Lawyer is suspended and forever banned from overseeing law firm financial records
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The managing partner of a Delaware law firm has been suspended and permanently banned from maintaining or overseeing his law firm’s financial records after the state supreme court concluded he didn't learn his lesson about the need to supervise bookkeepers.
Andre Beauregard, the managing partner of Brown, Shiels & Beauregard in Dover, is suspended for six months beginning July 2 for failing to properly supervise the nonlawyer employees and failing to take reasonable remedial action to correct bookkeeping errors. He also filed inaccurate certificates stating that the law firm had complied with accounting requirements. Delaware Online and Delaware State News have coverage.
Beauregard was publicly reprimanded in 2005 for failing to supervise client funds after an employee stole $140,000 from his prior law firm where he served as managing partner, Brown Shiels Beauregard & Chasanov. The 2005 reprimand noted that, during the period in question, Beauregard’s mother and father-in-law died, he had shoulder surgery, and he was “diagnosed with a debilitating medical condition.” The reprimand ordered him to dissolve the law firm,
In the new disciplinary action, the Delaware Supreme Court said Beauregard was aware of his supervisory responsibilities because of the previous discipline. Though Beauregard reviewed trust account records each month, “that review could not have been done with any precision” because there were negative balances for four to five clients over a five-month period ending in April 2015, the court said in the June 5 opinion.
Beauregard raised the issue with the employee handling the firm’s accounts, a PhD in business administration who had worked at other law firms. The employee said the negative balances were a “glitch in the program” and had nothing to do with missing money, according to the Delaware Supreme Court. The employee later testified that there had been some overpayments, resulting in the negative balances.
A client filed a complaint with the Office of Disciplinary Counsel in March 2015 after receiving two $1,000 checks in a retainer refund, when there should have been just one check. Beauregard suspended the PhD and hired two new bookkeepers who said there was no missing money.
A compliance audit in 2015 found some problems, including issues with bank reconciliations, with failing to remove earned fees from accounts, and with negative client balances in a fiduciary account of about $7,000 to $8,000 each month.
Beauregard addressed the deficiencies, hired inside and outside bookkeepers, upgraded the firm’s accounting software, and increased the time he spent supervising nonlawyer employees.
The Delaware Supreme Court said mitigating factors existed. Beauregard did not have a dishonest or selfish motive, made a timely and good faith effort to correct violations, was cooperative in the ethics proceedings, and had presented favorable character and reputation evidence.
The prior discipline was an aggravating factor. “Lawyers cannot stick their heads in the sand and blind themselves to their professional obligations,” the supreme court said in its opinion.
“Beauregard was previously disciplined for substantially the same books and records violations, and thus should have been in a hyper-vigilant state when he assumed the same supervisory responsibilities at his new law firm.”
During Beauregard’s six-month suspension, he will still be allowed to defend criminal cases assigned by the Office of Conflicts Counsel, which handles cases when the Public Defender’s office has a conflict.
Beauregard is represented by lawyer Myron Steele. Steele did not comment when contacted by the ABA Journal.
Updated at 9 p.m. to state in the second paragraph that the suspension is for six months, and to state that Steele did not comment.