The Perfect Secretary

The Pennsylvania Supreme Court has imposed a six-month suspension for an attorney’s failure to supervise a non-lawyer employee who stole entrusted estate funds.

The Disciplinary Board noted

In 2013, Respondent became aware that Ms. Hale had stolen $3,300 from the decedent estate assets of Anita Mains by drawing one check on the estate account on which she had forged Respondent’s signature. Ms. Mains was Respondent’s aunt and he served as executor for her estate. 

Respondent testified that “$3,300 was what my fee was going to be to the estate, so nobody lost any money except me.” Respondent admonished Ms. Hale not to take monies again and gave her a “second chance.” 

Respondent had Ms. Hale repay the estate “through [a reduction in] her wages and bonus” from her employment with Respondent. [citations to record omitted]

The duties and supervision did not change as a consequence. 

Thereafter, in an estate where Ms. Sandra Smith was appointed executrix

Ms. Hale began stealing funds from the Maurhoff estate account by drawing 20 checks, on 19 of which she had forged the signature of Ms. Smith, made payable to herself, and depositing the checks via an ATM to her personal account at PNC.

Thereafter, on approximately a monthly basis through May 19, 2016, Ms. Hale knowingly provided false estate account balances to Ms. Smith in an effort to conceal Ms. Hale’s thefts from the Maurhoff estate.

When Ms. Smith blew the whistle to Respondent, he told her that she was in error.

Nevertheless she persisted

On or about June 7, 2016, Ms. Smith communicated her allegations about the Maurhoff estate account to Detective William Miller of the Allegheny County District Attorney’s Office. 

Which led to more bad news

From approximately February 2015 through the end of June 2016, Respondent had failed to reconcile at least seven estate accounts, including the Maurhoff estate account, on a monthly basis.

He then learned that Ms. Hale had taken over $191,000 

Despite Respondent’s knowledge as of July 1, 2016 that Ms. Hale had stolen funds from several estates, Respondent did not immediately terminate Ms. Hale’s employment.

Jail for Hale

Neither Respondent nor Ms. Hale immediately used their own funds to reimburse the remaining seven estates for the thefts committed by Ms. Hale. Eventually, as part of Ms. Hale’s sentencing, she began making monthly restitution payments in the amount of $12.50. Ms. Smith on behalf of the Maurhoff estate filed a lawsuit against Respondent, which settled in mid-September 2020 for the sum of $92,500, with $12,500 paid by First Commonwealth Bank and $80,000 paid by Respondent’s liability insurance carrier.

The Pittsburgh Post-Gazette reported on the crimes.

She told authorities she “needed the money to help with the medical needs of her son residing in Georgia” and that her husband was laid off.

The board made additional findings concerning the mishandling of another estate that did not involve similar misconduct.

At the disciplinary hearing

Respondent testified at the disciplinary hearing that upon learning of Ms. Hale’s theft in July 2016, he felt surprised by her criminal conduct, as he had put a lot of trust in her and thought she was a “perfect” secretary. 

Respondent testified that he continued to employ Ms. Hale for two months after the estate thefts were discovered in July 2016 because he “was not literate on [Ms. Hale’s] computer at that – on a computer at that time, and there were a number of pressing matters that I had to get out for my clients.” 

Sanction

There is no dispute that despite Respondent’s knowledge that Ms. Hale had stolen funds, he continued to task Ms. Hale with the same level of responsibility and continued to allow her full access and control over multiple estate accounts, checkbooks and monthly statements. Inexplicably, despite his knowledge of Ms. Hale’s dishonest conduct, Respondent made no efforts to enhance supervision of her activities to ensure compliance with record-keeping responsibilities and prevent further thefts. Respondent’s dereliction of his ethical duties had very serious consequences, as Ms. Hale’s unfettered access allowed her to steal $191,026.99 from seven other estates following the theft from the Mains estate.

Mitigation

In mitigation, we consider Respondent’s lengthy legal career for more than four decades without the blemish of prior discipline. This is a compelling mitigating factor. Respondent’s character witnesses, two of whom are lawyers, testified that he has a good reputation in the community for integrity and honesty. Additionally, Respondent cooperated with the criminal investigation of Ms. Hale and Petitioner’s disciplinary investigation of his conduct. Respondent admitted the majority of Petitioner’s factual allegations. The record reflects that Respondent has made some reimbursement to the estates either directly or through his professional liability insurance carrier.

…suspension of six months is consistent with the sanctions imposed for similar misconduct and is appropriate to address Respondent’s serious failure to supervise his employee, while accounting for his blemish-free disciplinary record during a lengthy legal career and his cooperation with both the criminal investigation of the thefts and the disciplinary investigation of his conduct.

Editor’s note: This is the first Pennsylvania Board document that I can cut-and-paste. Makes telling a story much easier. Thanks! (Mike Frisch)