold Weinberg from an order of the State Board of Examiners of Publie Ac
In 1974, Weinberg, while engaged in the practice of public accounting with the firm of Winderman, Stein, and Weinberg, prepared a 1973 corporate income tax return for Southside AMC-Jeep, Inc. (Southside), a client. Weinberg learned that South-side’s 1973 return would be subject to a federal Internal Revenue Service (IRS) audit and met with IRS Agent Joseph Y. Maher. Maher informed Weinberg that he would accept a bribe to perform a no-change audit, Weinberg conveyed the offer to the owners of Southside and indicated that it might be cheaper to comply with the bribe than to risk the additional tax liability possible upon the disallowance of some of Southside’s deductions. The owners of Southside provided Weinberg with an envelope containing $1,500 for the bribe. Weinberg removed $500 for his own use and left $1,000 for Maher.
In early 1.975, Weinberg voluntarily contacted the IRS and confessed all that had taken place. His cooperation was solicited in an IRS investigation of dishonest agents and others suspected of criminal activity. He cooperated and submitted to a “body wire” to tape record conversations and his cooperation extended over a period of five or six months. As a result of Weinberg’s cooperation, Maher and another agent pleaded guilty to federal charges and served time in federal prison. Weinberg’s cooperation also led to the prosecution and conviction of his business partner, Stanley Stein, in 1976.
Since his cooperation with federal authorities in 1975, Weinberg has established a .sole .proprietorship and has built a successful accounting practice.
On September 16, 1981, the State Board , of Examiners of Public Accountants (Board) issued a Cita
A hearing was held on December 8,1981 and Weinberg’s testimony in the trial of his partner, Stein, constituted the Commonwealth’s case in chief. Testimony presented at the hearing also indicated that the IBS agent with whom Weinberg cooperated was no longer able to recall details of the 1974 incident and Weinberg’s cooperation or to provide access to the IBS files involved. On March 22, 1982, the Board, by Ad-
This Court has recognized that laches may be asserted as a defense in administrative disciplinary actions. Harrington v. Department of State, 58 Pa. Commonwealth Ct. 137, 427 A.2d 719 (1981); Ullo v. State Board of Nurse Examiners, 41 Pa. Commonwealth Ct. 204, 398 A.2d 764 (1979); see also Tighe v. State Board of Nurse Examiners, 40 Pa. Commonwealth Ct. 367, 397 A.2d 1261 (1979). Laches “bans relief when ‘the complaining party is guilty of want of due diligence.’ ” Leedom v. Thomas, 473 Pa. 193, 200, 373 A.2d 1329, 1332 (1977) (quoting Wilson v. King of Prussia Enterprises, Inc., 422 Pa. 128, 133, 221 A.2d 123, 126 (1966)).
In the case at bar, the Board urges that it is not guilty of laches because it acted with due diligence by disciplining Weinberg as soon as it learned of his wrongdoing. The Board alleges that it was unaware of Weinberg’s violations of the C.P.A. Law until it read his testimony in the 1976 Stein trial sometime during 1980. The Board urges that we must look to when the Board actually becomes informed of a professional’s misconduct to determine whether the doctrine of laches should apply. There is nothing in our case law to support the Board’s position.
We do not find the Board’s dilatoriness to constitute a grossly unreasonable delay, such that Weinberg’s burden to show that he was prejudiced by the
In addition, the record shows that, following his public testimony in the Stein trial, Weinberg had reason to rely on the Board’s inaction as indicative of an intent not to take disciplinary action against
We emphasize that Weinberg’s conduct in the 1974 handling of the Southside AMC-Jeep tax audit was abhorrent and in gross disregard of society’s standards of honesty as well as those of the accounting profession. Our opinion here is not to be read to condone such conduct, nor to excuse it merely because the wrongdoer later succumbs to conscience and confesses. Here, Weinberg did much more than simply admit his wrongdoing. As noted above, because of the Board’s delay, Weinberg was prejudiced in the preparation of
Accordingly, we reverse.
Order
Now, August 8, 1983, the order of the State Board of Examiners of Public Accountants in the above referenced matter, dated March 22, 1982 is hereby reversed.
Act of May 26, 1947, PX. 318, as amended, 63 P.S. §§9.1-9.16b. Weinberg was charged with violations of 63 P.S. §§9.9a(2), (4) and (10). 63 P.S. §9.9a provides, in pertinent part:
In accordance with the procedure referred to in section 9 of this act, the board . . . may revote or suspend any certificate of [a] certified public accountant ... for anyone or any combination of the following causes:
(2) Dishonesty, fraud or gross negligence in the practice of public accounting.
(4) Violation of a rule of professional conduct promulgated by the board under the authority granted by this act.
(10) Conduct discreditable to the public accounting profession.
Weinberg was charged with violation of rules promulgated under the O.P.A. Law, found at 49 Pa. Code §§11.22 and 11.27(b).
Our case law seems implicitly to the contrary. In Fumo v. Insurance Department, 58 Pa. Commonwealth Ct. 392, 427 A.2d 1259 (1981), we examined a two and one-half to three year period between Fumo’s criminal conviction and the Department’s discovery of it. Although we found no prejudice, we characterized the delay as “seemingly dilatory conduct.” 58 Pa. Commonwealth Ct. at 398, 427 A.2d at 1263. Similarly, in Barrington, 58 Pa. Commonwealth Ct. 137, 427 A.2d 719 (1981) the delay we examined was between a 1975 conviction for bribery and disciplinary action by the Real
We noted in Fumo v. Insurance Department, 58 Pa. Commonwealth Ct. 392, 427 A.2d 1259 (1981) that
[t]he Department asserted that the delay was attributable to the inability of its limited staff to maintain an ongoing search of the relevant criminal court dockets to determine whether licensed agents have been convicted of crimes necessitating discipline. This situation has subsequently been alleviated through promulgation of a regulation requiring insurance agents and brokers to report actionable criminal convictions to the Department within, 10 business days. 31 Pa. Code §33.18 (bj.
Id. at 398-99, n.10, 427 A.2d at 1263, n.10'. In the ease at' bar, Weinberg faults the Board for its .failure to promulgate such a regulation. We, however, have, no authority to insist that the Board institute a reporting requirement.
In dabster, the delay involved was more than thirty years.
Our review in appeals of actions by the Board is controlled by Section 704 of the Administrative Agency Law, 2 Pa. C. S. §704 and is limited to a determination of whether constitutional rights were violated, an error of law was committed or the findings of fact are unsupported by substantial evidence. Id.
The Board found that “[t]he IBS agents with whom the Bespondent cooperated did not have any vivid recollection of the entire transaction, or the extent of the Bespondent’s cooperation when contacted prior to the hearing.”
Weinberg testified that the IRS agents with whom he cooperated indicated that they were grateful for his cooperation and would help him in any related matter which might come up. Weinberg was not prosecuted nor penalized by the IRS for arranging the bribe of Maher. We think he had reason to believe that the Board had also not acted against him because of his extensive cooperation with the authorities.