Law Firms

McElroy Deutsch accuses former CFO of stealing millions from firm, also faults his attorney wife

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McElroy, Deutsch, Mulvaney & Carpenter contends in a June 27 lawsuit that former chief financial officer John Dunlea “systematically, surreptitiously and dishonestly” paid himself unauthorized bonuses estimated to be at least $1.6 million. Image from Shutterstock.

McElroy, Deutsch, Mulvaney & Carpenter is accusing its former chief financial officer of misappropriating more than $3.2 million from the law firm over a period of more than 10 years.

In a June 27 lawsuit, McElroy Deutsch contends that former CFO John Dunlea “systematically, surreptitiously and dishonestly” paid himself unauthorized bonuses estimated to be at least $1.6 million.

He and his wife, former firm employee Nicole Alexander, also treated themselves to lavish vacations in “business-card abuse” totaling more than $1.6 million, the suit alleges., Law360 and had coverage.

Dunlea, who began work at the firm in 2003, married Alexander in 2015. She began work at the firm as an associate in 2000 and later shifted to a job as director of business and professional development.

The firm thinks that Alexander was aware of the embezzlement given “the couple’s lavish lifestyle,” the suit said.

The couple live in a million-dollar home in Westfield, New Jersey, and they “took expensive vacations together, staying at the finest, most opulent hotels in the world,” the suit said.

Using the firm’s credit card, Dunlea and Alexander treated themselves to at least 60 vacations at luxury hotels, often flying first class, according to the suit.

Vacation destinations included the Hotel Coronado in San Diego; the Savoy in London; the Ritz in Paris; the Punta Cana resort in the Caribbean; Caneel Bay in the Virgin Islands; Disney World hotels in Orlando, Florida; the Hotel George V in Paris; the Boston Harbor Hotel; the Tampa Waterfront Resort; and various resorts in Ireland and Bermuda.

Firm credit cards were used to pay for vacations for some of Dunlea’s other relatives, including his children and ex-wife, the suit said.

Dunlea and Alexander also used their American Express firm credit cards to pay for large firm expenditures, allowing them to “amass substantial and valuable Amex points for their personal use,” the suit said.

Dunlea confessed to wrongdoing and apologized when the firm’s executive committee confronted him about the bonus overpayments, the suit said. His only explanation was that he needed the money for family obligations. He resigned to avoid firing in April 2023.

Dunlea cashed in his 401(k) plan and sent the firm $366,000 as a partial repayment for the bonuses, the suit said.

Alexander has filed a suit against McElroy Deutsch that said she was “completely unaware of any alleged financial malfeasance by her husband.” She and Dunlea have separate bank accounts, except for a joint account that they use to pay their mortgage.

Alexander doesn’t know how much alimony that Dunlea pays to his ex-wife, and she wasn’t aware that Dunlea was paying his ex-wife’s mortgage until after Alexander was fired, Alexander’s June 27 suit said.

Alexander said she thinks that the “temporal proximity” between her husband’s ouster and her firing suggests that she was fired because of her marital status, which is “suggestive of discriminatory animus.”

Dunlea’s lawyer, Bruce Nagel, didn’t immediately respond to the ABA Journal’s request for comment made by email and voicemail.

The McElroy Deutsch suit alleges breach of fiduciary duty, fraud and conversion.

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