ATTORNEY FOR THE RESPONDENT ATTORNEYS FOR THE INDIANA SUPREME COURT
Julia Blackwell Gelinas DISCIPLINARY COMMISSION
Indianapolis, Indiana Donald R. Lundberg, Executive Secretary
Fredrick L. Rice, Staff Attorney
Indianapolis, Indiana
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In the
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Indiana Supreme Court
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No. 02S00-0707-DI-260
IN THE MATTER OF:
ANONYMOUS,
Respondent.
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Attorney Discipline Action
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November 13, 2007
Per Curiam.
Pursuant to Indiana Admission and Discipline Rule 23(11), the Indiana Supreme Court
Disciplinary Commission and Respondent have submitted for approval a "Statement of Circum-
stances and Conditional Agreement for Discipline" stipulating agreed facts and proposed disci-
pline. The Court approves the agreement and finds that Respondent engaged in attorney mis-
conduct by failing to make reasonable efforts to ensure that the conduct of a nonlawyer em-
ployee of his law firm was compatible with his professional obligations, which failure resulted in
theft from the firm's client trust fund.
The Respondent's 1978 admission to this state's bar subjects him to this Court's
disciplinary jurisdiction. See IND. CONST. art. 7, § 4.
U U For his misconduct, we find that
Respondent should receive a private reprimand.
Background
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Beginning no later than 1980, Respondent's wife served as the accountant and
bookkeeper for Respondent's two-person firm. During the time relevant to this action,
Respondent was the partner with primary responsibility for the firm's finances. During this
period, Respondent's wife had control over the firm's trust account and Respondent exercised no
active supervision over her. Over a period of five months beginning in May 2005, Respondent's
wife wrote unauthorized trust account checks totaling $22,257 to herself or to accounts to which
she had access, forging Respondent's signature on the checks. When Respondent and his partner
became aware of and confronted Respondent's wife about trust account overdrafts, she admitted
to the misappropriations and repaid the funds in full to the trust account by November 2005.
The parties agree that there are no facts in aggravation. They agree to the following facts
in mitigation: (1) Respondent has no prior disciplinary history; (2) Respondent fully cooperated
with the Commission; and (3) Respondent immediately took steps to ensure the complete
repayment of trust account funds.
The parties agree that Respondent violated the following Indiana Professional Conduct
Rules:
5.1(a): Failure of a partner or lawyer with managerial authority to make
reasonable efforts to ensure the firm has in effect measures to assure all lawyers in
the firm conform to the Rules of Professional Conduct.
5.3(a): Failure to make reasonable efforts to ensure that the lawyer's firm has
taken measures to assure that a nonlawyer employee's conduct is compatible with
the professional obligations of the lawyer.
5.3(b): Failure to make reasonable efforts to ensure that the conduct of a
nonlawyer employee over whom the lawyer has direct supervisory authority is
compatible with the professional obligations of the lawyer.
The parties suggest the appropriate sanction for Respondent's misconduct is a private
reprimand.
Discussion
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A lawyer shall hold property of clients or third persons that is in a lawyer's
possession in connection with a representation separate from the lawyer's own
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property. . . . Complete records of such account funds and other property shall be
kept by the lawyer . . . .
Prof. Conduct R. 1.15(a). A lawyer should hold property of others with the care required of a
professional fiduciary, and the lawyer should maintain on a current basis books and records in
accordance with generally accepted accounting practice and comply with any recordkeeping
rules established by law or court order. See Prof. Conduct R. 1.15(a), cmt. [1]. Lawyers in a
supervisory position must make reasonable efforts to ensure nonlawyer employees' conduct is
compatible with the professional obligations of the lawyer, see Prof. Conduct R. 5.3, including
the obligation to preserve and safeguard funds in client trust accounts. Failure to have proper
internal controls, even for a long-time, trusted, non-attorney employee who is a close relative of
the attorney, is a breach of the attorney's fiduciary obligation to clients in managing a trust
account. 1
F
Although Respondent was negligent in supervising the firm's trust account, he took
immediate and effective action to protect clients and rectify the situation once his wife's
misappropriations came to his attention, and he cooperated fully with the Commission. Under
these circumstances, the Court concludes that a private reprimand is an appropriate sanction.
Conclusion
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The Court, having considered the submission of the parties, now APPROVES and OR-
DERS the agreed discipline. For Respondent's professional misconduct, the Court imposes a
private reprimand. The costs of this proceeding are assessed against Respondent.
The Court directs the Clerk to forward a copy of this Opinion to the hearing officer, to
Respondent or Respondent's attorney, and to the Indiana Supreme Court Disciplinary Commis-
sion.
All Justices concur.
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The parties in this case agree that one way of satisfying this obligation is to ensure either that an attorney
routinely opens and reviews bank statements or that there be a system in place, supervised by an attorney,
to ensure that no single non-attorney employee has access to the trust account checks and ledger while
also being the first to open and review the bank statements.
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