In re O.P.M. Leasing Services, Inc.

Mordecai Weissman founded O.P.M. Leasing Services, Inc. (OPM) (debtor) in 1970. OPM’s name was a source of controversy and speculation during the years it was in operation. Principals sometimes said the initials stood for “other people’s machines” because OPM was in the business of computer leasing. However, the initials really stood for “other people’s money,” referring to the company’s practice of relying almost exclusively on funds advanced by others to run its business. Weissman and Myron Goodman, Weissman’s brother-in-law and business partner, engaged in large-scale fraud and deception to create an illusion of success while OPM lost money at ever increasing rates. Through ignorance, poor judgment, and self-interest, many financiers, lawyers, bankers, and other businesspeople worked with Goodman and Weissman in various ways that perpetuated OPM’s corrupt business. The law firm of Singer, Hutner, Levine & Seeman, P.C. (Singer Hutner) was OPM’s outside general counsel from 1971 through September 1980 and did not fully sever its relationship with OPM until December 1980. Andrew Reinhard, an associate and later partner with Singer Hutner, brought OPM’s business to the firm. Singer Hutner closed dozens of fraudulent lease-financing transactions for OPM and received fees of approximately $7.9 million from OPM during the representation. Substantial evidence suggested that although Reinhard may have been unaware of OPM’s fraudulent activities at the outset of the representation, he eventually became a knowing participant. In June 1980, Goodman confessed certain prior fraudulent activities to a Singer Hutner partner, and the firm engaged outside counsel to advise of its ethical responsibilities. However, Singer Hutner continued to close fraudulent lease financings for OPM without verifying or investigating the facts relevant to the transactions, and Goodman continued to downplay the scale of OPM’s fraudulent activities to the attorneys. With the approval of their ethics counsel, Singer Hutner voted to resign as OPM’s counsel in September 1980 but misleadingly characterized the resignation as a mutual decision between the firm and OPM. Singer Hutner’s ethics counsel advised that the firm could not ethically warn OPM’s successor counsel of the risk that Goodman would use them to help finance fraudulent transactions. OPM’s successor counsel then unwittingly helped close six additional fraudulent lease financings.