California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - NOVEMBER 2001
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California Bar Journal

The State Bar of California


REGULARS

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Front Page - November 2001
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News / News Briefs
Two new judges named to bar court; Stovitz to preside
New protections for consumers
Court approves disclosure of some private disciplines
Board member Erica Yew named to Santa Clara bench
40 receive Foundation scholarships
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Trials Digest
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Opinion
From the President - Intentional UPL should be a felony
International law in a post-Sept. 11 world
Lawyers' response: First, do no harm
Delicate balance between liberty and security
Con artists single out immigrants
Letters to the Editor
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MCLE Self-Study
Restructuring a bankrupt global company
Self-Assessment Test
MCLE Calendar of Events
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You Need to Know
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Public Comment
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Discipline
Ethics Byte - New decision may subject lawyers to suits
Trust fund scam leads to summary disbarment
Attorney Discipline

DISCIPLINE

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Trust fund scam leads to summary disbarment
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A 72-year-old Beverly Hills lawyer who created a wild scam involving German royalty and a nonexistent $100 million trust was summarily disbarred July 21, 2001, following a felony grand theft conviction. In July 1995, a jury found DANIEL N. BUSBY [#28022] guilty of scamming a woman he offered to help recoup a large amount of money she lost in the stock market.

In 1988, Busby told her he was the trustee of the Augsburg Settlement of 1773, a $100 million trust connected to the Habsburg royal family of West Germany. He assured the woman her investment was safe because it was backed by royalty.

Busby and the woman became romantically involved, and she gave him a total of $168,000 to invest in the Augsburg Settlement. She was told she would receive 20 percent interest when the investment matured in one year.

She did not receive any payment, and was told there had been a delay in funding. Busby said he would pay the principal and interest in April 1989, but when the time came, the woman was unable to find Busby - he had moved out of his home and disconnected the phone. He later contacted her, saying there were additional delays and she would be repaid in August.

In October, the woman received a letter from Michael Maximilian Habsburg Papirnik - a descendant of the royal family -  acknowledging the terms of her investment. A second letter the following month assured her everything was fine.

Dr. Otto Van Habsburg, head of the West German family, later told the woman, "As far as I'm informed, the whole trust never existed," and said the person calling himself Papirnik had no right to the family name.

At trial, Papirnik was proven a fabrication, a combination of historical figures. The district attorney's office also confirmed the Habsburgs no longer had a trust; all of their property had been seized in 1918.

Busby spent $140,000 of the woman's "investment." At trial, he claimed he had met Papirnik around 1984 and was named trustee of the Augsburg Settlement. He testified he handled the trust's transactions in the United States and spoke with Papirnik "almost daily." He said the woman lost the money in a risky but legitimate investment to buy and sell gold bullion, and that he made no misrepresentations to her. He said he felt no guilt about the woman's loss because she knew the risks, had an attorney and had solicited him to make the invest-ment.

After his conviction, Busby was incarcerated at a minimum security facility at Folsom Prison for six months, where he did general office work.  He was transferred to Chino and released in September 1997, completing one year of parole.

Aggravating factors included bad faith and dishonesty, lack of remorse, and failure to make restitution.

In mitigation, Busby practiced for nearly 38 years with no discipline, had positive character witnesses and served prison time for his crime.  

Busby worked a short stint at the Los Angeles County district attorney's office in the late 1950s. He handled criminal and business law and ran unsuccessfully for a seat on the bench in Beverly Hills.

Around 1970, saying he was disenchanted with how the criminal justice system took advantage of defendants, Busby moved to Mexico City, where he designed clothing and sold backgammon sets. He returned to California in 1973, where he resumed his law practice, then quit again and bought five Wendy's restaurants. In recent years, he has handled two friends' financial affairs and designed expensive evening bags for women.