Misplaced Trust
The Virginia State Bar Disciplinary Board imposed a 60-month suspension of an attorney with a 56 year spotless record
Mr. Shapiro was licensed to practice law in Virginia in 1968. He has practiced law in the Commonwealth of Virginia for approximately 56 years entirely in good standing and without any prior disciplinary record. At all relevant times, he has been licensed to practice law in Virginia. For those 56 years, Mr. Shapiro worked for law firms of varying sizes but had never previously administered a law firm trust account. In 2019, at approximately 76 years of age, he began to practice law as a solo practitioner.
In 2019, Respondent hired Amy Padgett to be his paralegal and office administrator and delegated responsibility for maintaining all of his firm’s bank accounts to her. Ms. Padgett had multiple personal references but no experience working in a law office prior to being hired by Respondent. From the time Respondent began practicing as a solo practitioner in 2019 until March of 2023, Ms. Padgett was the only employee of his law office.
During the COVID pandemic, because of his medical history, Mr. Shapiro was required to avoid in-person interaction as much as possible. During this time, prior to his awareness of Ms. Padgett’s actions, he made the decision that he would retire within two years.
Respondent did not make reasonable efforts to put measures in place to ensure that Ms. Padgett’s conduct was compatible with the Virginia Rules of Professional Conduct.
The delegation led to a notice of insufficient funds to the Bar
At that time, Respondent learned that KMG is an entity known as Kiss My Grass that is/was owned in whole or in part by Ms. Padgett’s husband, Ty Padgett.
Despite being aware of all of these problems and irregularities in the Trust Account and Operating Account, Respondent took no action to either terminate Ms. Padgett’s employment or otherwise restrict her access to the Trust and Operating Accounts. He also did not contact First Citizens Bank to verify that client funds deposited in the Trust Account were safe and accounted for.
Respondent’s inaction, in light of these problems and irregularities with his Trust Account and Operating Account, led the VSB to file a Petition for Receivership of his law firm pursuant to Virginia Code § 54.1-3936.B on February 9, 2023 detailing the embezzlement from the Trust Account by Ms. Padgett from August of 2022 through December of 2022.
Resulting harm
Respondent is aware from information provided by the receiver that the sum of funds lost by his former clients as a result of Ms. Padgett’s embezzlement and his failure to terminate her employment or otherwise restrict her access to the Trust Account may exceed $50,000. The receiver has further indicated that the total amount of Ms. Padgett’s embezzlement from the Shapiro Law Finn is approximately $450,000.
WDBJ 7 reported on the criminal prosecution of the assistant
A woman hired as a secretary has pleaded guilty to embezzlement and fraud at a law firm.
Amy Padgett had been indicted by the Roanoke City Grand Jury for four counts of embezzlement, two counts of credit card fraud, and one count of forgery, according to the Roanoke Commonwealth’s Attorney’s office. All charges were related to her employment with the Shapiro Law Firm, P.C between 2019 and 2023. Padgett pleaded guilty to all charges and faces up to 55 years in prison. Her sentencing is scheduled for July at Roanoke City Circuit Court.
Padgett was working as a legal secretary at the firm. As part of the job, she had access to the firm’s bank accounts and credit cards. From 2020 to 2022, the commonwealth’s attorney’s office said, she cashed in more than $275,000 in checks written to herself from the Shapiro Law Firm accounts. The amount was more than $180,000 of her salary.
Assistant Commonwealth’s Attorney John McNeil, Jr. says an investigation by Roanoke City Police and the Virginia State Bar led to the discovery that the Shapiro Law Firm credit card was used to pay rent, as well as beauty and BOTOX treatments. The fraudulent usage of the credit card amounted to more than $30,000 of Padgett’s expenses.
(Mike Frisch)