Lawyer who gave 'perfect' secretary a second chance after theft is suspended after misjudging her
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A Pennsylvania lawyer who gave a trusted employee another chance after she stole from his aunt’s estate has been suspended from practice following her continued client thefts.
The Pennsylvania Supreme Court suspended Harrisburg, Pennsylvania, lawyer William Krzton for six months for failing to supervise the employee, who stole additional money from seven estates represented by the lawyer.
The Legal Profession Blog links to the Aug. 6 order and report, while Law360 has coverage.
Krzton had testified that he was surprised to learn of the additional thefts. He said he put a lot of trust in the employee, Joy Hale, and he thought that she was the “perfect” secretary.
According to a report and findings of fact by the disciplinary board of the Pennsylvania Supreme Court, Krzton hired Hale in 2008 to handle estate accounting and perform other duties.
Krzton learned in 2013 that Hale had stolen $3,300 from his aunt’s estate by writing a check and forging his signature. Since $3,300 was the amount of his fee, he figured that he was the only one who lost money. He admonished Hale, required her to repay the estate through a reduction in pay, and gave her a second chance.
Hale continued to steal money from estates. In May 2016, an estate executrix who hired Krzton to represent her informed the lawyer that Hale was misrepresenting account balances.
Krzton told the executrix that she must be mistaken. The executrix persevered, meeting with the bank and taking her allegations to a detective with the Allegheny County district attorney’s office. Krzton learned about the investigation July 1, 2016.
The amount stolen from that estate was more than $96,000. Between July 1 and Sept. 4, 2016, Krzton learned that Hale had stolen from six other estates, as well, for a total of about $191,000.
Despite Krzton’s knowledge of the investigation July 1, 2016, he continued to employ Hale for two more months. He testified that he kept Hale on because he was “not literate” on her computer, and he had to handle several pressing client matters. Hale did not have access to estate files and checkbooks during that time, he said.
Hale pleaded guilty to criminal charges of theft and forgery, according to the findings of fact. She was sentenced to nine months to 18 months in prison and ordered to pay restitution of more than $202,000. She eventually made payments toward restitution of $12.50 per month. Krzton settled a suit filed by the executrix for $92,500.
Krzton’s friends testified that he is a trusting person with a good reputation for integrity, honesty, professionalism and courtesy.
The Pennsylvania disciplinary board said Krzton violated ethics rules requiring lawyers to act with reasonable diligence, to keep clients reasonably informed, to keep accurate accounting records, and to supervise nonlawyers to ensure that their conduct is compatible with a lawyer’s professional obligations.
“Inexplicably, despite his knowledge of Ms. Hale’s dishonest conduct, [Krzton] made no efforts to enhance supervision of her activities to ensure compliance with record-keeping responsibilities and prevent further thefts,” the Pennsylvania disciplinary board said. Krzton’s “dereliction of his ethical duties had very serious consequences, as Ms. Hale’s unfettered access allowed her to steal $191,026.99 from seven other estates.”
The board also found that Krzton was dilatory in handling another matter, causing a 13-year delay in resolving the estate.
Krzton was admitted to law practice in Pennsylvania in 1976. The board considered his lengthy career with no prior discipline to be a mitigating factor. He also had a good reputation and cooperated in the investigation. And he has made some reimbursement to the estates, either directly or through his insurance carrier, the board said.
Krzton told the ABA Journal that he has retired from law practice and works as a consultant to his wife’s company. He enjoyed law practice for 45 years, and he was “absolutely” sorry to see it end on this note. It was “a very sad and difficult situation,” he says.
Hale was stealing “in a very nefarious way,” using a color printer at her home to print fudged bank statements that looked like the real thing, he says.
Krzton worked as a sole practitioner in a general practice firm founded by his father in the 1950s. He did a lot of criminal and family law work that required him to be in court, and he needed someone to trust in the office.
“You can’t just close the door” when you are in court, he says.
Even his former clients were surprised to learn about Krzton’s wrongdoing, he says.
He thinks the disciplinary board was most upset with the fact that he kept Hale as an employee for two months after learning that she was under investigation. He says he “didn’t let her near” estate work during that time. But he wanted to keep her on, so she could clear everything off her desk for clients.
Hale had all the institutional knowledge and knew where everything was on the computer, he says.
Krzton says he or his insurance company has settled with every estate, except for one case that is outstanding.
“It’s a cautionary tale, I’m sure,” he says.
