The Oklahoma Bar Journal May 2023

This is how many of the six- figure law firm embezzlement by employee cases begin. Once it is seen how an embezzlement could work, they could begin looking for other avenues that are open. An Oklahoma lawyer/CPA told me a story where five employees of a firm had American Express business accounts. The bookkeeper soon figured out that she could pay her personal American Express bill with a law firm check and no one would be the wiser. Soon her AmEx account had a large positive balance, and the bookkeeper began traveling for pleasure more. Good processes can limit the opportunities for financial mischief. Someone other than the bookkeeper doing the books should review the bank statement or online bank records monthly. All cash payments received must result in a receipt given to the cli ent with carbonless copies made. For an example of a worst case scenario, we have the case of Blanca P. Greenstein. The West Palm Beach lawyer did not bother with a background check because her then-husband, who was also the law firm’s CFO, recommended the employee, having worked with her at another firm. Had a background check been run, the firm would have discovered this person was a felon, having been previously convicted of theft. As the headlines later noted, “A Swindle Cost a South Florida Attorney Her Law License, Marriage and $155,000.” 2 Even though the lawyer bor rowed money to replenish all missing funds within 48 hours and no one accused her of a wrong, intentional act, she ended up with an agreed three-year suspension from the practice of law, along with paying $8,261 in costs. That she was an innocent vic tim was likely a mitigating factor.

But the fact that the bookkeeper wrote personal checks to herself totaling $155,000 over an 18-month period was likely an aggravating factor, as even a cursory examina tion of trust accounting records would have revealed the scheme. The law practice management advice is the trust account contains funds from clients and others. The lawyer with the trust account has complete responsibility. A lawyer can delegate certain duties, but you cannot abandon oversight of your trust accounting responsibilities. Many large law firms have their employees who handle money bonded, a process that would also catch felony convictions. CONCLUSION One of Greenstein’s friends and lawyer advisors said Greenstein’s story should serve as a lesson to all attorneys that the bar has an “acute sensitivity” when it comes to trust accounting. 3 Given that the lawyer receives the money in trust to keep it safe, that “sensitivity” is understandable. But this is not the only lawyer discipline story that started with an inadequate hiring process, which is why I now believe that these processes are essential for law firm staff hiring. Mr. Calloway is the OBA Management Assistance Program director. Need a quick answer to a tech problem or help solving a management dilemma? Contact him at 405-416-7008, 800-522-8060 or jimc@okbar.org. It’s a free member benefit.

ENDNOTES

1. https://chirp.osbi.ok.gov/. Accessed April 10, 2023. 2. http://bit.ly/40VnN7H. Accessed April 10, 2023. 3. Id .

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THE OKLAHOMA BAR JOURNAL