Sunday, January 15, 2017

Dishonest vs. Mere Grossly Negligent Misappropriation? State Bar Probes Into $955K Of Missing Client Funds Allegedly Never Deposited By Attorney Into Her Trust Account

In Bakersfield, California, reports:
  • A local family law attorney is accused by the State Bar of misappropriating nearly $1 million that was supposed to be held in trust on behalf of a client.

    Heather Stanley took two checks totaling $1,052,311.57 and deposited them into an account she controlled at Kern Schools Federal Credit Union, according to documents filed by The State Bar of California on Dec. 5.

    She was supposed to maintain the full amount on behalf of the client, but "dishonestly or grossly negligently misappropriated" $955,000 for her own purposes, the documents said.

    According to the documents, the checks were received on or about Aug. 5, 2010 and May 2, 2011. Stanley failed to give the client an appropriate accounting of the funds, despite eight requests issued by the client, the documents allege.

    The misappropriation of the funds occurred between July 25, 2013, and Nov. 14, 2013, the documents said.

    Stanley wrote to a state bar investigator in August that she purchased cashier's checks and had returned all the funds to the trust held on behalf of her client, documents said. She also provided a "client ledger card" to show the funds had been disbursed.

    Those statements were false, the state bar said in its filing.

    The state bar filed notice of disciplinary charges including failure to deposit the funds in a trust account, misappropriation, failure to maintain client funds and misrepresentation. The filing said she had 20 days to file a response.
Source: Local attorney accused of misappropriating nearly $1 million.
(1) The California State Bar's Client Security Fund is a public service of the California legal profession. The State Bar sponsored the creation of this fund to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.