The proper handling of client funds is one of the central ethical responsibilities for any attorney. Intermingling of client monies with personal accounts, or misuse or misappropriation of client funds is one of the surest ways for at attorney to face ethical disciplinary measures up to and including disbarment. The more serious of these misdeeds can also result in criminal charges.
An example of the latter of these two possibilities has come to light recently in the conviction of an attorney in a federal court in Newark for multiple counts of mail fraud. The attorney, who practiced immigration law, was responsible for placing advertisements for firm clients that employed foreign workers. The advertisements were required under federal law so that permanent resident aliens living in the same area as the foreign workers would have an opportunity to apply for those positions. The attorney was entrusted with more than $500,000 of client funds to place those advertisements.
Things began to go awry when the attorney directed those funds to an advertising agency without disclosing to the clients or to the law firm he worked for that he owned that agency. To make matters worse, instead of using the client funds to purchase and place the ads, he appropriated much of the funds for his own use. The scheme was eventually exposed during the course of a routine audit.
In addition to facing a prison sentence of up to 20 years, the attorney is also subject to a fine of up to $250,000 as well as restitution of the misappropriated client monies.
Misleading clients and employers, self-dealing with client monies, failing to perform the work that he or she was retained for and committing crimes in connection with misuse of client funds are all activities that can seriously damage the foundation for client trust in the legal profession. Aside from possible government criminal sanctions, clients of such attorneys should also consider enlisting the assistance of a firm that practices in legal malpractice matters to help hold such bad actors accountable.
Source: NJ.com, “Lawyer found guilty of pocketing $579K meant for job ads,” Paul Milo, June 30, 2015