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Legal Ethics

Ex-Partner at S&C Gives up Law License over $500K in False Expenses

Posted Sep 24, 2008 4:56 AM CST
By Debra Cassens Weiss

A former partner at Sullivan & Cromwell has resigned from the bar and admitted he submitted an estimated $500,000 or more in false expense reports to clients and the law firm.

Carlos Spinelli-Noseda, a banking and finance specialist in Latin American transactions, said the improper billing took place over a 10-year period ending this year, the New York Law Journal reports. He resigned from the firm in March.

In an affidavit (PDF posted by the New York Law Journal), Spinelli-Noseda said he billed personal expenses for travel and entertainment to clients and sometimes billed for first-class tickets on international flights while flying economy or business class. He did not identify the clients.

He also said he billed personal meals and travel expenses to his law firm, claiming they were for business development, and sometime billed for expenses never incurred.

Legal ethics professor Stephen Gillers of New York University law school told the New York Law Journal that such cases were “head scratchers” to experts in the field. "We don't understand why anyone would jeopardize their position and achievements for what amounts to pocket change for partners at large American firms," he said.

The dominant theory, he said, is that lawyers abusing expense accounts are possibly expressing anger about perceived unfairness in their law firm compensation or the greater wealth of clients.

Comments

1.

Ellen Barshevsky
Sep 25, 2008 5:27 PM CST

I think this is also CRIMINAL.  With all of the money big-firm partners make, my boyfriend says this is REALLY cheezy.  It is equavelent to THEFT, he says, and the firm should prosecute this as a legal offense.

Can’t the DA take action, here, too?  Is it not enough to take away a law license? 

My boyfriend says not unless the firm prosecuted, but that the statue of limitations would be over for 10 years of this thievery.

I say it is equal to a PUBLIC harm for which the DA should have exclusive JURISDICTION.

Is there anyone out there other than Steven Gillers that can answer this inquiry? 

I believe I am right and my boyfriend is Wrong.

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2.

Brad
Sep 26, 2008 6:37 AM CST

Well my girlfriend says I am right.  My girlfriend says you are crazy.  My girlfriend likes wine and long walks on the beach

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3.

tom
Sep 26, 2008 7:04 AM CST

Can someone explain how this is legal for the feds to steal a legitimate business?

“The government then stepped up its efforts, at points going behind WaMu’s back to work privately with four potential bidders on a deal.”…”the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered…”

http://www.nytimes.com/2008/09/26/business/26wamu.html?_r=1&hp&oref;=slogin

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4.

mark weiland
Sep 26, 2008 7:05 AM CST

This is idiotic.  He was not “expressing anger about perceived unfairness…” HE WAS STEALING.  Get over it, it was a theft, like any other theft by some other low-life, and just because this moron worked for a big firm and made a ton of money doesn’t imbue a theft with any higher purpose.

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5.

HP
Sep 26, 2008 7:05 AM CST

I hope that neither Ellen nor her boyfriend are lawyers—lord help their clients if they seriously don’t know the answers to the questions they are debating.

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6.

james rumbaugh
Sep 26, 2008 7:17 AM CST

It ‘s ego. It’s getting over on the rest of us…the partners,the clients, the public. I had a relative,RIP, who used to say to me “Jimmy, stealing a dollar is SO much better than earning ten.” Look at any politician.

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7.

brad
Sep 26, 2008 7:24 AM CST

#5, right on.  Or if they are, please have them post their school so I can proceed to not hire anyone from there

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8.

Will
Sep 26, 2008 7:30 AM CST

My girlfriend said this guy sounds pretty stupid.  I agreed with her.  So then my girl friend said that’s good that I agreed with her.

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9.

George W.
Sep 26, 2008 8:15 AM CST

I was wondering if we could ask Ellen and her boyfriend to come to Washington and help us solve this financial crisis.

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10.

J Stanwood
Sep 26, 2008 8:20 AM CST

Yes but usually there is a motivation for the theft - say hunger or drugs - and they’re trying to figure out what his motivation was.

“This is idiotic.  He was not “expressing anger about perceived unfairness…” HE WAS STEALING.  Get over it, it was a theft, like any other theft by some other low-life, and just because this moron worked for a big firm and made a ton of money doesn’t imbue a theft with any higher purpose. ”

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11.

deebs
Sep 26, 2008 8:21 AM CST

Ellen posted on another article about the LSAT - yes, she is an atty

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12.

Beth Anne
Sep 26, 2008 8:26 AM CST

Billing for expenses never incurred?  Flying business class but charging for first class?  Where were the internal controls at the Firm? Was this guy really good at making fake receipts or did the firm not require that its lawyers submit documentation for expenses billed to clients?

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13.

kburn
Sep 26, 2008 8:49 AM CST

“Pocket change”?  Wish I had it so I could buy a Hummer and pay for the gas for a year.  Hopefully, he will go to jail where his fellow inmates will shove it to him like he did to his clients.  When he gets out he can go to work on Wall Street.

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14.

FJP
Sep 26, 2008 9:02 AM CST

What a bleak affidavit.  What do you do after signing a piece of paper that says, basically, “My life is over.”

Almost every time a lawyer pads bills or misappropriates funds, the amounts seem paltry in comparison to what the lawyer was making honestly.  These guys don’t have to steal to make money.  Very often you find the stolen money is financing an affair, or a substance habit, or a gambling habit.  It’s a kind of off-balance-sheet transaction, as it were, and it allows the rationalization that you aren’t spending the rent money or the kids’ college fund on the booze or the thousand-dollar escort.

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15.

Matt
Sep 26, 2008 9:09 AM CST

@ FJP - Sounds like he’s all set to become a lobbyist.

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16.

Bobby Guei
Sep 26, 2008 9:23 AM CST

I don’t believe Ellen Barshevsky is a lawyer, because I don’t believe she is a real person.  I think she’s a fake identity created by some bored associate to troll these message boards.  Please google her name.  You will find only entries based on her ridiculous posts to this site and to one or two other sites that have been mentioned/linked to in items posted on this site.  Please note that Ellen is among the first commenters on almost every item on this site.  This week, she seems to be on a “boyfriend” kick, since she seems to work references to a boyfriend into many posts.  As a prank, this is kind of funny.  If she were a real person, this would be sad.

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17.

Odysseus Rex
Sep 26, 2008 9:23 AM CST

This clown STOLE half a MILLION dollars?  Lotta first class travel expense reports….?  What were the firm accountants,  payroll staff, travel agents doing???  HOW does somebody STEAL half a MILLION dollars on travel expenses!  Ever hear of “receipts”??  I’ve travelled hundreds of thousands of miles for clients, private and government agency clients, and they all want RECEIPTS before I’d get repaid…!!  Steely-eyed firm book keepers with NO sense of humor…clients’ auditors with even less!!  And let’s not forget the IRS…where were they when someone deducted these bogus travel expenses from his or the firm’s INCOME TAX….?  Corporate greed and the demise of honesty, integrity, and honor…by partners in blue chip law firms?

NO WONDER everybody’s repeating the immortal bard:  “First we shall kill all the lawyers!”

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18.

Pessa
Sep 26, 2008 9:55 AM CST

Wow.  Just wow.  All your accomplishments down the drain and then branded as a thief.  Why are people so daft?

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19.

Marc H
Sep 26, 2008 9:58 AM CST

#5 - I agree; or Barshevsky may be a fictitious identity used by ABA Journal itself to generate discussion by posting idiotic, inflammatory comments.

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20.

Maudie
Sep 26, 2008 10:22 AM CST

Where is the lessons on ethics here.We as law students are taught this from start go.This is sad and he should have to face the music.

We as law students and as lawyers should always uphold the law not use it as a gambeling table.

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21.

Jr. partner
Sep 26, 2008 11:10 AM CST

Ellen Barshevsky is awesome.  One of the highlights of my week is to read her inane and proposterous posts.  They are certainly more entertaining than the vapid and biased “articles” in the ABA journal.

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22.

Alicia
Sep 26, 2008 11:13 AM CST

I would just like to add on, for the people that commented about Ellen,  if you read enough articles here you will she comments on 90% of them, never actually makes a point, and cites her boyfriends opinion nearly every time. 

I would suggest in the future not wasting the time or effort in reading her postings.

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23.

Bobby Guei
Sep 26, 2008 12:08 PM CST

Alicia, I disagree.  I think Jr. partner has it right.  Ellen’s posts are preposterous and they are funny.  All you have to do is read a few of them to appreciate the character that someone has created.

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24.

R
Sep 26, 2008 1:31 PM CST

“Ellen Barshevsky” is the ABA Journal version of “Laszlo Toth,” of the Laszlo Letters. Look it up.

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25.

Joe Blow
Sep 26, 2008 1:35 PM CST

Typical lawyer.  Pure scum.

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26.

DB
Sep 26, 2008 1:50 PM CST

#9. Don’t worry. Sarah & Todd are on their way.

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27.

DCEsq.
Sep 26, 2008 2:19 PM CST

Unbelievable: the article and its comment trail . . .

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28.

JR
Sep 26, 2008 5:49 PM CST

Sounds like Carlos Spinelli-Noseda is becoming well qualified in terms of experience to serve in congress! 

Anybody know what precipitated his making these confessions? 

As to the other issue, my vote is that neither Ellen nor her boyfriend are real people.

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29.

George
Sep 26, 2008 10:15 PM CST

Lets see.  The assh*le probably had a great GPA (graduated top 33% of his class) from a great university.  Ooops, thats right, the important factor for a law firm is not whether you have excellent morals, would not rob from a blind person or cheat your way to high grades.  Top law firms deserve these people.  Start analyzing future employees based on real criteria and not stupid ones like grades and which law school you happened to attend.

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30.

cat
Sep 28, 2008 7:02 AM CST

I think R’s got it right:  Ellen Barshevsky appears to be a hilarious mythical troll.  Not an atty, at least she’s not listed in Martindale.

And regarding the substance of this article, though these are the cases that make the press, I know plenty of small-town solo attorneys who commonly do the opposite:  cut their local and lower-income clients a break on the billables.  But they do it quietly and without press coverage.

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31.

Bill Dickey
Sep 28, 2008 10:21 AM CST

I think Ellen B. went to my law school; if not, there was somebody that sounded just like her.  I’d like to know more about her relationship with her boyfriend.  The guy must be a saiint , or willing to put up with almost anything for good sex.

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32.

james rumbaugh
Sep 29, 2008 8:26 AM CST

Jesus! I thought the ABA postings would have some graivity. This is Boob You Tube…who is or isn’t a lawyer…... who is a real person..who of the commentators is having sex?

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33.

Andy the Lawyer
Sep 29, 2008 10:25 AM CST

The real mystery isn’t why Carlos the Lawyer stole $50k per year from his firm’s clients.  It’s why it took the firm and the clients 10 years to figure out what was going on and to put a stop to it.

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