At Issue in Ethics Trial: Did Verrill Dana Try to Cover Up in $300K Partner Theft Matter?
After hearing on June 13, 2007 that a secretary had blown the whistle on a longtime Verrill Dana senior partner, then-managing partner David Warren asked to see check copies, bank records and a spreadsheet and confronted his accused colleague, John Duncan, on June 28.
Duncan looked him the eye, Warren testified yesterday in a legal ethics hearing, and promised he’d never stolen from a client, recounts the Portland Press Herald.
And that story seemed plausible, Warren testified: The $77,500 in checks that Duncan had written to himself, as the conservator of an elderly woman’s estate, represented money he had stolen from the firm, in legal fees that should have gone to Verrill Dana, rather than from the elderly woman herself,
Meanwhile, due to Duncan’s seemingly fragile emotional state, Warren—who testified that his partner was an “emotional wreck” at this time—was worried that Duncan might commit suicide.
On July 9, the executive board of the well-known Maine firm met and agreed to let Duncan continue working at the firm. The next week he repaid the firm $77,500, the newspaper says.
And that might have been it, but for a secretary’s aggressive whistle-blowing, says the Maine Board of Bar Overseers in a legal ethics complaint filed against Warren and five other firm lawyers who were members of Verrill Dana’s executive board at the time Duncan’s wrongdoing came to light.
Not until after secretary Ellie Rommel, who contends she was constructively discharged as a result of accusing Duncan, went to a lawyer who threatened on Oct. 5to bring a wrongful termination claim, did the firm investigate further, says the attorney disciplinary body.
But Warren says he asked the chair of the firm’s trusts and estates department, on Oct. 2, to look into other matters Duncan had handled for possible wrongdoing. And he says the chair did find additional issues even before Rommel’s lawyer got involved, the newspaper reports.
In either case, it wasn’t until later than month that Verrill Dana brought in outside counsel and accountants to review Duncan’s files. The review showed Duncan had stolen $109,000 from clients by writing checks to himself and another $187,500 by taking for himself attorney’s fees payments that should have gone to the firm partners.
Duncan was fired in November 2007, as the review was bringing his further misconduct to light, and the firm reported him to the bar board and prosecutors once the review was complete, the Press Herald says. Verrill Dana also repaid clients in full, with interest.
However, “Duncan’s misconduct would have remained hidden, covered up and never properly reported by any of the firm’s board members as they were required to do,” but for Rommel’s potential claim, argues lead counsel J. Scott Davis in board filings.
The bar overseers contend that Verrill Dana should have immediately investigated and reported Duncan to the board as soon as his initial misconduct came to light in June.
Rommel is expected to be the star witness in today’s testimony in Lewiston District Court before Justice Donald Alexander of the Maine Supreme Judicial Court. Her employment matter settled in 2008.
Duncan, who has been permanently disbarred, was convicted and served time concerning the thefts, as detailed in earlier ABAJournal.com posts. He reportedly may have been motivated by an irrational desire to save money.
Additional coverage:
ABAJournal.com: “Six Verrill Dana Lawyers Face Possible Discipline re Ex-Chair’s $300K Theft”
Sun Journal: “Verrill Dana attorneys sit through second day of licensure hearing”
