Twin Cities attorney Benjamin Houge has been suspended from practicing law for two years for helping a client engage in fraud and knowingly offering false evidence while representing him, the Minnesota Supreme Court has ruled.
The court acted on a petition for disciplinary action recommended last year by the director of the state Office of Lawyers Professional Responsibility, a Supreme Court agency that handles complaints of unprofessional conduct against Minnesota lawyers. Houge, 60, who lives in Stillwater and has his own practice, could not be reached for comment Tuesday. Court documents said he had argued that his conduct warranted only a reprimand.
The ruling doesn't identify the client. However, other court documents for cases handled by Houge make it clear it is Thomas von Behren, who had been convicted of bank fraud and theft by swindle in connection with buying and refinancing foreclosed properties before Houge began representing him in 2000.
In 2002, the client began working for Houge as an independent contractor researching foreclosed properties. The arrangement was later given as a reason the client's probation was revoked because it involved working in the real estate business.
In 2005 Houge was notified of complaints that the Lawyers Professional Responsibility Board had received accusing him of professional misconduct. The disciplinary hearing didn't begin until 2008, partly because of several actions by Houge to delay the proceedings, the court ruling said.
In recommending the suspension, the hearing referee concluded that Houge engaged in a "pattern of misconduct." Improprieties included employing the client to work in real estate in violation of court orders, submitting false information about the employment arrangement in court, and allowing the client to make false statements about it in court.
"We likewise conclude that, by facilitating [the client's] probation violation, Houge caused harm both to the public and the legal profession," the Supreme Court ruling said.
The ruling comes about a year after Houge was targeted by federal investigators for helping another client in a mortgage fraud scheme at the Sexton condominium project in downtown Minneapolis.
In an affidavit filed in U.S. District Court in April 2008, IRS agents said Brett Thielen, the Sexton's majority development partner, flipped mortgages and laundered the proceeds by having Houge, his lawyer, wire funds to a lawyer in Australia. The money was then wired back to Thielen and others in the mortgage fraud.
The U.S. Attorney's office has declined to say whether Thielen or Houge will be charged in connection with the scheme.
Susan Feyder • 612-673-1723
