Audit Leads To Suspension

The Iowa Supreme Court has suspended an attorney for at least six months and until further order for ethics violations that were discovered when several escrow account checks bounced.

When the auditors came

Morris told the auditors he had no employees and revealed he personally performed all banking functions for the trust account. The auditors discovered Morris kept no general ledger for the account and no separate ledger evidencing for each client the source of all funds deposited, the names of all persons for whom the funds were held, or the record of charges and withdrawals pertaining to each client. Morris produced for the auditors some trust account bank statements in their original envelopes, a loose-leaf checkbook with a check stub register for the account covering the period from January 2009 through May 3, 2010, a handwritten list of clients, and two pages of “trust account sheets” generated by Morris for the auditors.

Morris, who was cordial and helpful in his interactions with the auditors, produced no documentary evidence for the auditors tending to show he kept running trust balances for individual clients or that he regularly reconciled the trust account. The bank records he made available to the auditors evidenced numerous deposits and disbursements that could not be attributed to specific clients and documented several account overdrafts for the years 2008 and 2009.

The audit revealed a shortfall of over $11,000.

There was mitigating evidence. The attorney practiced law with his brother, whose sickness and death greatly concerned him, as well as his mother’s health issues. (Mike Frisch)