McKernan v. Bureau of Prof'l & Occupational Affairs

261 A.3d 570

William L. MCKERNAN III, Petitioner

v.BUREAU OF PROFESSIONAL AND OCCUPATIONAL AFFAIRS, STATE BOARD OF ACCOUNTANCY, Respondent

No. 596 C.D. 2020

Commonwealth Court of Pennsylvania.

Argued April 12, 2021

Decided August 11, 2021

James J. Kutz, Harrisburg, for Petitioner.

Ronald K. Rouse, Counsel, Harrisburg, for Respondent.

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE ELLEN CEISLER, Judge, HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge.¹

OPINION BY JUDGE LEAVITT

William L. McKernan III petitions for review of an adjudication of the Bureau of Professional and Occupational Affairs, State Board of Accountancy (Accountancy Board), which denied McKernan's petition for probationary reinstatement of his license as a certified public accountant. McKernan asserts that the Accountancy Board erred and abused its discretion by focusing on his decade-old criminal conviction and disregarding the unrebutted evidence of his rehabilitation and present good moral character. For the reasons set forth below, we vacate the Accountancy Board's adjudication and remand the matter for further proceedings consistent with this opinion.

Background

On April 24, 1991, McKernan was licensed as a certified public accountant (CPA) by the Accountancy Board. On September 22, 2010, McKernan pled guilty to charges of theft by deception for incidents that occurred in 2007 and 2008. The first involved the theft of $1,719,550.25 from a corporate client of his accounting firm, and the second involved the theft of approximately $57,000 from a Little League team for which McKernan served as volunteer treasurer. On June 1, 2011, McKernan was sentenced to a term of imprisonment of 11½ to 23 months, with eligibility for work release after 60 days of confinement, followed by 5 years of probation to be served consecutively with parole, if granted. The sentencing order required 100 hours of community service; payment of $500 in fines and costs; and restitution of $750,000 to the insurance company that had covered part of the corporate client's loss. Prior to sentencing, McKernan had fully repaid the Little League team and the corporate client for the loss not covered by its insurance policy.

On August 18, 2011, McKernan and the Bureau of Professional and Occupational Affairs (Bureau) entered into a Consent Agreement. Therein, McKernan admitted that his criminal conduct implicated several provisions of the CPA Law,² which authorized the suspension or revocation of his CPA license.³ The Consent Agreement provided that McKernan would permanently surrender his CPA license and not seek a modification of the Consent Agreement without the concurrence of the Bureau's Prosecution Division. By order of September 20, 2011, the Accountancy Board approved the Consent Agreement.

By 2012, McKernan had served his minimum sentence, which included work release, and was paroled. Thereafter, he was granted early termination of his probation. He also satisfied the restitution and community service requirements of his sentence.

On February 20, 2018, McKernan sought the concurrence of the Bureau's Prosecution Division to a modification of the Consent Agreement to allow the reinstatement of his CPA license. The Prosecution Division denied his request. On June 19, 2019, McKernan filed a reinstatement petition requesting the Accountancy Board to convene a "good moral character" hearing and to reinstate his CPA license in a probationary status. The Prosecution Division did not oppose the hearing but objected to the reinstatement of McKernan's license.

On November 19, 2019, the Accountancy Board held a hearing on McKernan's reinstatement petition. McKernan presented the testimony of four witnesses, all of whom testified to their knowledge of McKernan's prior criminal conduct, his alcohol abuse and treatment, his rehabilitation and his present good moral character.

The first witness, William R. Sasso, Esquire, the chairman of Stradley Ronon Stevens & Young, LLP, testified that he has known McKernan for several decades, in both a professional and personal capacity. Sasso explained that he has previously served on the State Board of Law Examiners and been appointed to serve on other governmental and quasi-governmental agencies. He acknowledged the Accountancy Board's responsibility to the profession and the public as well as the seriousness of McKernan's criminal conduct. Accordingly, Sasso explained that he took his testimony on behalf of McKernan very seriously.

Sasso attested to McKernan's remorse for his criminal conduct and to his rehabilitation. He explained that McKernan is sober, counsels people with alcohol addiction, and volunteers in his community. Sasso testified that there is "[n]o doubt in [his] mind" that McKernan is "of sound, moral character[.]" Notes of Testimony, 11/19/2019, at 16-17 (N.T. __); Reproduced Record at 81a-82a (R.R. __). Additionally, Sasso explained that he has worked with McKernan "on a number of business issues[,]" and that he has "sound judgment in that area as well." N.T. 17; R.R. 82a. Sasso acknowledged that McKernan's criminal offenses were "a serious matter." N.T. 19; R.R. 84a. Sasso testified that he believes that McKernan is truly remorseful and has been rehabilitated. Given the progress he has witnessed in McKernan, Sasso stated that he has "become convinced" that "the right thing to do is to reinstate [McKernan]." N.T. 16; R.R. 81a.

Next to testify was Gregory A. Porter, president of the Daniel Foundation, which provides "civic and spiritual renewal in the Greater Phoenixville area." N.T. 32; R.R. 97a. Porter met and counseled McKernan while his criminal charges were pending. Porter continues to counsel him on a monthly basis. Porter testified that McKernan has "paid his dues" and "demonstrated a level of trust that is incredibly significant and even unusual." N.T. 35; R.R. 100a. Porter commented on McKernan's unrelenting honesty, observing that he is "unguarded and probably, in many cases, his worst critic." N.T. 34; R.R. 99a. Porter asked McKernan to become the accountant for the Daniel Foundation and that McKernan's work "has been exemplary." N.T. 41; R.R. 106a. Porter attested to McKernan's present good moral character, as demonstrated by his actions.

The third witness, Melissa Weber, Esquire, an attorney with Elliott Greenleaf and a former prosecutor, testified to McKernan's current fitness. She has known McKernan for more than 10 years. Weber first came to know McKernan when she was campaigning for state representative and McKernan was a township supervisor. She described McKernan as a different person at that point in time because of his alcoholism; he presented himself as a "big man on campus" type. N.T. 45; R.R. 110a.

Thereafter, Weber became a part of McKernan's criminal defense team. In that capacity, Weber got to know McKernan well. She explained that McKernan's decision to self-report his wrongdoings to his corporate client and to the Little League team, as well his restitution to them in full, were significant factors in his sentencing. Within a year of being placed on parole, McKernan was put on nonsupervisory probation, which means that "he would call in once a month to a preset number and have to push prompts along the way to confirm that he is compliant." N.T. 50; R.R. 115a. Weber believed that McKernan's continued work with several charitable organizations was not "done for any agenda other than a personal desire to do it[.]" N.T. 52; R.R. 117a. Weber testified that the sentencing court acknowledged McKernan's accomplishments and, thus, granted early termination of his probation.

Over the years, Weber has come to know McKernan as a friend. She explained that McKernan has stopped drinking alcohol and "has never gone back." N.T. 48-49; R.R. 113a-14a. Notwithstanding the publication of the criminal charges in the newspaper, family issues, and the impact of his actions on his accounting firm, McKernan has maintained his sobriety. Weber testified that McKernan possesses good "moral character and respect for the license of CPA." N.T. 54; R.R. 119a. She stated that McKernan would be an able practitioner and could serve the profession by mentoring young CPAs about the job and its stresses. Weber explained that she gave her testimony a lot of consideration, having served on the Pennsylvania Disciplinary Board. She testified that those "with professional licenses do have [to hold themselves to a] higher standard." N.T. 54; R.R. 119a.

The fourth witness, William L. McKernan, Jr., McKernan's father, is a licensed CPA. He testified that he has worked with his son since 1994 and was painfully and fully familiar with his son's criminal conduct. He testified that when his son came to him and confessed, he was "shocked beyond belief" and "angry." N.T. 67; R.R. 132a. He did not know his son was an alcoholic. Since that time, his son has not had another drink. McKernan, Jr. testified that his son understands now that his wrongdoing impacted his family, the accounting firm and the profession.

McKernan, Jr. testified that he assisted his son with the restitution, as have other family members and his son's friends. He testified that McKernan has been paying him back monthly and has never missed a payment.

McKernan, Jr. described his son as punctual and an able accountant who produces good work. McKernan, Jr. testified that he believes his son has the requisite good moral character for reinstatement of his license. He testified that he was willing to serve as "the designated mentor, proctor, [and] reporter to [an] agent of the Board." N.T. 71; R.R. 136a. It is his hope that his son will take over the practice.

In a written statement, Michael Irvine, a principal and chief executive officer at M.F. Irvine, also attested to McKernan's rehabilitation and present good moral character. Irvine has known McKernan since 1992. He engaged McKernan to provide professional services to his company, including preparing his company's tax returns. Irvine...