                                                     SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

                 In the Matter of Frank J. Cozzarelli, An Attorney at Law (D-151-13) (074742)

Argued October 21, 2014 -- Remanded October 30, 2014 -- Reargued November 10, 2015 -- Decided May 2,
2016

PER CURIAM

         In this attorney disciplinary matter, the Court considers the appropriate level of discipline for respondent
Frank J. Cozzarelli, who committed misconduct involving the misappropriation of client and escrow funds.

         Since 1998, respondent had been intermittently under investigation by the United States Attorney’s Office
for income tax evasion. In connection with his role as treasurer of a fraudulent investment fund, respondent was
indicted on September 21, 2004, after which he suffered a breakdown. On September 26, he was voluntarily
admitted to an inpatient psychiatric unit, from which he was discharged on October 4, the day of his arraignment. In
January 2005, respondent pled guilty to income tax evasion and was sentenced to four months in jail, followed by
four months of house arrest and a probationary term. He was incarcerated from June through October 2005.

          Shortly before the indictment, on August 2, 2004, Office of Attorney Ethics (OAE) Auditor Mimi Lakind
notified respondent that a random audit would occur at his office at the end of that month, encompassing a two-year
period prior to the audit date. The audit ultimately commenced in November 2004, after respondent had been
released from inpatient care and while he remained under psychiatric care. According to Lakind, respondent
maintained an active practice, including many real estate transactions per month and an active chancery docket. She
asserted that respondent initially did not provide her with any recordkeeping documents, other than some records
prepared by a family member who was a certified public accountant. In light of the criminal matter, Lakind
postponed the audit. Although she requested additional documents, she never received them. Respondent was
temporarily suspended in February 2005 following his guilty plea, at which time Lakind proceeded to reconstruct
respondent’s records based on subpoenaed bank records and other documents.

          A demand audit ultimately resumed on December 18, 2008, at which time respondent presented Lakind
with “new records” he had prepared on an Excel spreadsheet. According to Lakind, these materials were not
reflective of the records of which she was aware in November 2004. Significantly, Lakind explained that, in
addition to respondent’s recordkeeping issues, she had uncovered “a systematic and continuing invasion of client
trust funds for respondent’s law office and personal expenditures.” Respondent was charged with several counts of
knowing misappropriation for: (1) misappropriating $112,728.93 in client funds for personal purposes; (2)
improperly transferring funds from one client’s trust account to the account of another unrelated client; and (3)
repeated occurrences of borrowing against trust accounts for personal purposes and to replenish other accounts.

          At the disciplinary hearing, respondent, citing In re Jacob, 95 N.J. 132 (1984), maintained that, in light of
his debilitating depression, he should be absolved of improprieties or granted mitigation in terms of the quantum of
discipline imposed. Respondent’s psychiatrist testified that, at the time of the audit, respondent was not functioning
efficiently and was not competent to manage the trust funds. The OAE’s expert disagreed, asserting that
respondent’s mental state did not support a finding of legal insanity, or any of the other conditions that would satisfy
the Jacob standard. The special master rejected respondent’s Jacob defense, concluded that he knowingly
misappropriated client funds, and recommended disbarment. Following a de novo review, the DRB concurred that
the proofs were sufficient to establish knowing misappropriation on four of the nine charges. Like the special
master, the DRB rejected respondent’s Jacob defense, concluding that his major depression did not satisfy the
requisite standard for legal insanity and noting that he continued to function both personally and professionally
during the time he misappropriated funds. Consequently, the DRB determined that respondent should be disbarred.

        The Court ordered respondent to show cause on the disbarment recommendation and, following argument
on the matter, remanded to the DRB for a more full analysis of the evidence submitted in connection with
respondent’s Jacob defense. The Court retained jurisdiction.

        On April 20, 2015, the DRB reaffirmed its recommendation that respondent be disbarred for the knowing
misappropriation of escrow and client funds. The DRB explained that the Jacob standard has been reiterated and
applied by the Court, in In re Greenberg, 155 N.J. 138, 156-59 (1998), and other matters, functioning as the
equivalent of the M’Naghten standard, the standard for legal insanity under criminal law. The DRB further
explained that the Court has often referred to the Jacob standard as the inability to distinguish between right and
wrong or to understand the nature and quality of one’s acts, and not as an impairment of judgment. With respect to
respondent’s misconduct, the DRB noted that there was considerable evidence demonstrating that he had not
suffered a loss of competency or will such that his knowing misconduct could be excused. Specifically, he handled
numerous professional and personal matters while managing to conceal the federal criminal investigation from his
wife. The DRB explained that depression does not satisfy the Jacob standard unless it deprived the attorney of the
knowledge that he was taking funds that did not belong to him and that he was not authorized to take.

HELD: There is clear and convincing evidence the respondent knowingly misappropriated client funds, and that his
mental illness did not cause him to suffer a loss of competency, comprehension or will that excused his misconduct
when it occurred. Respondent is not entitled to mitigation and shall be disbarred.

1. In New Jersey, disbarment is permanent. R. 1:20-15A(a)(1). An attorney who knowingly misappropriates funds
from a client is subject to disbarment without any practical prospect of consideration of mitigating factors or
restoration upon a showing of reformation. In re Wilson, 81 N.J. 451 (1979). Misappropriating attorneys claiming
to be afflicted with identifiable disorders, such as mental illness, have not swayed the Court from imposing
disbarment. (pp. 18-19)

2. In Jacob, supra, the Court rejected the argument that an attorney’s medical condition exculpated his
misappropriations, emphasizing that it was looking for a causal connection between the condition and the financial
misdeed. The Court further stated that the attorney had not demonstrated that he had suffered a loss of competency,
comprehension, or will of a magnitude that could excuse his knowing egregious misconduct. Although these
comments reference a standard that traces language used in diminished capacity cases, several subsequent cases in
which a so-called Jacob defense was advanced collapsed the standard into shorthand in which it is described
essentially as an ability to discern right from wrong. In Greenberg, supra, the Court rejected an attorney’s asserted
defense that his depression caused an impairment of judgment that should allow him to avoid disbarment for stealing
law firm funds. The Court explained that the attorney failed to demonstrate that he could not appreciate the
difference between right and wrong or understand the nature and quality of his acts. (pp. 19-22)

3. The DRB applied Jacob, Greenberg, and other cases to the matter at hand, concluding that the Jacob standard
requires either an inability to distinguish between right and wrong or to understand the nature and quality of one’s
acts. Those two expressions of understanding can be likened to the standard for legal insanity, under the M’Naghten
test, and the standard for diminished legal responsibility under principles of diminished capacity or the statutory
defense of intoxication. While the Jacob standard may not be a model of clarity, it nevertheless expresses the
Court’s willingness to consider defenses that would negate the mental state to act purposely. Thus, a mental illness
that impairs the mind and deprives the attorney of the ability to act purposely or knowingly, or to appreciate the
nature and quality of the act he was doing, or to distinguish between right and wrong, will serve as a defense to
attorney misconduct and should be considered in connection with excusing wrongful conduct by an attorney, or
when mitigation of a disciplinary penalty is appropriate to consider under New Jersey’s disciplinary jurisprudence.
(pp. 22-23)

4. Here, the experts agreed that respondent did not have a mental illness that met any of the aforesaid three defenses
that negate the mental state to act knowingly. While the Court agrees with respondent that the Jacob standard is not
restricted to making a showing that is equivalent to the M’Naghten standard for legal insanity under criminal law, it
rejects respondent’s contention that the DRB’s decision is undermined by its focus on the legal insanity standard.
The DRB correctly concluded that the OAE has proven knowing misappropriation by clear and convincing
evidence, and the Court concludes that respondent’s misdeeds were not aberrational. Respondent has not proven a
causal connection between his mental illness and his acts of misappropriation, and the Court is not persuaded that he
is entitled to mitigation of the normal penalty of disbarment due to his severe depression. On this record, as
amplified by the supplemental decision of the DRB, respondent committed knowing misappropriation.
Consequently, respondent is disbarred. (pp. 23-26)

         So Ordered.

       JUSTICES LaVECCHIA, ALBIN, and PATTERSON, and JUDGES CUFF and FUENTES (both
temporarily assigned) join in this PER CURIAM opinion. CHIEF JUSTICE RABNER and JUSTICES
FERNANDEZ-VINA and SOLOMON did not participate.



                                                          2
                                      SUPREME COURT OF NEW JERSEY
                                       D-151 September Term 2013
                                                 074742


IN THE MATTER OF

FRANK J. COZZARELLI,

An Attorney at Law



         Argued October 21, 2014 – Remanded October
         30, 2014 - Reargued November 10, 2015 –
         Decided May 2, 2016

         On an Order to show cause why respondent
         should not be disbarred or otherwise
         disciplined.

         Maureen G. Bauman, Deputy Ethics Counsel,
         argued the cause on behalf of the Office of
         Attorney Ethics.

         S.M. Chris Franzblau argued the cause for
         respondent (Franzblau Dratch, attorneys; Mr.
         Franzblau, Stephen N. Dratch and Frank J.
         Cozzarelli, on the briefs).


PER CURIAM

    Respondent, Frank J. Cozzarelli, was recommended for

disbarment in a decision by the Disciplinary Review Board (DRB).

On the return date of an Order to Show Cause issued by this

Court as to why he should not be disbarred for the knowing

misappropriation of client and escrow funds, respondent

contended that he presented mental illness evidence that had not

received proper consideration by the DRB, under In re Jacob, 95

                                1
N.J. 132 (1984).   Because we were concerned about respondent’s

assertion that his Jacob defense was not properly considered and

addressed by the DRB, we extended these already lengthy

proceedings by remanding the matter to the DRB for fuller

examination and explanation, including but not requiring the

possibility of further evidentiary proceedings.     We retained

jurisdiction.

    This matter is presently back before us following the DRB’s

issuance of a supplemental decision that, in greater detail,

explains its adherence to its recommendation that respondent

should be disbarred.   We have had re-briefing and re-argument

following issuance of the DRB’s supplemental decision.

    Before this Court, respondent continues to maintain that

the DRB has misapplied Jacob.   Respondent argues that he was

entitled to have his Jacob defense of mental illness considered

in connection with mitigation of penalty as well as for purposes

of providing a defense to the charged misconduct.     For the

reasons expressed herein, we conclude that respondent’s

arguments have received full and fair consideration.

    Based on the proofs, we agree with the DRB that there is

clear and convincing evidence of knowing misappropriation of

client funds, that respondent’s mental illness of depression did

not cause him to suffer a loss of competency, comprehension or

will that excused the acts of misappropriation when they


                                 2
occurred, and that he is not entitled to mitigation of our

almost-invariable penalty of disbarment for such egregious

misconduct based on the depression he undoubtedly suffered in

connection with his federal investigation, indictment, plea, and

sentence.   We therefore accept the DRB’s recommendations and

hold that respondent shall be disbarred based on the proof of

knowing misappropriation of client and escrow funds.

                               I.

    In light of the extended history to this matter, we will

summarize the salient procedural and factual aspects to this

misappropriation-based disciplinary action.

    Following a full hearing culminating in a recommendation of

disbarment by an appointed special master, the DRB unanimously

recommended respondent’s disbarment for the knowing

misappropriation of client and escrow funds charged in counts

three, four, eight, and nine of the Office of Attorney Ethics’s

(OAE) complaint, and for violation of RPC 8.4(c) (conduct

involving dishonesty, fraud, deceit or misrepresentation) and

RPC 8.4(d) (conduct that is prejudicial to the administration of

justice).   The charges arose out of audit irregularities,

including trust account shortages that were uncovered during a

random audit, which turned into a demand audit, conducted by the

OAE between November 22, 2004 and December 18, 2008.   The

lengthy duration of that audit needs to be placed in context.


                                 3
     On August 2, 2004, OAE Auditor Mimi Lakind notified

respondent that a random audit would occur at his office at the

end of that month and would encompass a two-year period prior to

the audit date.     The audit was rescheduled twice at respondent’s

request.   The audit did not commence until November 2004 and

took a long time to bring to conclusion.1

     According to respondent, when the audit began in November

2004, he was “not functioning very well” and was under

psychiatric care.     In fact, when respondent learned that an

attorney ethics audit would take place, he was weeks away from

being indicted by the United States Attorney’s Office for income

tax evasion, for which he had been intermittently under

investigation from 1998 until his indictment on September 21,

2004 in connection with his role as treasurer of a fraudulent

investment fund.



1 In the midst of responding to the OAE auditor’s requests for
documents and information in connection with the audit,
respondent was temporarily suspended on September 24, 2005, and
the audit was indefinitely postponed. That suspension from the
practice of law was due to respondent’s entry of a guilty plea
to one count of income tax evasion, in violation of 26 U.S.C. §
7201. In re Cozzarelli, 182 N.J. 387 (2005). On March 9, 2006,
well before the audit was brought to conclusion, the thirteen-
month temporary suspension from active practice that respondent
had served was determined to constitute sufficient attorney
discipline for the federal tax evasion offense, In re
Cozzarelli, 186 N.J. 156 (2006); thereafter, respondent was
reinstated to practice in January 2007. See In re Cozzarelli,
189 N.J. 209 (2007). He has remained in active status
throughout these proceedings.


                                   4
     Although not squarely germane to this matter, a brief

history on what has been referred to by the DRB as “the Mallet

Investment” is necessary.   The special master report described

the Mallet Investment venture succinctly as follows:

          Through various persons, Respondent was
          contacted by an Edward Mallet, with whom
          Respondent developed a friendship. Mr. Mallet
          involved the Respondent in the development of
          schemes to create an Investment venture, and
          to that end ultimately [provided] Respondent
          with more than $10,000,000.00 ostensibly in
          order to obtain a fixed place of business for
          an “investment company” and to establish
          banking connections in the United States and
          Europe to attract investors and establish a
          “hedge fund.”   Other parties to the scheme
          were introduced by Mr. Mallet, and it is
          reasonable to infer that Mr. Mallet intended,
          and did in fact use the Respondent as a “fall
          guy” by convincing Respondent to accept and
          handle monies, the source of which has not
          been established, and to transfer those funds
          to persons designated by Mr. Mallet, in some
          way to cause their disappearance.

Although the special master’s report noted that it was “clear . .

. that Respondent had neither the knowledge [n]or experience to

have concocted whatever scheme Mr. Mallet was engaged in,”

respondent’s income tax evasion conviction arose from his

failure to pay taxes on profits generated by those investments.

     Based on the record as presented by respondent and as

supplemented by his medical expert, by September 2004,

respondent had known of the potential indictment for several

months, was in a state of anxiety, and ultimately suffered a



                                5
breakdown when he was informed that a federal grand jury had

indicted him.    During the days spanning September 21 through

September 26, 2004, respondent formulated a suicide plan and

absented himself from family and friends to execute it,

travelling in and around New Jersey, stopping in New York City,

Atlantic City, and Philadelphia.       Eventually he abandoned his

suicide plan, reconnected with family and an attorney, and

determined to face the criminal charges.       Respondent had not

told his family about the potential criminal charges beforehand.

     With familial, legal, and medical assistance,2 on September

26, 2004, respondent was voluntarily admitted to an inpatient

psychiatric unit in Valley Hospital.      He was discharged on

October 4, 2004.   On the day of his discharge, respondent was

arraigned in the United States District Court for the District

of New Jersey.   He pleaded guilty in January 2005 to income tax

evasion and was sentenced to four months in jail, followed by

four months of house arrest and a probationary term.      He was

incarcerated from June through October 2005.3


2 Respondent’s admitting and treating psychiatrist, Dr. Steven S.
Simring, testified in this matter as a fact witness and as
respondent’s expert.

3 In sentencing respondent, the federal district court commented
on the number of supportive letters that were submitted on
respondent’s behalf and recounted respondent’s professional
success and contributions to the community. The court expressed
hope that respondent would be restored to the practice of law
where he could continue to contribute. Those comments were

                                   6
    The audit that OAE Auditor Lakind attempted to perform in

November 2004 was therefore conducted after respondent had been

released from inpatient care and while he remained under

psychiatric care.   According to respondent, he had counsel for

some period during audit preparations but was unable to pay for

ongoing representation.   Assistance came from family members and

others who helped to secure documents that had been requested by

the OAE in advance of the audit.       In Lakind’s testimony at the

hearing before the special master, she said that respondent

initially did not provide her with any recordkeeping documents

other than some records prepared by a family member who was a

certified public accountant; those did not detail whose money

was whose among the various clients and accounts for which

respondent was responsible.   According to Lakind, respondent had

maintained an active practice that involved many real estate




relied upon by respondent in this matter and we give them
favorable acknowledgment. However, they were expressed based on
knowledge of only the federal conviction for tax evasion, which
more likely than not results in suspensions from practice, not
disbarment. See, e.g., In re Rakov, 155 N.J. 593 (1998)
(imposing two-year suspension for attempted income tax
evasion); In re Gillespie, 124 N.J. 81 (1991) (three-year
suspension for aiding and assisting in presentation of false
corporate tax returns); In re Nedick, 122 N.J. 96 (1991)
(imposing two-year suspension for tax evasion mitigated by
cooperation with federal authorities); cf. In re Turco, 66 N.J.
50 (1974) (imposing disbarment for tax fraud). The
misappropriation charges were not yet in the picture as the
audit had been postponed while respondent addressed his federal
criminal charges.

                                   7
transactions per month and included an active chancery docket.

We also note that respondent held numerous court appointments as

a fiduciary.4   Lakind testified that she also was provided with a

disc that included a voluminous list purporting to identify all

of the files in respondent’s office.

     Concerned about the level of stress that respondent was

exhibiting during the November 2004 audit proceeding, Lakind

informed respondent that the audit would be postponed so that

respondent could focus on his federal criminal matter.   On

December 10, 2004, respondent was notified that the audit would

resume in February 2005.   Lakind testified that she requested

additional records but never received them.   Respondent was

temporarily suspended by February 2005 as a result of the guilty

plea in federal district court.   Lakind testified that she

proceeded to reconstruct respondent’s records, preparing

spreadsheets based on subpoenaed bank records and documents

received from succeeding trustees on respondent’s former

fiduciary accounts, information listed on checks, and other

documents.   Lakind added that, following respondent’s


4 In connection with respondent’s inability to provide Lakind
with any recordkeeping documents in November 2004, we note that
shortly after his arraignment in federal court, respondent was
removed from his many court-appointed fiduciary positions and
was faced with the obligation to turn over and account for the
contents of funds that he had held as a fiduciary. The absence
of respondent’s recordkeeping files is sorely troubling and is
discussed later.

                                  8
reinstatement to the practice of law, she received a Quickbooks

form from respondent’s accountant, Samuel Fisher, which

substantially agreed with her reconstructed figures.   Respondent

himself informed Lakind that he could not produce any additional

records due to the disarray of his professional belongings while

he was incarcerated.5

     When a demand audit resumed on the substantially later date

of December 18, 2008, respondent presented Lakind with “new

records” he had prepared on an Excel spreadsheet; however,

according to Lakind, those materials were not reflective of the

records she was aware of in November 2004.

     More problematic for respondent, Lakind testified that in

addition to the recordkeeping issues uncovered during the audit,

she uncovered “a systematic and continuing invasion of client

trust funds for respondent’s law office and personal

expenditures.”   Those patterns, she testified, revealed

shortages in his accounts.   According to Lakind’s testimony,

          beginning    with    his   own    accountant’s
          reconciliation as of December 31st, 2003,
          there were shortages in the account. And then
          I found that money from the fiduciary accounts
          went into the Trust Account and were used to
          pay other clients.

5 Respondent testified that his brother, who was his landlord,
took back his office space to lease it to a new tenant.
Respondent’s belongings were removed to accomplish the re-
leasing. Although respondent had packed and stored his records
in an onsite trailer, he claimed the records became disarrayed
or destroyed following the demolition work that took place.

                                 9
              The   critical   time  came   when  Mr.
         Cozzarelli had to turn over a number of
         fiduciary accounts to other attorneys or
         successor trustees or administrators, and so
         the amounts that were held in the Trust
         Account had to be paid out and there was
         insufficient money to pay them.

              And I found that just before the payment
         of each matter deposits were made from
         personal funds of Respondent equal to clear
         the checks. In all that time, and with all
         those shortages, not a single check, not one,
         was presented on insufficient funds and either
         paid or dishonored by the bank, none.

    When asked if she would have expected no check to bounce if

respondent’s records were in such poor condition that he could

not keep track of financial matters, Lakind explained that she

would have expected the opposite of what she in fact found.

              That’s usually the best indication where
         an attorney has no idea what’s in there, will
         write a check thinking he’s probably got the
         money in there.      That’s why we have the
         overdraft notification program, it’s exactly
         why it was put into effect, so that where an
         attorney, either through negligence or through
         design, does not have enough money and a check
         is presented, whether it’s paid or not, even
         if it’s paid, we are notified by the bank that
         a   Trust  Account    was  presented   against
         insufficient funds and we immediately contact
         the attorney and we ask for proof of what
         happened and why that happened.

              And in all this time I never found a
         single Trust Account bank statement in which
         there was an overdraft balance or [that a
         check written for an amount in excess of the
         account’s balance was returned]. . . . There
         was always sufficient funds at the moment a
         check was presented for the check to clear.


                               10
    Following the conclusion of the demand audit, on December

18, 2008, respondent was charged with several counts of knowing

misappropriation for:   (1) misappropriation of $112,728.93 in

client funds for personal purposes; (2) improper transfer of

funds from one client’s trust account to the account of another

unrelated client; and (3) repeated occurrences of borrowing

against trust accounts for personal purposes, including for fees

he believed he was owed and to replenish other trust accounts.

    At the disciplinary hearing, respondent maintained that,

because he suffered from the debilitating mental illness of

severe depression, he should be absolved of improprieties or at

the least granted mitigation in terms of the quantum of

discipline to be imposed, citing Jacob, supra, 95 N.J. 132.      Dr.

Simring, a board-certified psychiatrist, testified on

respondent’s behalf as an expert and as his treating physician.

Dr. Simring opined that respondent was not functioning

efficiently or rationally and was not competent to manage the

trust funds at the time of the audit.   The OAE’s expert, board-

certified psychiatrist Daniel Paul Greenfield, M.D., testified

that, during 2003-2005, respondent’s mental state did not

support a finding of legal insanity, or any of the other

conditions that would satisfy the Jacob standard (mentioning

also intoxication or diminished capacity as among those other

conditions that could provide a form of Jacob defense but that


                                11
were inapplicable to the present matter).   Dr. Greenfield

expressed his opinion that respondent’s depression was

situational and that he was functional at the time when he

engaged in the unethical conduct that formed the basis for the

disciplinary charges against him.

    The special master found that respondent knowingly

misappropriated client funds.   He rejected respondent’s Jacob

defense, finding that there was no medical evidence that

respondent suffered from a mental illness sufficient to excuse

his misappropriating conduct.   As noted earlier, the special

master’s report recommended respondent’s disbarment as the only

appropriate discipline for his misappropriation of client funds.

    Following a de novo review, the DRB determined that the

evidence clearly and convincingly established that respondent

was guilty of knowing misappropriation, although not on all

counts.   It found the proofs sufficient, under the clear and

convincing standard, on four out of nine of the charges.

    The DRB’s August 8, 2014, decision recounts the basis for

its findings in full but, in sum, the DRB found as follows.

With respect to count three, involving the Arthur R. Haberman

Irrevocable Trust, the DRB concluded that the proofs established

that respondent knowingly misappropriated $100,000 from that

trust on November 3, 2004, to cover a shortage in another trust

that respondent had been managing until he was removed,


                                12
following his arraignment, from his court-appointed position of

fiscal agent and replaced by another attorney.     Similarly, with

respect to count four, involving the Barrillas-to-Gencarelli

real estate transaction, the DRB found that respondent failed to

maintain the necessary funds in his trust account following the

closing, having used $100,000 of the funds to reimburse the

Haberman trust on February, 11, 2005.     With respect to count

eight, involving the Boyko Trust, the DRB determined that the

evidence showed that respondent was not authorized to transfer,

on May 5, 2004, $50,000 from the trust to his business account

to pay legal fees in his criminal case.     Finally, on count nine

involving the Sciarrillo estate, the DRB determined that

respondent provided no evidence to support his claim that the

estate owed him $200,000, which he took from the estate between

September 27, 2004 and November 1, 2005.

    The DRB also rejected respondent’s Jacob defense,

concluding that respondent’s diagnosis of major depression did

not satisfy the requisite standard for legal insanity to obtain

relief under Jacob.   To the DRB it was significant that, despite

his depression, respondent continued to function personally and

professionally and that, during that time, he systematically

engaged in “lapping,” or taking one client’s funds to pay

obligations owed to another, while ensuring that the funds were

replenished when it came time to repay the first client.


                                13
Consequently, the DRB determined that respondent should be

disbarred.

    We issued an Order to Show Cause on the disbarment

recommendation and, following argument on the matter, remanded

to the DRB

         with instruction that the Board more fully
         assess the evidence submitted in connection
         with respondent’s proffered defense pursuant
         to In re Jacob, 95 N.J. 132 (1984), and provide
         a detailed explanation of whether or not
         respondent has met the standard set forth in
         Jacob. The Disciplinary Review Board retains
         the authority to remand the matter to a
         special ethics master if it deems such a
         course warranted.

We also retained jurisdiction.

    In a decision dated April 20, 2015, the DRB reaffirmed its

recommendation that respondent be disbarred for the knowing

misappropriation of escrow and client funds.   The DRB addressed

in detail its reasons for rejecting respondent’s argument that,

under Jacob, he should be excused or have his penalty mitigated

due to his mental illness.

    First, the DRB addressed the Jacob standard.   The DRB

quoted the standard first articulated in Jacob and noted that it

has been reiterated and applied by this Court, in In re

Greenberg, 155 N.J. 138, 156-59 (1998), and other matters,




                                 14
functioning as the equivalent of “the M’Naghten standard.”6   The

DRB decision recited numerous occasions on which this Court has

“referred to the Jacob standard as the inability to distinguish

between right and wrong or to understand the nature and quality

of one’s acts.”   The DRB commented that neither the Jacob

standard nor the M’Naghten standard “is satisfied by a

demonstration of an ‘impairment of judgment.’”

    Second, the DRB detailed why the evidence offered by

respondent failed the Jacob test as the DRB understood it.

Critically important, that analysis bears repeating in

full:

              [N]either respondent nor [Dr.] Simring,
         his expert, offered any evidence to support
         the conclusion that, at the time of the
         knowing     misappropriations,      respondent
         “suffered a loss of competency, comprehension
         or will of a magnitude that could excuse or
         mitigate egregious misconduct that was clearly
         knowing, volitional and purposeful.” Jacob,
         supra, 95 N.J. at 137. In respondent’s only
         instance of knowing misappropriation that
         preceded the September 2004 indictment, no
         evidence established that, at the time (May 5,
         2004), he was anything more than depressed.
         Respondent claimed that he was “in such a deep
         depression that [he] couldn’t figure out what
         was going on.”      We note that there is
         considerable evidence to the contrary.      He

6 M’Naghten’s Case, 8 Eng. Rep. 718 (H.L. 1843); see also State
v. Breakiron, 108 N.J. 591, 616 (1987) (“[T]he insanity defense
as modified in New Jersey is strictly limited to the M’Naghten
principle of whether or not the defendant was either unable to
know the nature and quality of the act he was doing . . . or, if
he did know it, that he did not know that what he was doing was
wrong.”).

                               15
         handled quite a few personal and professional
         matters, during that time, and he was able to
         conduct himself in such a fashion that his
         wife had no suspicion that he was under a
         federal criminal investigation. Moreover, the
         inability to figure out “what is going on” is
         a far cry from not being able to distinguish
         between right and wrong.

              As   stated    previously,    depression,
         “however severe,” is insufficient to satisfy
         the Jacob standard, unless the condition
         deprived the attorney of the knowledge that he
         was taking funds that did not belong to him
         and that he was not authorized to do so.
         Greenberg, supra, 155 N.J. at 158-59. No such
         showing was established in this case.

         . . . .

              Finally,    we   note   that,    despite
         respondent’s insistence that his conduct was
         an aberration and that he has since reformed,
         the record shows otherwise. As we found, as
         late as September 2008, respondent gave the
         OAE a ledger that he had prepared for [a]
         trust, after the fact.   That ledger falsely
         showed that the $50,000 that respondent had
         paid to his lawyer in the federal criminal
         matter had gone to a beneficiary of the trust
         instead.    Thus, nearly four years after
         respondent’s so-called breakdown, three years
         after his release from incarceration for
         having committed a felony, and despite his
         successful treatment with [Dr.] Simring,
         respondent was still engaging in dishonest
         conduct designed to conceal the fact that he
         deliberately and intentionally took monies
         that did not belong to him and used them to
         fund his defense in the federal criminal
         matter.

                             II.

    Respondent argues that the DRB’s analysis on remand

erroneously perpetuated an interpretation of the Jacob standard


                               16
that requires a showing that meets the criminal law standard for

the defense of legal insanity.     He maintains that Dr.

Greenfield, the OAE’s expert, applied only the M’Naghten

standard to assess respondent and opine on whether respondent

could avail himself of a Jacob excuse to knowing

misappropriation and disbarment.      On the other hand, respondent

maintains that his expert, Dr. Simring, opined on his mental

illness and reasons why his mental condition merited mitigating

consideration, which is also permitted under Jacob.        In that

regard, respondent argues that Dr. Simring’s opinion is

unopposed.

    The OAE argues that the DRB properly considered the mental

health circumstances that had been advanced by respondent and

correctly concluded that proof of knowing misappropriation was

demonstrated clearly and convincingly.     It emphasizes the timing

of the four incidents of misappropriation and that respondent’s

expert, Dr. Simring, does not contend that respondent could not

appreciate the wrongfulness of his actions at those times.       In

essence, the OAE maintains that respondent did not show

impairment at the time of those misappropriations that deprived

him of the ability to know that he was taking funds that did not

belong to him and that he was not authorized to do so.

    Moreover, in arguing against allowing mitigating effect to

be afforded to respondent in this disciplinary matter due to his


                                 17
diagnosis of severe depression by Dr. Simring, the OAE contends,

and the DRB concluded, that three of the misappropriations took

place after respondent had been discharged from the hospital,

was under Dr. Simring’s care and responding well to medication,

and was participating in the handling of his criminal matter.

Thus, the OAE maintains that respondent’s misdeeds were not

aberrational and, as further proof of that, adds one more

incident to the mix.   Four years after his hospitalization,

three years after his incarceration, and still while under Dr.

Simring’s care, respondent, according to the OAE, and as found

by the DRB, submitted false information in financial records to

hide evidence of misappropriation from another trust for which

respondent was responsible.

                                III.

    In this State, two rules in attorney misconduct matters are

applied, virtually without exception.    First, disbarment is

permanent.   R. 1:20-15A(a)(1); see also In re Breslin, 171 N.J.

235, 237 (2002) (noting that “in New Jersey disbarment

invariably is permanent”).    Second, an attorney who knowingly

misappropriates funds from a client is subject to disbarment, In

re Wilson, 81 N.J. 451, 453 (1979), without any practical

prospect of consideration of mitigating factors, id. at 457-60,

or restoration upon a showing of reformation, id. at 460 n.5

(noting that “research reveals only three orders of


                                 18
reinstatement following disbarment over the past hundred

years”); see also Greenberg, supra, 155 N.J. at 151 (“We accept

as an inevitable consequence of the application of th[e Wilson]

rule that rarely will an attorney evade disbarment in such

cases.”).

       Misappropriating attorneys claiming to be afflicted with

identifiable disorders, including mental illness or related

conditions, have not swayed the Court from imposing the grave

discipline of disbarment.    See Greenberg, supra, at 150, 157-58.

       In Jacob, supra, the Court considered, as part of the

defense to a knowing-misappropriation-of-client-funds case, a

medical report by the physician of the respondent that addressed

certain physical and mental health conditions, including

depression, suffered by the attorney.    95 N.J. at 134-35, 137.

The Court spoke sympathetically to the lawyer’s plight but

nevertheless rejected the argument that the medical evidence

served to “exculpate [the] misappropriations.”    Id. at 136.   The

Court explained that the medical proofs did not demonstrate that

the condition from which the respondent suffered “was an

exclusive or major cause of his ethical derelictions.”     Id. at

137.    The Court emphasized that it was looking for a

demonstration of a causal connection between the medical

condition and the financial misdeed.    Ibid.   The Court closed




                                 19
with the following restatement of its reasons for rejecting the

proffered defense:

         The report does not furnish any basis grounded
         in firmly established medical facts for a
         legal excuse or justification for respondent’s
         misappropriations.      There   has  been   no
         demonstration by competent medical proofs that
         respondent suffered a loss of competency,
         comprehension or will of a magnitude that
         could excuse egregious misconduct that was
         clearly knowing, volitional and purposeful.

         [Ibid.]

    Although the Court’s closing comments referred to legal

excuse or justification, and mentioned “loss of competency,

comprehension or will,” a standard that traces language used in

diminished capacity analyses, several subsequent cases in which

a so-called Jacob defense was advanced collapsed the standard

into shorthand in which it is described essentially as an

ability to discern right from wrong.   See In re Hein, 104 N.J.

297, 302 (1986); see also In re Romano, 104 N.J. 306, 311 (1986)

(concluding that “respondent has failed to demonstrate that a

disease of the mind rendered him unable to tell right from wrong

or to understand the nature and quality of his acts”).    The DRB

decision in this matter discusses subsequent cases that have

attempted to argue for mitigation of penalty based on “loss of

competency, comprehension or will” language that was used in

Hein, explaining that the language actually originated from

Jacob and requires loss of competency, comprehension or will of


                               20
a magnitude that would excuse conduct that is otherwise knowing

or purposeful.      (Citing In re Steinhoff, 114 N.J. 268, (1989)).

Most specifically, the Court in In re Roth, 140 N.J. 430, 448

(1995), addressed mental illness in the context of whether an

attorney lacked volitional capacity to perform his duties.         The

Court equated the loss of competency, comprehension or will as

requiring an inability to distinguish right from wrong and

concluded that the depression from which the respondent was

suffering did not suffice to excuse his conduct under that

standard.   Ibid.

    In another case, Greenberg, supra, 155 N.J. 138, our Court

was asked to consider whether depression caused the respondent

to suffer a substantial impairment of judgment that, when

combined with other mitigating factors, should permit the

attorney to avoid disbarment for stealing law firm funds.      In

rejecting the defense, our Court tied its rationale again to the

lawyer’s failure to demonstrate that “he was unable to

appreciate the difference between right and wrong or the nature

and quality of his acts.”      Id. at 157.   The lawyer’s mental

illness, although severe, did not eviscerate the lawyer’s

knowledge that he was taking the firm’s funds and that his firm

had not authorized the taking.      Id. at 158-59; see also In re

Tonzola, 162 N.J. 296, 307 (2000) (noting “the debilitating and

overpowering effects of respondent’s illnesses,” but


                                   21
acknowledging respondent’s expert’s opinion that respondent “may

have been aware” that clients’ funds were being

misappropriated).

    The DRB applied those cases to the matter at hand and

concluded that the Jacob standard requires an inability to

distinguish between right and wrong or to understand the nature

and quality of one’s acts.   Those two expressions of

understanding can be likened to the standard for legal insanity,

under the M’Naghten test, and the standard for diminished legal

responsibility under principles of diminished capacity or the

statutory defense of intoxication.   See N.J.S.A. 2C:4-1

(insanity); see, e.g., State v. Worlock, 117 N.J. 596, 603

(1990) (“Directed at defendant’s ability to ‘know,’ the

M’Naghten test is essentially one of cognitive impairment.

Sometimes described as the ‘right and wrong’ test, its purpose

is to determine whether the defendant had sufficient mental

capacity to understand what he was doing when he committed the

crime.”); N.J.S.A. 2C:4-2 (diminished capacity); see, e.g.,

State v. Taylor, 387 N.J. Super. 55, 61-62 (App. Div. 2006)

(stating that, once affirmative defense of diminished capacity

is raised, State must prove beyond reasonable doubt that,

despite evidence of defendant’s mental disease or defect, she

nonetheless “knew” that she was committing the relevant

offense); N.J.S.A. 2C:2-8 (intoxication); see, e.g., State v.


                                22
Mauricio, 117 N.J. 402, 418 (1990) (stating that “self-induced

intoxication is a defense to a purposeful or knowing crime”).

The Jacob standard may not be a model of clarity, but the point

to Jacob is that it expressed the Court’s willingness to

consider defenses that would negate the mental state to act

purposely.   A mental illness that impairs the mind and deprives

the attorney of the ability to act purposely or knowingly, or to

appreciate the nature and quality of the act he was doing, or to

distinguish between right and wrong, will serve as a defense to

attorney misconduct.   The aforesaid defenses are ones that can

and should be considered in connection with excusing wrongful

conduct by an attorney, or when mitigation of the disciplinary

penalty is appropriate to consider under our disciplinary

jurisprudence addressing the quantum of punishment.

    Indeed, Dr. Greenfield noted the same defenses in his

testimony, identifying all three as potential bases for avoiding

legal responsibility under the attorney disciplinary system.     In

his testimony, Dr. Greenfield did not limit his understanding of

a Jacob defense to legal insanity, as respondent argues,

although respondent’s ability to distinguish right from wrong

was the only one of the three possibilities that could apply to

respondent’s mental condition and behavior.   Dr. Greenfield

stated that point more than once, and even Dr. Simring testified

that respondent did not meet any of those three criteria for


                                23
non-responsibility.    There was no expert disagreement on the

fact that respondent did not have a mental illness that met any

of the aforesaid three defenses that negate the mental state to

act knowingly.

    Respondent persists in maintaining that the DRB and the OAE

mistakenly limit the Jacob standard to presentation of a

successful insanity defense in a criminal matter and that

nothing more will be considered.       While we agree that the Jacob

standard is not restricted to making a showing that is

equivalent to the M’Naghten standard for legal insanity under

criminal law, we reject respondent’s contention that the DRB’s

decision in this matter is undermined by its focus on the legal

insanity standard as that was the only one of the three possible

defenses that pertained in respondent’s situation.

    The DRB properly analyzed the record presented by

respondent and his expert as well as the testimony provided by

the OAE’s expert.     In our view, the DRB correctly concluded that

the OAE has proven knowing misappropriation by clear and

convincing evidence.    Respondent did not demonstrate legal

excuse for his misappropriations.       Moreover, in light of the

pattern and timing of respondent’s misappropriations and

concealment well after having received care and ongoing

treatment, we conclude that his misdeeds were not aberrational.

This Court has previously noted the importance of establishing a


                                  24
causal connection between mental illness and the acts of

misappropriation.     See Jacob, supra, 95 N.J. at 137.    Respondent

has not proven an excusing causal connection.

       Nor are we persuaded that he is entitled to mitigation of

the normal penalty of disbarment for his knowing, volitional,

and purposeful acts of misappropriation of client and escrow

funds.     We reach that conclusion, notwithstanding Dr. Simring’s

testimony urging that mitigation consideration be given to

respondent due to his severe depression.       In our disciplinary

cases, we have not allowed mitigation from disbarment in

misappropriation cases.     This case does not present reason for

us to start here.     In Wilson, supra, we explicitly stated that

“maintenance of public confidence in this Court and in the bar

as a whole requires the strictest discipline in misappropriation

cases.     That confidence is so important that mitigating factors

will rarely override the requirement of disbarment.”       81 N.J. at

461.     We also have been unswayed by the assertion that a

respondent is unlikely to continue to misappropriate funds in

the future.     “[T]he unlikelihood of subsequent misappropriation

[is] irrelevant in these cases.”       Id. at 460 n. 4.   This Court

has not suggested that a low risk of re-offense is, in itself,

“sufficient to warrant lesser discipline,” because it is “almost

universally present in these matters.”       Ibid.




                                  25
    We are satisfied that, on this record, as amplified by the

supplemental decision of the DRB, respondent committed knowing

misappropriation.   We adopt the recommendation of the DRB that

respondent be disbarred.

                               IV.

    In the end, notwithstanding his being allowed to practice

after his tax evasion conviction, respondent’s misappropriation

has been proven by clear and convincing evidence.   The penalty

for that misconduct is disbarment.


     JUSTICES LaVECCHIA, ALBIN, and PATTERSON, and JUDGES CUFF
and FUENTES (both temporarily assigned) join in this PER CURIAM
opinion. CHIEF JUSTICE RABNER and JUSTICES FERNANDEZ-VINA and
SOLOMON did not participate.




                                26
                SUPREME COURT OF NEW JERSEY

NO.     D-151                                 SEPTEMBER TERM 2013
APPLICATION FOR
                  Order to Show Cause Why Respondent Should
DISPOSITION
                Not be Disbarred or Otherwise Disciplined



IN THE MATTER OF

FRANK J. COZZARELLI,

An Attorney at Law




DECIDED                      May 2, 2016
OPINION BY                    Per Curiam
CONCURRING OPINION BY
DISSENTING OPINION BY


 CHECKLIST                                 DISBAR

 CHIEF JUSTICE RABNER                   -----------------
 JUSTICE LaVECCHIA                             X
 JUSTICE ALBIN                                 X
 JUSTICE PATTERSON                             X

 JUSTICE FERNANDEZ-VINA                 -----------------
 JUSTICE SOLOMON                        -----------------
 JUDGE CUFF (t/a)                              X

 JUDGE FUENTES (t/a)                           X


 TOTALS
                                               5
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