Dishonest vs. Mere Grossly Negligent Misappropriation? State Bar Probes Into $955K Of Missing Client Funds Allegedly Never Deposited By Attorney Into Her Trust Account
- 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.
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:
- Directory Of Lawyers' Funds For Client Protection (August 2016) (now includes Canadian recovery funds, courtesy of the American Bar Association);
- Check the USA Client Protection Funds Map;
- Check the Canada Client Protection Funds Map.