Legal Ethics

Solo is censured for failing to detect paralegal's participation in mortgage fraud scheme

A solo lawyer in East Orange, New Jersey, has been censured for failing to discover his paralegal’s wrongdoing.

The New Jersey Supreme Court censured lawyer Stephen Brown on July 28 because he didn’t discover the paralegal was participating in a mortgage-fraud scheme, the New Jersey Law Journal reports.

The disciplinary review board granted Brown’s motion for disciplinary consent, according to a July 22 letter (PDF). The board said Brown failed to discover the longtime paralegal/bookkeeper’s conduct because he didn’t reconcile his attorney trust account during the relevant period and didn’t properly supervise the nonlawyer.

As part of the scheme, the paralegal, Linda Cohen, conducted real estate closings without Brown’s knowledge, the letter says. She was accused by federal prosecutors of acting as a settlement agent for fraudulent mortgage loans. She pleaded guilty last year to conspiring to commit bank fraud and transacting in criminal proceeds, according to a press release.

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