Hello and welcome to this JACPA Ethics Alert blog which will discuss the recent media reports that The Florida Bar no probable cause to proceed against partners in Orlando’s KEL law firm related to Bar rule violations related to an international money scam in which the law firm was defrauded of more than $285,000.00.
The Florida Bar began its investigation after several Bar complaints were filed alleging that the KEL law firm’s three principal partners mismanaged trust account funds when the firm unwittingly became involved in the money scam. In late February 2012, a Bar grievance committee found that the lawyers in KEL did not violate any Bar disciplinary rules when the law firm was scammed into depositing a fraudulent bank check in the amount of $285,000.00 into its trust account and wiring the funds to a Japanese bank account before the funds had cleared the bank.
As I have stated on numerous occasions and in previous trust account seminars, Florida Bar trust account rules require lawyers to wait for trust funds to clear all banks before the funds are disbursed; however, there are exceptions and the Bar’s Notice of No Probable Cause found that the lawyers had “reasonable and prudent grounds to believe” the check was legitimate (under Florida Bar Rule 5-1.1(j)(3)), which is one of these exceptions.
According to the media reports, the Notice also stated that KEL fully cooperated with a federal investigation of the incident, that the funds have since been “retrieved.” Federal authorities had previously filed a forfeiture suit seeking to recover the money from JPMorgan Chase, an affiliate of Japan’s Shinsei Bank, where the money was deposited.
Bottom line: This is a very real example of the substantial risks to lawyers related to these types of international/internet money scams and should be a stark lesson to all lawyers. Please don’t be fooled and don’t let this happen to you…
…and be careful out there!
As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.
THE LAW OFFICE OF JOSEPH A. CORSMEIER, P.A.
PROVIDES ETHICS ADVICE AND EXPERT OPINIONS TO LAWYERS AND LAW FIRMS
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Joseph A. Corsmeier, Esquire
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