Thursday, June 12, 2008

Misplaced Trust Or Knowing Misconduct?

The Supreme Court of Washington imposed the sanction of a three month suspension for escrow account violations and failure to properly supervise a non-lawyer assistant who had embezzled  entrusted funds. The court concluded that suspension was appropriate for violations that it characterized as "knowing" misconduct. The court majority provides an extensive discussion of the application of its sanction standards. The result drew a sharp dissent from Justice Sanders, who was of the view that the lawyer was the victim, rather than the perpetrator, of the misconduct of the employee:

George Trejo allowed a trusted employee to access his client trust account.  This employee repaid Trejo's trust by embezzling from him.  Because of this theft, his client trust account ran a deficit and incurred an audit by the Washington State Bar Association.  But today the majority blames the victim of the theft and redoubles Trejo's loss.  His suspension is the result of his lack of distrust resulting in minor accounting errors.  However, Trejo should not be punished so severely for his naiveté that led to his victimization as "[t]hey that know no evil will suspect none." Since Trejo is the only victim of this theft, I must dissent...

Trejo negligently violated his ethical duties; however his actions did not harm his clients, unlike the harm this court causes thousands of clients annually.  We might be justified in suspending Trejo's accounting license, but admonition is the appropriate sanction for violating his ethical duties as a lawyer.  I refuse to join the majority's suspension of Trejo's license when his biggest flaw was misplaced trust in an employee who subsequently stole his money.

(Mike Frisch)

Bar Discipline & Process | Permalink

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