The Benefits Of An Employee Dishonesty Insurance Program
The New Jersey Supreme Court adopted the proposed sanction of its Disciplinary Review Board and imposed a three-month suspension of an attorney who had twice given misplaced trust to an employee.
From the DRB report
In September 1985, respondent hired Roxanne Elliott as his legal secretary. Her responsibilities included opening bank statements for respondent’s review, preparing checks for him to sign, and preparing daily bank deposits. Respondent held various attorney trust accounts…
He failed to monitor her work and
Unbeknownst to respondent, between December 14, 2010 and June 23, 2011, Elliott issued five trust account checks payable to herself, forged respondent’s signature on them, and deposited them in her personal PNC account. Due to respondent’s failure to perform monthly three-way reconciliations of his trust accounts, Elliott was able to steal a total of $103,080. Elliott issued four of those checks between December 2010 and February 2011…
He discovered at least part of the situation sometime before April 2011 and made a loan to the employee
Following Elliott’s thefts, she continued to work for respondent. They agreed on a payment plan for the $8,837 loan, in the form of a $25 deduction from every paycheck, beginning May 5
He made false statements to the Bar about the loan and
Elliott continued to forge respondent’s signature on trust account checks even after respondent discovered her defalcations and his agreement to lend her more than $8,000.
She was able to steal over $100,000 but in the end
All of the misappropriated funds were replaced through a combination of bank credits, recovery of stolen funds from Elliott’s PNC bank account, respondent’s personal funds, and proceeds from an employee dishonesty insurance policy respondent had obtained, as part of his business insurance.
As to sanction
Respondent received an admonition in 2010 and a reprimand in 2012. The common thread in both cases was respondent’s unilateral decisions, veiled in the cloak of strategy, not to take certain actions, which he failed to communicate to the clients. Respondent’s prior misconduct, when considered in the context of the facts of this matter, suggests that, for unknown reasons, he is not employing the requisite level of diligence in his practice of law, thus neglecting both his clients and the management of his law firm, thereby placing client funds at risk. The totality of his misconduct, thus, when considered in the light of his ethics history, mandates the imposition of a term of suspension.
NorthJersey.com reported on the conviction of the employee. (Mike Frisch)