IN THE SUPREME COURT OF FLORIDA (Before a Referee) REPORT OF REFEREE

Transcription

1 IN THE SUPREME COURT OF FLORIDA (Before a Referee) THE FLORIDA BAR, Complainant, v. CASE NO.: SC TFB NOS.: ,429(12C) ,531(12C) GERI LYNN HALLERMAN WAKSLER, Respondent. / REPORT OF REFEREE I. Summary of Proceedings: The undersigned was duly appointed as Referee in these proceedings. The parties have agreed to a Conditional Guilty Plea for Consent Judgment, which I recommend that the Court accept. Any pleadings, notices, motions, orders, transcripts, and exhibits are forwarded to The Supreme Court of Florida with this report and constitute the record in this case. The following attorneys appeared as counsel for the parties: For The Florida Bar: Lisa Buzetti Hurley For The Respondent: Stephen Christopher Whalen Respondent participated fully in this proceeding. II. Findings of Fact: I adopt the stipulated facts as set forth in the Conditional Plea for Consent Judgment as my findings of fact, as follows: Respondent was a partner with the law firm of Moore & Waksler, P.L., formed in The sole signators on the firm s trust accounts were Mr. Moore and Ms. Waksler who were solely authorized to initiate wire transfers, except during a period from 2007 or 2008 when a non-equity partner in the firm also had signature authority. Deposits, withdrawals and posting to ledgers were handled by one employee and a second employee, Angela Dees, (the office manager) was responsible for reconciling those accounts. Upon advice of the firm s certified public accountant, the firm segregated these responsibilities to establish a further check and balance. Once a month the firm s financial statements were reviewed. 1

2 Each attorney received a trust report detailing the status of their clients trust account funds, and Respondent received a copy of each attorney s trust account report. Ms. Dees prepared the reports that Respondent reviewed and had control over the original bank statements. In late 2006, the firm engaged certified public accountant Geoffrey Lorah of Webb, Lorah and Company, PL, to perform an independent audit on the firm s trust account. The report furnished by Ms. Dees to the firm from Mr. Lorah in early 2007 indicated only minor procedural deficiencies. It was however later determined that the version of Mr. Lorah s report provided to Moore and Waksler had been altered by Ms. Dees. In June 2008, Ms. Waksler received a call from a Moore & Waksler, P.L. client, Associated Real Estate Southwest Inc. (A.R.E.S.), who advised that a wire transfer of approximately 1.6 million dollars made in May 2008 had not been received. The client deposited the funds into the firm s trust account as part of the conclusion of a Section 1031 tax free exchange, which funds were to have been wired from the firm s trust account to the client s bank account, on demand. Ms. Dees was given the responsibility to handle the matter. Ms. Dees presented to the firm and the client a series of documents from the bank which were later discovered to be forgeries, in furtherance of covering up her criminal activity, including a copy of a forged cashier s check from the bank that Dees advised was to be sent to the client by overnight delivery in August When the check was not received by the client, Ms. Waksler began attempting to track down the UPS transmission, personally discussing the matter with a customer service agent who verified that they were conducting a search for the missing package which was ultimately never located. In October 2008 it was determined that through a series of fraudulent wire transfers and fraudulent documents, including fraudulently signed bank account authorization documents, Ms. Dees had misappropriated approximately two million dollars from the firm s bank account over the course of her employment between 2003 and Ms. Dees had deleted a significant amount of data related to the bank accounting from the firm s computer before her criminal conduct was discovered by Respondent. The firm had to reconstruct the accounting. Respondent retained Robert L. Wenzel, CPA, to conduct an extensive examination of the firm s trust 2

3 accounts and it is Mr. Wenzel s opinion that Ms. Dees fraudulent scheme was so sophisticated he doubts he would have detected it had he been reviewing the trust account records at the time. Following the discovery of Ms. Dees criminal conduct, Respondent learned that Mr. Lorah s actual report had identified major discrepancies in the firm s trust account (approximately a half million dollar discrepancy). That report was sent to the firm in early 2007, after notifying Ms. Dees that it was being mailed. Associated Real Estate Southwest Inc. (A.R.E.S.) filed suit against the firm on October 15, 2008 regarding approximately $1,647, entrusted to the firm which could not be delivered upon demand. Respondent has entered into a settlement agreement with A.R.E.S. pursuant to which approximately 55% of the total claimed has been repaid. Respondent further agreed to assign 84.4% of her rights to potential future net recoveries from certain pending lawsuits Respondent and the firm have or could have filed regarding the matter, providing A.R.E.S. the potential to be made whole at some point in the future. Palm Isles Condominium Development, L.L.C. (P.I.C.D.) filed suit against the firm on May 19, 2009 regarding approximately $304, entrusted to the firm which could not be delivered upon demand. Respondent has entered into a settlement agreement with P.I.C.D. pursuant to which approximately 55% of the total claimed has been repaid. Respondent further agreed to assign 15.6% of her rights to potential future net recoveries from certain pending lawsuits Respondent and the firm have or could have filed regarding the matter, providing P.I.C.D. the potential to be made whole at some point in the future. John and Margaret Merrett filed a complaint with The Florida Bar on May 20, 2009 regarding approximately $1, entrusted to the firm which could not be delivered upon demand. Respondent and Mr. Moore have fully repaid John and Margaret Merrett from their personal funds. All other clients had returned to them 100% of their funds owed from escrow. Significant amounts of money were being entrusted to the firm. The misappropriated transactions in the Moore & Waksler Trust accounts represented less than one-third (1/3) of one percent (1%) of all transactions. 3

4 Rule 5-1.1(a)(1) (Nature of Money or Property Entrusted to Attorney) states: A lawyer shall hold in trust, separate from the lawyer s own property, funds and property of client or third persons that are in a lawyer s possession in connection with a representation. Rule 5-1.1(e) (Notice of Receipt of Trust Funds; Delivery; Accounting) states: Upon receiving funds or other property in which a client or third person has an interest, the lawyer shall promptly notify the client or third person. Except as stated in the Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive, and upon request by the client or third person, shall promptly render a full accounting regarding such matter. Respondent has the ultimate responsibility for dealing with client property entrusted to the firm. The criminal activity of Respondent s employee which went undetected for a significant period of time resulted in failure of certain client funds to be held in trust and in Respondent being unable to deliver certain funds demanded by certain clients. Respondent was licensed to practice law in September, 1991 and has spent her entire career practicing law in Punta Gorda, Florida. She has no prior grievance record. Respondent has an esteemed reputation within the legal community in which she practices. Respondent self reported the matter to The Florida Bar in October 2008 and has had a cooperative attitude toward this disciplinary proceeding. Mr. Moore and Ms. Waksler have personally spent over one hundred thousand dollars ($100,000.00) in a good faith effort to replace any client funds that were missing from the trust accounts. Respondent is remorseful that this situation occurred despite the systems and procedures the firm had in effect to insure compliance with The Florida Bar s rules regulating trusts accounts. Respondent has taken additional measures to prevent this situation from occurring again. Respondent did not intentionally violate the Rules Regulating The Florida Bar. III. Recommendations as to Guilt: I recommend that Respondent s Conditional Guilty Plea for Consent Judgment be accepted and Respondent be found guilty of violating Rule (Trust Accounts) of the Rules Regulating The Florida Bar. 4

5 IV. Standards for Imposing Lawyer Sanctions: I considered the following Standards prior to recommending discipline: 7.0 Violation of Other Duties Owed as a Professional Standard 7.3 Public Reprimand is appropriate when a lawyer negligently engages in conduct that is a violation of a duty owed as a professional and causes injury or potential injury to a client, the public, or the legal system. V. Case Law: I considered the following case law prior to recommending discipline: The Florida Bar v. Stanton, Supreme Court Case No. SC06-408: Court approved the referee s findings of fact and conclusions of law, but rejected the referee s recommendation for a public reprimand and ordered that Stanton receive an admonishment. An employee of Stanton, without his knowledge or consent, stole over one million dollars from his law firm s trust account(s) which went undetected for six years. Stanton had regular meetings with the employee concerning the trust accounts; however, the employee was falsifying reports and reconciliations in furtherance of her illegal activities. Upon learning of the theft, Stanton took remedial action to ensure any missing funds were replaced and no clients suffered harm as a result of the employee s theft. Stanton had no disciplinary history and had a number of mitigating factors applicable to his case. The Florida Bar v. Weiss, 586 So.2d 1051(Fla. 1991): Weiss was found to be grossly negligent in handling of his client trust accounts through failure to properly supervise his accountant s work resulting in negative trust balances. Court noted the absence of evidence that Weiss had intentionally and knowingly converted and misappropriated trust funds and no client suffered a loss. Weiss had no prior disciplinary history. Weiss received a six-month suspension. The fact that the violations of the rules regulating trust accounts were caused by the intentional illegal acts of an employee who was affirmatively attempting to avoid detection distinguishes this case from The Florida Bar v. Weiss in which suspension was imposed. Respondent s law firm had sufficient systems and procedures in effect to insure compliance with the rules regulating trust accounts if they had been followed and has taken additional measures to prevent this situation from occurring again. 5

6 VI. Recommendation as to Discipline: I recommend that the discipline agreed to in the Conditional Guilty Plea for Consent Judgment and set forth as follows be accepted as follows: Public Reprimand to be administered before the Board of Governors of the Florida Bar. VII. Personal History and Past Disciplinary Record: In recommending approval of the Conditional Guilty Plea for Consent Judgment, I considered the following personal history and prior disciplinary record of Respondent, to wit: A. Personal History of Respondent: Year of Birth: 1961 Date Admitted to Bar: September 23, 1991 The Referee notes that Respondent is not certified in any area of practice. B. Aggravating Factors: There were no aggravating factors. C. Mitigating Factors: The following Mitigating Factors were considered: this matter: 9.32(a) absence of a prior disciplinary record; 9.32(b) absence of a dishonest or selfish motive; 9.32(d) timely good faith effort to make restitution or to rectify consequences of misconduct; 9.32(e) full and free disclosure to disciplinary board or cooperative attitude toward proceedings; 9.32(f) character or reputation; and 9.32(l) remorse. VIII: Costs: I find the costs set forth in The Florida Bar s Motion to Assess Costs filed in this cause were reasonably incurred and were not unnecessary, excessive or improperly authenticated and Respondent stipulated to the payment of such costs incurred by The Florida Bar. 6

7 It is recommended that the costs itemized in The Florida Bar s Motion to Assess Costs in the total sum of $2, be charged to Respondent and that interest at the statutory rate shall accrue and be deemed delinquent 30 days after the judgment in this case becomes final unless paid in full or otherwise deferred by the Board of Governors of The Florida Bar. Dated this 11 th day of February s/ Honorable Edward Nicholas, Referee Copies To: Lisa Buzzetti Hurley, Bar Counsel, The Florida Bar, 4200 George J. Bean Pkwy., Ste. 2580, Tampa, Florida 33607; Stephen Christopher Whalen, Esquire, Attorney for Geri Lynn Hallerman Waksler, Respondent, 1968 Bayshore Boulevard, Dunedin, Florida 34698; and Kenneth Lawrence Marvin, Staff Counsel, The Florida Bar, 651 E. Jefferson St., Tallahassee, Florida