{"id":16472,"date":"2010-02-08T06:00:33","date_gmt":"2010-02-08T12:00:33","guid":{"rendered":"http:\/\/www.sequenceinc.com\/fraudfiles\/?p=16472"},"modified":"2015-04-23T08:25:21","modified_gmt":"2015-04-23T13:25:21","slug":"office-theft-cases-illustrate-importance-of-oversight","status":"publish","type":"post","link":"https:\/\/www.sequenceinc.com\/fraudfiles\/office-theft-cases-illustrate-importance-of-oversight\/","title":{"rendered":"Office Theft Cases Illustrate Importance of Oversight"},"content":{"rendered":"

\"WIJane Pribek – Wisconsin Law Journal<\/em><\/p>\n

Beaver Dam attorney James H. Olson, of Olson Law Offices LLC, got a sick feeling when a letter from a nearby community bank arrived at his home. The letter was from the bank vice-president, who told Olson that his assistant had been cashing checks on an account that Olson never created. The VP tried to contact Olson at his office, but the calls never went through.<\/p>\n

Olson went to the bank the next day and learned that this had been going on for quite some time.<\/p>\n

\u201cIt was the Friday of Labor Day weekend. I suddenly don\u2019t have a secretary. I\u2019m thinking of everything I have [to review]: what\u2019s gone in and out of the trust account, the accounts receivables. Plus I\u2019ve got client work to do, and a brief was due the following week,\u201d Olson recalled. All told, his assistant of about 18 months had stolen approximately $20,000. It took Olson\u2019s newly-retired wife about 90 days, working all day long, to piece together their losses. The now-former assistant had covered her tracks very well. In Olson\u2019s case, staff was to blame. In another, more recent case, a Twin Cities lawyer was disbarred after pleading guilty to swindling the Bloomington law firm he and three other lawyers founded in 2005.<\/p>\n

Thomas A. Rothstein was charged with thefts from Halberg Criminal Defense totaling $124,258. Rothstein allegedly used firm checks and credit cards for personal expenses, including flowers, iTunes and fitness club bills. Rothstein was the only lawyer at the firm who spent much time with QuickBooks, the firm\u2019s financial software, according to Brent Schafer, who now serves as the firm\u2019s managing partner. Schafer said the firm has since added several levels of internal review, as well as some outside oversight.<\/p>\n

\u201cGiving one person control over one area is a great leap of faith,\u201d he explained.<\/p>\n

Schafer said the silver lining in the Rothstein case was that none of the firm\u2019s clients lost any money.<\/p>\n

Olson\u2019s former assistant was tried and convicted of felony theft, and he had luckily secured theft coverage. The insurer paid out $10,000, and at the assistant\u2019s sentencing Olson received a check for $20,000 as restitution. In the end, other than the time he and his wife spent calculating their losses and pursuing prosecution, he was made whole. Fortunately, there were no trust account issues.<\/p>\n

Focus on the business end<\/strong>
\nThe Rothstein and Olson cases illustrate the potential problems that law firms face when trusted employees, including attorneys, cross the line into theft or fraud. Lawyers often want to concentrate on their professional roles, but they ignore the business side at their peril, said attorney Sally E. Anderson, of Wisconsin Lawyers Mutual Insurance Company in Madison.<\/p>\n

Employee theft can be motivated by many things, said Deborah M. Smith, chair of the State Bar Committee that administers the Wisconsin Client Protection Fund, but \u201cit\u2019s often related to substance abuse and addictions, and the need for quick cash to satisfy whatever their problem may be.\u201d Olson later learned his assistant had a gambling addiction.<\/p>\n

\u201cI think we need to do a better job of taking care of one another when we see signs of distress,\u201d said Smith. \u201cReach out; ask if there\u2019s anything you can do to help; or reach out to WisLAP, to help prevent someone from going down the road of taking client funds.\u201d<\/p>\n

Here are some other suggestions that can help protect your firm:<\/p>\n