Unaware

An attorney whose spouse had authority over his trust account has been reprimanded by the New Jersey Supreme Court.

From the Disciplinary Review Board report and recommendation

The OAE also concluded that, although respondent allowed Irena to prepare and write ATA checks, he was unaware that, between January 2020 and September 2022, she had initiated twenty-four electronic transfers from his ATA to his ABA, in amounts ranging between $200 and $3,000, totaling $31,950. Further, respondent was unaware that, on August 13, 2021, Irena had initiated a $370 electronic transfer from his ATA to the District of Columbia Bar. The OAE also determined that, unbeknownst to respondent, between January 2020 and August 2022, Irena had issued thirteen ATA checks, made payable to respondent, in amounts ranging between $500 and $5,000, totaling $38,160. Moreover, on July 26, 2022, Irena issued a $2,150 ATA check to their family’s landscaper, without respondent’s knowledge. As a result of these unauthorized ATA disbursements, Irena invaded twenty-nine clients’ funds.

Sanction

The crux of respondent’s misconduct was his improper abdication of his non-delegable fiduciary duties, which directly allowed Irena’s undetected misappropriation of his clients’ funds. Generally, an admonition or a reprimand is imposed when an attorney’s failure to supervise his or her nonlawyer staff results in the misappropriation of entrusted funds…

The quantum of discipline is enhanced, however, when attorneys fail to conduct reasonable oversight of their recordkeeping responsibilities, which could easily have uncovered employee misconduct, or when attorneys have reason to suspect that their nonlawyer employees have engaged in misconduct but fail to take any remedial action.

Here spousal banishment is not required

we determine that a reprimand is the appropriate quantum of discipline necessary to protect the public and preserve confidence in the bar. We decline, however, to require respondent to exclude Irena entirely from his law firm and the administrative tasks she performs, as the OAE requested. We view such a requirement as unnecessary because the risk of recurrence and future client harm was abated when respondent restricted her access to his attorney accounts.

(Mike Frisch)