Attorney indictment an extreme example of mishandling client trust funds

On Behalf of | Mar 8, 2017 | Professional Malpractice Law

Last time, we looked briefly at the professional duty attorneys have to safeguard client assets and property. Violations of this duty can be more or less serious, of course, ranging from making minor mistakes in handling funds to outright stealing from clients.

As an example of a serious violation, a New Jersey attorney was recently indicted on charges that he defrauded about 40 of his clients of at least $13 million. The attorney, whose father was also charged in connection with the scheme, was specifically indicted on wire and mail fraud, and money laundering charges. 

The indictment details how the attorney convinced clients to set up trust accounts based on false pretenses and misrepresentations, then diverted money from client trust funds to various shell companies for his purposes. The attorney is currently suspended from the practice of law, though intentional misappropriation of client funds usually results in automatic disbarment without the opportunity for reinstatement. To be clear, indictment only means the attorney has been charged, and he may or may not have a good defense case.

The case is an extreme and obvious example of alleged unethical handling of client trust funds. In reality, most violations are considerably less extreme. In most cases, attorneys who are disciplined for mishandling client trust assets have not taken adequate precautions to ensure proper accounting for client money. Failure to maintain a separate client ledger for each client, failure to notify clients how their funds are being used, failure to keep detailed and adequate records, and failure to do proper accounting of credit card payments and flat-fee deposits are more common examples of trust fund mishandling.

Those who have been harmed by an attorney who mishandled trust assets should always work with an experienced legal malpractice attorney to have their case evaluated, build the strongest possible case and to ensure they have the best possible representation in seeking compensation.


New Jersey Law Journal, “NJ Attorney, Father, Face Charges of Stealing Client Funds,” Michael Booth, Feb. 17, 2017., “Would You Pass a Trust Account Audit?,” Peggy Gruenke, April 16, 2014. 

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