Better Not Call Slippin’ Johnny Cesaro Until You Check the List

By Scott St. Clair

The “lawyer with baggage” theme is a staple of TV crime dramas. The Law & Order franchise used it as a  plot twist a couple times – here and here – to juice up stories where bogus legal credentials threatened convictions. And the current hit series Better Call Saul has strip mall lawyer protagonist Jimmy McGill aka Slippin’ Jimmy aka Saul Goodman suffering a suspension of his law license for engaging in off-center and dubious shenanigans against his brother.

So it’s hardly surprising that New Jersey politics, always looking to sink to new depths, has gotten into the act with its own slippin’ character, LD-26 Assembly hopeful and current Morris County Freeholder John “Slippin’ Johnny” Cesaro.

You see, it turns out that ol’ Slippin’ Johnny ran afoul of the rules and became “administratively ineligible” to practice law after he failed to comply with state bar association reporting requirements having to do with the Interest on Lawyer Trust Accounts program. As one report described it:

Cesaro was listed as administratively ineligible due to non-compliance with the IOLTA program, a non-profit program that helps disabled and low-income people resolve civil legal matters.

Slippin’ Johnny’s name first appeared on the IOLTA Ineligible List on October 21, 2016. According to Mary Waldman, the newly appointed executive director of the IOLTA Fund of the Bar of New Jersey, attorneys in the state are notified of their filing obligations in December, but those who fail to comply don’t have their names placed on the list until October of the following year, 10 months later. He remained on the list for seven months, not rectifying the situation until just recently.

Waldman said there are close to 90,000 attorneys in New Jersey. The most recent IOLTA Ineligible List had approximately 1,300 names, or 1.45 percent of the total, one of which was Slippin’ Johnny’s who was, per the list, originally admitted to practice in 2001.

It’s not like annual registration and IOLTA reporting requirements are rocket science, especially for someone who was admitted to the bar almost an entire generation ago.  So what was it about Slippin’ Johnny that made him…slip?

Media reports appear to have Slippin’ Johnny talking out of both sides of his mouth on whether he did or did not file his paper work in a timely manner. One quoted him as saying he did – “’This was a clerical error on my part,’ said Cesaro. ‘I send my paperwork in every year, and I sent them in this year,’” – while another has him saying he didn’t – “John Cesaro told Parsippany Focus he registers every year but he apparently failed to do so last year.”

How slippin’ is that, Johnny?

There’s enough slip sliddin’ away already in Trenton, so should Slippin’ Johnny slip down the slippery slope to sloppy legislative details? After all, the devil is always in them, and it’s a pretty significant detail that Slippin’ Johnny botched.   

But what exactly does it mean to be “administratively ineligible”? Admittedly, it’s a far cry from being disbarred or even suspended for an infraction of the rules of ethics. But it does make an attorney who’s on that list legally unable to practice law.

“Administratively ineligible” is defined by the state bar as:

“The attorney is not currently eligible to practice law in New Jersey for one or more reasons, including failure to pay the annual attorney assessment to the New Jersey Lawyers’ Fund for Client Protection, failure to register with IOLTA or maintain IOLTA accounts, or otherwise failing to meet the requirements of Rule 1:21-1(a).Administrative ineligibility is not the result of discipline, but attorneys who are administratively ineligible are not allowed to practice law in New Jersey.” (emphasis added)

In other words, if you don’t comply with the IOLTA reporting requirements, you may not pass Go, you may not offer legal advice, you may not collect fees, you may not practice law. If you continue to practice law while ineligible for whatever reason, the state bar association can pile on additional sanctions, as it has done to other attorneys in the past.

Ineligible by any other name – disbarred, suspended or administratively -- is still ineligible. Again, this ain’t rocket science. 

Yet for months Slippin’ Johnny did practice law, which arguably also means he violated the legal canons of ethics for the state bar association, which state:

“RPC 5.5 Lawyers Not Admitted to the Bar of This State and the Lawful Practice of Law

(a) A lawyer shall not:

(1) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction…”

And he did so as a prosecutor or public defender for several townships. Elected officials in jurisdictions for which he provided legal services have expressed concerns over the consequences of Slippin’ Johnny’s ineligibility on criminal and other matters he might have handled for them as well as cases that were strictly within his own private law practice. It just gets curiouser and curiouser.

A call to the state’s Office of Attorney Ethics to ascertain the full ethical ramifications of Slippin’ Johnny’s bungling of his paperwork resulting in being placed on the Administratively Ineligible list had not been returned as of late Thursday, June 1.

For someone who promotes himself on the Morris County Freeholder’s website as a strong proponent of transparency, when it comes to his eligibility to practice law it looks like Slippin’ Johnny has been as transparent as mud.

According to reports, Slippin’ Johnny squared himself away with the state bar association so his name was recently removed from the Administratively Ineligible list. That removal, however, is not retroactive – whatever legal work he did between the deadline for filing his paperwork and his removal from the list he did while ineligible to practice law.

Hank Lyon shouldn't talk about debt and taxes

We like Hank Lyon and wish him well.  Hank is an ideological conservative.  But it is his back story -- how he achieved public office, how he has maintained office, and how he seeks to advance himself up the ladder of public office -- that makes us uneasy.

It's a story of debt... and taxes.

Everyone remembers how Hank Lyon won a seat on the Morris County Freeholder Board.  A late infusion of cash from a corporation controlled by his father -- an infusion allowed because of an election law loophole that says if a candidate still lives at home with his parents, their money is treated as if it was the candidate's own money.

D. Use of Personal FundsUse of a candidate’s personal funds on behalf of his or her campaign must be deposited into the campaign depository and must be reported as either contributions or loans to the campaign in the same manner as all other contributions or loans. If the candidate intends to be reimbursed fully or partially for personal funds used on behalf of his or her campaign, then the funds must be reported both as a loan and as an outstanding obligation to the campaign if still outstanding at the end of the reporting period. Once a candidate’s personal funds are reported as contributions, the funds cannot be later characterized as loans and be repaid to the candidate. There is no limit to the amount of personal funds a candidate may contribute or lend to his or her own campaign (except for publicly funded gubernatorial candidates). See Gubernatorial Public Financing Program Manual for more information.  Also, a corporation, of which one hundred percent of the stock is owned by the candidate, or by the candidate’s spouse, child, parent, or sibling residing in the candidate’s household, may make contributions without limit to a candidate committee established by that candidate, or to a joint candidates committee established by that candidate.

That infusion of cash is improperly reported.  A judge overturns a close election, followed by a lawsuit, and another judge who reinstates the election results. 

Lyon's father was his Freeholder campaign's treasurer and its principal financier.  The lawyer who won the case for him was an alumnus of the Brett Schundler for Governor campaign and a movement conservative.  They tried to screw him:

Lawyer seeks $162,000 from Morris County Freeholder Hank Lyon

Morris County Freeholder William “Hank” Lyon has been accused of owing his former lawyer $162,000 in unpaid legal bills while Lyon also is battling with the state over alleged campaign violations.

“What a worm,”  said attorney Sean Connelly about his former client, Lyon. “We never expected to be in this position. We won precisely how we said we would win.”

Lyon, a Montville resident, did not return several calls for comment and an email to his freeholder address.

Connelly and the law firm of Barry, McTiernan and Wedinger of Edison represented Lyon during a nine-month court battle that ended up with Lyon winning the freeholder seat.

Lyon had won the 2011 Republican primary by four votes over Freeholder Margaret Nordstrom of Washington Township.  Nordstrom sued and won, gaining her seat back.

Lyon appealed the ruling and a state appeals court ruled in his favor in February 2012 and removed Nordstrom from the position. Lyon later won the freeholder post at a special election in November 2012.

Connelly said that after Lyon refused mediation and other offers to settle, the firm finally filed the suiton June 13 in Superior Court in Middlesex County against Lyon and his father, Robert A. Lyon, both of Montville, and their organization, “Lyon for Conservative Freeholder.” Connelly said Lyon has asked the court to dismiss the lawsuit.

Connelly said that before the court action, he had told Lyon that the lawsuit would be very costly.

“They said they were going to fund this to the end,” Connelly said.

The legal effort included extensive court representations and $18,000 for transcripts.

“We filed motions upon motions upon motions,” Connelly said. “It tied up my practice for six months.”

Connelly said his firm has offered several discounts on the outstanding legal bills.  “They kept ignoring us,” Connelly said. “We offered them great terms to pay over time.”

Connelly also said he filed the lawsuit in Middlesex County in an effort to limit publicity in Morris County.

“I don’t want to embarrass him,” he said. “I want to get paid.”

Connelly said the freeholder avoided being served with the lawsuit summons, forcing him to hire a professional to serve him at Lyon’s freeholder office.

Connelly said he also named Lyon’s father, Robert, in the lawsuit because the elder Lyon initially had agreed to pay the legal bills.

Connelly said he believes Lyon and his family have significant assets, including real estate holdings and restaurants.

Lyon’s income includes $24,375 a year as a freeholder. He also works with his father in the family’s business, which owns four restaurants, including Qdoba Mexican Grill restaurants and Maggie Moo’s ice cream parlors.

Election Violations

The N.J. Election Law Enforcement Commission also has accused Lyon of four violations of campaign finance laws during the 2011 Republican primary. Each violation could result in a maximum $6,800 fine.

The same alleged violations were cited by Superior Court Assignment Judge Thomas Weisenbeck when he ruled against Lyon and in favor of Nordstrom.

The commission names Lyon and his father who was the campaign treasurer.

One alleged violation involves a $16,000 loan made to the campaign a week before the primary but not reported until July 8. The state says that because the contribution was more than $1,200, it should have been reported within 48 hours.

Another alleged violation occurred when Lyon and his father certified the information on the loan and campaign report was correct but that they changed it in a subsequent report. Initially, Lyons reported that he had made the loan but it was later changed to identify Robert Lyon as the contributor, the state said.

Additionally, the state claims the information about the contribution was submitted after the June 27 deadline.

Further, the complaint says that $16,795 in expenditures were listed on July 8 but were due on June 27.

(Editor Phil Garber, December 11, 2013, newjerseyhills.com)

The Lyon family operates a group of interconnected corporate entities out of the same office and same post office box they share with Hank Lyon's political campaign -- Post Office Box 193, 20 Indian Hill Road, Towaco, New Jersey.

We know this because a number of these corporate entities have filed for bankruptcy or have liens or judgments against them or owe taxes.

While serving as an elected Freeholder, at least three corporate entities operating from the same office and post office box as Hank Lyon's political campaign have filed for bankruptcy.  These are 275 Prospect Street Associates, LLC (Case #15-16683); High Prospects, LLC (Case #15-16684); and Zero Barnegat, LLC (Case #16-25213).  The creditors in the first bankruptcy cases included the following:

On the Zero Barnegat bankruptcy, the creditors included:

This is all very troubling for the career of such a young conservative.  And especially because his campaign has only grown more indebted to a corporate entity within this interconnected group.  Hank Lyon's corporate indebtedness jumped between October 15, 2013, and October 15, 2016:

Note the address of Imperial Management Company.  It is 275 Prospect Street in East Orange.  This is the property managed by another Lyon corporate entity, 275 Prospect Street Associates, the company that had to file for bankruptcy and owed debt to taxpayers and residents.  The principalsof this corporate entity are Hank Lyon's parents:

In addition to bankruptcy, 275 Prospect Street Associates, LLC, has only recently emerged from a state suspension:

There are two Lyon family controlled corporations that go by the name "Imperial Management" -- one is a corporation, the other is an LLC.  The corporation -- Imperial Management, Inc. --  is listed as the entity owed the debt by Hank Lyon's campaign.  Unfortunately for Lyon, the family corporation that his campaign is in debt to is currently under suspension by the state.

As for the other Imperial Management Company owned by the Lyon family, it has recently emerged from a suspension by the state:

This is an unholy mess and until Freeholder Lyon can sort it out and extricate his campaign from it, he has no business running for higher office.  Trying to move up the political ladder, with a campaign so deeply in debt to dodgy corporations who are in debt as well, is just crazy.   It is an open invitation to a well-financed Democrat, backed up by a free-spending gubernatorial candidate and super-PACs loaded with cash. 

There is also the matter of ideology to be cleared-up.  How can one claim to be a "conservative" when he is existentially wrapped around such a convoluted mess of debt, bankruptcy, and fiscal irresponsibility?  If you cannot keep from being suspended by the state or fined by NJELEC or having your rents garnished, then how can you hope to address the budget of the State of New Jersey?