State v. Mr. A (DMC No. 9146) – Felony Embezzlement/RICO ($88,000 Misappropriated from Law Firm), Felony Fraudulent Schemes & Felony Theft – Not Charged – Resolved with Civil Settlement – Scottsdale Police Department Investigated (DR#20XX-XXXX2); Maricopa County Superior Court, Civil Division (Case No. CV2008-015240).
Mr. A. owned a collection service business. He contracted with a local Phoenix law firm to conduct their collections regarding overextended accounts receivables. Things were not going well at first, and Mr. A. convinced the law firm to let him take over all of the bookkeeper’s duties. This gave him access to all of the law firm’s bank accounts and he was authorized to sign checks into a bank (cost account) only. Over the course of a two month span, he began transferring all of the law firm’s money into various accounts. He would then use electronic transfers, write checks or use “check by phone” transfers to transfer money to himself. These were monies that he was not entitled to.
In addition, Mr. A. began charging the law firm for overhead incurred while working on the law firm’s accounts. The law firm received no benefit for this and they had no idea that this was going on. In essence, Mr. A. was “padding” the bills. The total amount of loss for the two months totaled $88,000. Once this was discovered, Mr. A. secured our services.
We began negotiating with the lawyer who was working on behalf of the law firm. As we were in Settlement negotiations, they filed a Civil Lawsuit against Mr. A., which included accusations of, among other things; RICO, Theft, Breach of Contract and Breach of Fiduciary Duty. We were eventually able to work out a Settlement with the law firm and they agreed that this appeared to be a situation of a miscommunication and bad bookkeeping practices. They decided that they were not going to seek any criminal charges against Mr. A. Initially, he could have been facing mandatory prison time, however, he has no criminal charges on his record.
