- 2 lawyers who say their bookkeeper fled to Argentina with $4.8M in client funds are disbarred
2 lawyers who say their bookkeeper fled to Argentina with $4.8M in client funds are disbarred
Posted May 2, 2013 10:15 AM CDT
By Martha Neil
Two Florida lawyers who say their bookkeeper embezzled $4.8 million and fled to Argentina have been disbarred.
A referee hearing the Florida Bar legal ethics case had recommended that Mark E. Rousso and Leonardo A. Roth merely be temporarily suspended from practice, for 12 and 15 months, respectively. But the state's top court ruled that the two deserved more severe punishment because they could have detected the loss earlier, and mishandled the matter once they realized what was going on, according to the South Florida Business Journal.
The publication could not immediately reach Rousso for comment. Roth's lawyer said he expects to complete restitution to the last victim soon and hopes to apply for reinstatement of his law license in two years. The situation has resulted in the "financial ruin" of Roth, who has done everything he can to try to make amends, said his attorney, Andrew Berman of Miami.
In its March 28 opinion (PDF), the supreme court explained that trust account issues came to the two lawyers' attention in 2008, but it wasn't until later in the year that they understood the extent of the problem. At that point, as the Florida Bar put it, their actions in response were "too little, too late."
While the two hired an accountant and outside counsel and contacted police and the bar's ethics hotline, they did not timely notify clients of the situation and continued accepting payments that went into the compromised trust account, in conflict with the interests of their clients, the supreme court held. In addition to finding that Rousso and Roth failed to keep adequate client trust account records and reconcile the account monthly as required, the court also held that they improperly commingled their own funds with trust money, albeit in an effort to repay clients, and made disbursements from the trust account that favored some clients over others, again in an effort to make restitution.
The firm's malpractice insurance covered some of the client losses, and the two lawyers used their own money, borrowed family money and a client loan to make up what they could of the difference. (The opinion suggests that all but several hundred thousand dollars of the embezzled client money was repaid.) However, the two lawyers defaulted on the payments due on a $231,000 promissory note to the client, and Rousso and Roth testified that they are insolvent, the opinion says.
The court also found that the two violated legal ethics rules by accepting a client loan without following all of the requirements for doing so in an arm's-length transaction.
The disbarments are effective as of December 2010, when the two were suspended on an emergency basis. They must also pay nearly $71,000 in disciplinary proceeding costs, the court held, rejecting an "equitable adjustment" of costs by the referee that would have reduced the amount to $39,806.23.