The Roads Allegedly Not Taken

The Illinois Administrator has filed charges alleging misconduct in a law firm partner’s reimbursements for expenses

Between at least January 15, 2015 and December 19, 2019 (when his partnership in the firm was terminated as a result of the events described in this complaint), Respondent was a partner in the Chicago office of the McDonnell Boehnen Hulbert & Berghoff LLP intellectual property law firm, where he was responsible for patent prosecution and due diligence matters. As part of the work he did for the firm and its clients, Respondent occasionally travelled from Chicago to other cities and towns, and he knew that the firm would reimburse him for the airfare, lodging, dining and other expenses that he legitimately incurred on those business-related trips.

Between at least January 15, 2015, and October 11, 2019, Respondent submitted to the firm requests for reimbursement for purported expenses that he claimed to have incurred while travelling on behalf of the firm or its clients. As discussed more specifically below, hundreds of those requests were false, in that Respondent knowingly submitted expense reimbursement requests in which he sought payment for hundreds of thousands of dollars in purported expenses that he knew he had not actually incurred.

The firm’s expense-reimbursement process required that attorneys submitting requests for reimbursement were to support their requests by attaching receipts (including, for example, for airfare, hotel bills and restaurants), then signing the form to verify both the accuracy of its contents and that the expenses for which they were seeking reimbursement had been incurred for business purposes. In connection with the scheme outlined below, Respondent bought airline tickets or made other transportation reservations, then canceled the original purchase and received a full or partial refund. Respondent kept the receipt for the original purchase or reservation, and submitted it to the firm as part of a request to be reimbursed for expenses he had not actually paid, and for trips he had not actually taken.

In 2015, Respondent submitted three requests that the firm reimburse him for purported expenses he falsely claimed to have incurred in making ten trips to Brookfield, Wisconsin, between January and November of that year. Respondent requested and received $1,171.67 in payment of purported expenses that he knew he had not actually paid.

In 2016, Respondent submitted at least 68 false requests that the firm reimburse him for purported expenses he claimed to have incurred in travelling to Toronto, Ontario; Columbus, Ohio; Brookfield, Wisconsin; Phoenix; Boston; Ft. Lauderdale; Wauconda, Illinois; St. Louis; Binghamton, New York; Newark, New Jersey; Los Angeles; Charlotte, North Carolina; Austin, Texas; West Lafayette, Indiana; Washington, DC; San Francisco; Rockford, Illinois; Oshkosh, Wisconsin; Miami; Dallas; Orange County, California; and Madison, Wisconsin between November 18, 2015 and December 15, 2016. In reality, Respondent had not taken those trips or paid the claimed expenses. Respondent requested and received $37,600.19 in payment of purported expenses that he knew he had not actually paid.

In 2017, Respondent submitted at least 116 false requests that the firm reimburse him for purported expenses he claimed to have incurred in travelling to Milwaukee, Madison, Appleton, Green Bay, Brookfield and Oshkosh, Wisconsin; Rockford, Cary and Vernon Hills, Illinois; Indianapolis, West Lafayette, South Bend and Ft. Wayne, Indiana; Ft. Lauderdale; Philadelphia; Newark; St. Louis; Seattle; San Francisco; Washington, DC; Raleigh, North Carolina; Boston; Miami; and Kalamazoo, Michigan between December 19, 2016 and December 22, 2017. In reality, Respondent had not taken those trips or paid the claimed expenses. Respondent requested and received $66,448.88 in payment of purported expenses that he knew he had not actually paid.

In 2018, Respondent submitted at least 104 false requests that the firm reimburse him for purported expenses that he claimed to have incurred in travelling to Indianapolis, West Lafayette and Ft. Wayne, Indiana; Vernon Hills, Illinois; Boston; Kalamazoo; Arlington, Virginia; Newark; Miami; St. Louis; Seattle; Washington, DC; Minneapolis-St. Paul, Minnesota; Los Angeles and Orange County, California; Denver; and Brookfield and Oshkosh, Wisconsin between November 26, 2017 and December 8, 2018. In reality, Respondent had not taken those trips or paid the claimed expenses. Respondent requested and received $82,836.95 in payment of purported expenses that he knew he had not actually paid.

In 2019, Respondent submitted at least 91 false requests that the firm reimburse him for purported expenses that he claimed to have incurred in travelling to New York; Vancouver, British Columbia; Houston; Dallas; St. Louis; Miami; Seattle; Boston; Atlanta; San Francisco, San Jose, Los Angeles and Orange County, California; Kalamazoo; Charleston, South Carolina; Minneapolis, Minnesota; Washington, DC; Crystal Lake, Illinois; and Milwaukee, Oshkosh and Brookfield, Wisconsin between December 7, 2018 and October 11, 2019. In reality, Respondent had not taken those trips or paid any of the claimed expenses. Respondent requested and received $91,807.46 in payment of purported expenses that he knew he had not actually paid.

Respondent attempted to remove from his clients’ bills (i.e., “write off”) the fraudulent charges that he originally identified as having related to client matters (as opposed to business development for the firm), but he was not entirely successful in doing so. In at least four instances, fraudulent travel charges totaling $4,624.96 were passed on to, and paid by, firm clients. After it discovered Respondent’s conduct, the firm reimbursed those clients.

In 2019, the firm conducted a review of Respondent’s claimed travel expenses. Following its review, it concluded that in addition to the false claims outlined above (for which it found that there was no evidence to show the trips had been taken, or evidence to show that they had not been taken), there were additional claimed expenses that could not be documented. The amount of those claimed expenses was $81,771.32, which, when combined with the $279,865.15 described above, brought the total of Respondent’s questioned expenses to $361,646.47. On November 27, 2019, Respondent paid the firm $100,000 as partial restitution. He later paid an additional $20,000 to the firm and forfeited his capital account and a portion of his monthly draw. On December 19, 2019, the firm’s other partners voted to terminate Respondent’s partnership in the firm.

(Mike Frisch)