Failure To Supervise Draws Suspension

A 30-day suspension has been imposed by the Louisiana Supreme Court of an attorney for failure to supervise an embezzling non-attorney employee

In February 2008, the ODC received a disciplinary complaint filed by Larry and Jeri Lynn Carroll. Mr. Carroll had retained respondent to represent him in a claim for damages arising out of an automobile accident. When the claim was settled in June 2007, respondent withheld funds from the settlement proceeds to pay Mr. Carroll’s medical providers; however, according to the complaint, the Carrolls received collection notices months later indicating that the medical providers had not been paid.

In March 2008, respondent filed a response to the Carrolls’ complaint. He indicated that he was unaware of the problems the Carrolls were having with the medical providers, but that having been informed of such, his secretary conducted an investigation and learned the original checks issued in June 2007 had never been negotiated. Respondent further indicated that replacement checks were issued to the medical providers and that his secretary later confirmed with each medical provider that the replacement check had been received.

Two months later, in May 2008, after respondent was served with a subpoena in connection with the ODC’s investigation of the complaint filed by the Carrolls, respondent’s secretary, Lisa McBride, confessed that she had been embezzling money from him since 2003. She also acknowledged that she had deposited client funds into respondent’s operating account, including Mr. Carroll’s settlement funds. Respondent terminated Ms. McBride’s employment and reported her to the police. Although Ms. McBride was unsure exactly how much money she had taken from respondent over the years, she was able to obtain a loan from a relative and made restitution to respondent in the amount of $39,312.35. Respondent directed that these funds be disbursed as follows: 1) $9,700 to be deposited into his operating account, and 2) $10,000 to be deposited into his personal bank account. The remaining funds, $19,612.35, were deposited into respondent’s client trust account. At the time of these disbursements in mid-May 2008, respondent had not obtained any audit of either his operating or client trust accounts

 The court

we conclude respondent’s negligent supervision of his nonlawyer assistant was coupled with a willful indifference toward his obligation to make prompt restitution to remedy the consequences of his negligence. We conclude such conduct warrants an actual period of suspension. Accordingly, we will suspend respondent from the practice of law for thirty days, followed by a one-year period of probation, during which he shall be required to attend the Louisiana State Bar Association’s Trust Accounting School and undergo quarterly trust account audits under the conditions set forth in the disciplinary board’s recommendation.

Practice pointer: Sometimes the sanction in a bar discipline case is driven as much by factors – here, indifference to restitution – that the attorney has the ability to control. (Mike Frisch)