Category Archives: Lawyer expense reimbursement

Illinois imposes one year suspension on (former) law firm partner who falsified and received $69,800.00 in client expense reimbursement

Hello everyone and welcome to this Ethics Alert which will discuss the recent Illinois Supreme Court Order which imposed a one year suspension on a law firm partner who falsified and received $69,800.00 in client expense reimbursement claims.  The case is In re: Lee Mark Smolen, Disciplinary Commission, M.R.27199, No. 2013PR00060 (March 12, 2015).  The summary disciplinary Order is here: http://www.state.il.us/court/SupremeCourt/Announce/2015/031215.pdf

As I reported in my January 12, 2015 Ethics Alert, a law firm audit found that the lawyer had submitted $69,800.00 in falsified taxi expenses and questioned an additional $379,000.00 reimbursed expenses.  The lawyer admitted that he “falsified and submitted for reimbursement more than 800 receipts for cab rides he did not take. He further admits he received reimbursement totaling $69,800 for the fabricated receipts.”

According to the Hearing Board Report, the expenses were charged to an unallocated client account which was “virtually unmonitored”.  The lawyer agreed that the law firm could withdraw $400,000.00 from his account to cover the expenses and the cost of the audit and he testified he used the cab money to pay for client entertainment, saving the time of making out expense reports.  He testified that he only slept three or four hours a night and typically spent 12 to 15 hours a day at work.

The Report further stated that the lawyer’s “mental health issues and his misconduct” were considered and one doctor opined there was a “loose association” between the lawyer’s personality disorder and his misconduct because the lawyer “was excessively devoted to work as a result of his obsessive-compulsive disorder.”  Another doctor stated that the lawyer’s depressive disorder and anxiety disorder led to “tremendous impairment of judgment” which led to the misconduct.  Both doctors found that the lawyer’s mental health played at least a minor role in his misconduct and gave it “some weight” as a mitigating factor.

 

According to the Report:  “We recognize that the amount of Respondent’s falsified expenses is greater than the amounts in the (cited) cases but in light of (the lawyer’s) significant mitigation we do not believe a suspension of more than one year is warranted.  We believe a one-year suspension addresses the severity of the misconduct and also takes into consideration the substantial mitigating factors.”

The Report recommended that (the lawyer) be suspended for one year and until he completed at least twelve months of continuous treatment with a psychiatrist. The lawyer’s suspension would terminate after one year if he “demonstrates his completion of treatment to the Administrator’s satisfaction.”  The Illinois Supreme Court adopted the Report and suspended the lawyer for one year with the recommended conditions.

Bottom line:  As I said previously, this lawyer admitted that he falsified and submitted for reimbursement more than 800 receipts for cab rides he did not take and received payment for nearly $70,000.00 from clients for the fabricated receipts.  An audit also questioned an additional $379,000.00 in reimbursed expenses.  In light of the large amount of the lawyer’s admitted misappropriation, it is surprising that the Board did not recommend disbarment for the misconduct and also that the Illinois Supreme Court approved the one year suspension recommendation.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leave a comment

Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, deceit, dishonesty, joe corsmeier, Joseph Corsmeier, Lawyer conduct adversely affecting fitness to practice, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer expense reimbursement, Lawyer misappropriation, Lawyer misrepresentation, Lawyer misrepresentations to law firm re billings, Lawyer Professionalism, Lawyer sanctions

Wisconsin Supreme Court agrees with referee and rejects disciplinary charges related to alleged improper reimbursement of ABA expenses

Hello everyone and welcome to this Ethics Alert which will discuss the recent Wisconsin Supreme Court opinion approving a referee’s report rejecting the imposition of discipline on a lawyer who allegedly sent “compound” (duplicate) reimbursement requests to the ABA.  The case is In the Matter of Disciplinary Proceedings Against Richard J. Podell, Attorney at Law: Office of Lawyer Regulation v.  Richard J. Podell, 2012AP371-D (March 22, 2013).  The opinion is attached and is at: http://www.wicourts.gov/sc/opinion/DisplayDocument.html?content=html&seqNo=94426.

The opinion states that the lawyer was admitted to practice law in Wisconsin in 1969 and had never previously been disciplined.  He was also a “longtime active member of the ABA, serving on numerous committees and holding numerous office positions.  He was a member of the House of Delegates, was past-Chair of the Family Law Section, was Chair of the Individual Rights and Responsibilities Section, and also served as budget officer of the Senior Lawyers Division.  The lawyer also frequently attended ABA section meetings and ABA House of Delegates meetings and submitted requests for financial reimbursement to different ABA sections.”

According to the disciplinary complaint, the lawyer personally submitted three expense reimbursement claims to the ABA requesting a total of $2,371.50 following the 2010 ABA midyear meeting in Orlando, Florida.  The lawyer subsequently received a letter from the ABA advising him he had sent “compound” (duplicate) reimbursement requests and the ABA conducted an audit of his ABA reimbursement requests for the years 2007, 2008, and 2009.  The audit showed that the lawyer submitted duplicate requests for expense reimbursement to various ABA departments for those years and that the total overpayment by the ABA was $1,155.80.  The ABA reimbursement was resolved to the satisfaction of the ABA; however, a Tennessee attorney conducted his own review and pursued the charges with the Wisconsin Bar authorities.

The disciplinary matter was referred to a referee who recommended that the lawyer be found not guilty of the all charges.  The referee’s report stated:  “(w)atching (the Tennessee lawyer) testify and considering the number of people within the ABA who now were aware of this matter; considering (the Tennessee lawyer’s) rush to judgment that (the lawyer) was guilty of dishonesty from the very outset; considering (the Tennessee lawyer’s) obsession that (the lawyer) should self-report this to OLR despite advice from others; considering that phone conversations with his so-called ‘friend’ were silently being listened to by a notekeeper or ABA staff; this referee is reminded of the old adage that with friends like this, who needs enemies.”

According to the opinion, the lawyer “admitted that he did not send the reimbursement requests to the ABA in an appropriate manner.  He expressed embarrassment and regret, repaid the ABA the amounts calculated as owed, claimed that he often failed to request reimbursement for ABA-related expenses and, had he done so, the ABA would have had to pay him considerable sums of money, and that he would not submit any further requests for ABA reimbursement.  He immediately sought to rectify his mistake.”  The opinion also noted that the ABA’s reimbursement policies were confusing, that the lawyer had a reputation for honesty, that he had no prior discipline, and that he paid restitution when the matter was brought to his attention.  The opinion agreed with the referee and found the lawyer not guilty.

Bottom line:  This is a somewhat bizarre lawyer discipline case.  First, it involved alleged false requests for reimbursement of expenses to a private entity (ABA) which were resolved with that entity, second, it involved a lawyer who was very involved with the ABA, including membership in the House of Delegates, and third, the Bar disciplinary matter was pursued by lawyer from Tennessee who had no official affiliation with the ABA who had apparently an “obsession that (the lawyer) should self-report” the conduct.

Be careful out there (and be especially careful with your expense reimbursement requests)!

Disclaimer: this e-mail does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

1 Comment

Filed under Attorney discipline, Attorney Ethics, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer expense reimbursement, Lawyer sanctions