Out Of Whack

A suspension without possibility of reinstatement for 30 days was imposed by the Iowa Supreme Court for an attorney’s trust accounting deficiencies.

The problems came to light during an audit but were not cured.

Then, there were bounced checks that led to a follow-up audit.

The investigation

The auditor examined the documents and found the funds in [the attorney’s] trust account were nearly $8000 short. In several instances, [her] records showed clients were credited for funds received, but no corresponding deposits were made to the trust account. Exacerbating the problem, [she] failed to maintain records mandated by court rules and neglected her obligation to perform monthly trust account reconciliations. Further, the auditor determined [she] had commingled personal funds—derived from an operating loan from her father—with client funds in the trust account. [She] explained that she considered the clients’ funds she didn’t deposit in the trust account “as funds being removed from” that operating loan. However, she completely depleted the loaned funds and withdrew client funds before earning them. In April 2013, [she] deposited funds to bring the trust account into balance.

 The court considered mitigating factors but determined that a period of suspension was appropriate

[The attorney’s] trust account was, in her words, “out of whack” for months. Her trust account deficiencies were not an isolated incident, and therefore, her conduct is more in line with cases in which we have imposed a suspension.

A prior reprimand was treated as an aggravating factor. (Mike Frisch)