Fake Casino, Real Losses

Theft of law firm funds drew disbarment by the New Jersey Supreme Court.

The misconduct was described by the Disciplinary Review Board in its report and recommendation

In September 2015, respondent began his employment at the Firm as an associate. Shortly thereafter, the Firm’s managing partner added him as an authorized user of the Firm’s credit card, allowing him to make firm-related purchases, including office supplies, via his personal Amazon1 account. Additionally, on some occasions, the managing partner authorized him to make “specific non-firm related purchases,” including a pair of sunglasses for himself and a “gadget” for his mother to allow her “to open doors without touching them.” The managing partner paid the Firm’s credit card bill with law firm funds.

Respondent stipulated that, between December 2019 and August 2020, he utilized the Firm’s credit card to purchase, via his personal Amazon account, $16,755.72 worth of “unauthorized gift card[s],” which he then used to purchase “game coin packs” to play an online casino game. Prior to August 3, 2020, respondent “continuously” misrepresented to the Firm’s bookkeeper that the Amazon charges represented legitimate firm expenses for office supplies and “website expenditures.” Moreover, on August 3, 2020, when a member of the Firm questioned him regarding certain charges on the July 2020 credit card statement, he claimed that “certain personal charges were mistakenly charged” to the Firm’s credit card.

Respondent then resigned from the Firm, pursuant to an August 18, 2020 separation agreement. The separation agreement provided that respondent and the managing partner had agreed not to file “any lawsuit or claim” against one another “based on any events, whether known or unknown, occurring prior to the date of the execution of [the] agreement.” Prior to executing the separation agreement, respondent had disclosed to the managing partner his “mental health diagnosis.”

On September 27, 2020, one month after his departure from the Firm, respondent sent the managing partner an e-mail, stating that it was “time I was honest with you” and that he had “betrayed your trust with the [Firm’s credit card].” In his e-mail, he claimed that, after suffering a personal hardship, he “started playing this stupid came called club Vegas to occupy time. It’s a fake casino game. I was buying coin packs until I was maxed out with my credit cards. No control. Needed to fill the void.” After describing his personal struggles during the COVID-19 pandemic, respondent told the managing partner that he had “spiraled out of control into more self-destructive behavior. I used the [Firm’s credit card] to buy game coin packs from Amazon. I needed to play this game like it was my crack. The only escape where I could turn my brain off.” Respondent apologized for his actions and promised that he would “make good on paying you back in time” and “[a]s soon as I find a job I will start sending you what I can.” He also indicated that he was “on the verge of bankruptcy.”

On September 29, 2020, the managing partner sent respondent a reply email, stressing that it was imperative that respondent provide his Amazon account credentials to allow the Firm to determine the extent of his unauthorized credit card charges. Respondent, however, failed to provide the managing partner with his Amazon account credentials.

On October 9, 2020, the managing partner filed an ethics referral with the OAE, based on respondent’s unauthorized use of the Firm’s credit card.

Respondent advised the OAE that he had used the credit card to purchase “game coin packs from Amazon” but

Respondent argued, however, that he had not committed any unethical conduct, stressing that he and the managing partner had a close relationship in which he would “put furniture together in [the managing partner’s] home, replaced his car headlamps, fixed flat tires, set up gaming devices, and otherwise helped every way I could with personal matters.” Respondent also asserted that, during the pandemic, he had taken on the additional responsibility of handling the Firm’s recordkeeping obligations. Respondent further maintained that there “was never any policy” as to his use of the Firm’s credit card and that the managing partner previously had allowed him to make specific personal purchases via the credit card. Additionally, respondent asserted that, prior to his departure from the Firm, the managing partner had questioned him regarding his use of the Firm’s credit card to make purchases at a fast-food restaurant, a clothing store, and Amazon – purchases which, in respondent’s view, reflected the managing partner’s “awareness” that he “had made some personal purchases with [the Firm’s credit] card.” Finally, respondent claimed that “[c]ircumstances with [his] co-worker . . . led to [his] decision . . . to leave the [F]irm” and, further, expressed his view that the managing partner was experiencing “buyer’s remorse” concerning the separation agreement in which they had agreed to release any claims against each other “based on events, whether known or unknown, occurring prior to the date of the execution of [the] agreement.”

In the bar investigation

respondent stipulated that he violated RPC 8.1(b) by failing to comply with the OAE’s requests for his Amazon account credentials. Additionally, respondent stipulated that he committed third-degree fraudulent use of a credit card, in violation of N.J.S.A. 2C:21-6(h) and RPC 8.4(b), by using the Firm’s credit card “with fraudulent intent” to purchase the “game coin packs.” Finally, respondent stipulated that he violated RPC 8.4(c) and the principles of Siegel, 133 N.J. 162, by knowingly misappropriating law firm funds via his fraudulent use of the Firm’s credit card to purchase the game coin packs.

Sanction

In conclusion, given respondent’s admitted knowing misappropriation of law firm funds and the absence of a genuine business dispute over fees, disbarment is the only appropriate sanction, pursuant to the principles of Siegel as applied by subsequent disciplinary precedent. Therefore, we need not address the appropriate quantum of discipline for respondent’s additional ethics violations.

Member Spencer voted to recommend the imposition of an indeterminate suspension, with the conditions that, prior to reinstatement, respondent prove his fitness to practice law, as attested to by a medical doctor approved by the OAE, and to provide the OAE with an accounting of the $43,691.16 in total Amazon charges that he had made with the Firm’s credit card, between September 2019 and September 2020. In Member Spencer’s view, respondent’s conduct should not result in the ultimate sanction of disbarment, considering his earnest claim that he suffers from a serious compulsion to engage in online gambling, which he insinuated drove him to commit his misconduct.

(Mike Frisch)