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Speak No Evil See No Evil Hear No Evil As an accountant and auditor through the years of working with attorneys and seeing some of the claims reported because of lack of controls I have always been amazed.  More than one attorney has decided that they only want to ‘practice law’ and leave the ‘business side of the law’ to lessors.  It is amazing to hear a sole practitioner state that it wasn’t his/her responsibility that his ‘trusted’ employee had stolen hundreds of thousands of dollars to play the Nigerian Lottery or to go buy a new car with the law firm’s trust account.

But Florida Attorney Randall Gilbert is in a class by himself when taking no responsibility and having no controls in place to prevent the theft of over $4.8 million by his employee/bookkeeper Sacks.  Sacks was referred to Attorney Gilbert by a friend.  Sacks had a checkered past, having been convicted of 11 counts of wire fraud, who at the time of his interview was living in a halfway house.  Sacks also claimed to be a ‘disbarred’ New York attorney and a CPA .

Attorney Gilbert was even told by Sacks’s probation officer that Sacks should not be working in a law office given his past.  Sacks had been sentenced to 41 months in prison followed by 5 years of probation and ordered to pay over $7.9 million in restitution.  Given all of this information Attorney Gilbert signed a ‘PROB 32’ form, formally acknowledging the risk of hiring Sacks as well aspects of his crimes.  Attorney Gilbert never checked on Sacks’s statements that he was a New York lawyer and a CPA.  If he had he would have found out these statements were not true.

In 2005 Sacks started his new job as the law firm’s bookkeeper.  Within 5 months Attorney Gilbert discovered a check for $20.950 had been forged under his signature by Sacks to pay for his girlfriend’s cosmetic surgery.  Gilbert had Sacks reimburse the firm and fired Sacks.  But Gilbert refused to inform the Federal Probation officer of the firing circumstances.  Later went on to tell the probation officer that the firing was a misunderstanding after Gilbert rehired Sacks.  Gilbert was worried that if he had told the probation officer of the Sacks transgression it might have violated Sacks’s probation.

After the 2008 mortgage crisis Gilbert’s foreclosure practice grew exponentially.   Sacks was given full control of this part of the law practice.  Gilbert was also aware that Sacks carried business cards with JD and CPA on them.  Gilbert was evidently not aware that Sacks was paying off Gilbert’s staff to keep quiet about the monies being funneled out of the law firm’s trust account.  Instead of paying off the mortgage with the funds received from the closings, Sacks would keep the mortgages open paying the installment mortgage payments for a period of time.  This allowed Sacks to drain the trust account of any funds not needed to service the open mortgages.  Gilbert also allowed Sacks to provide financial information, without any oversight by Gilbert, to title insurance underwriter (Old Republic) and the law firm’s CPA firm.

As with all good frauds this one started coming apart on February 27, 2014, when Gilbert received a call from an attorney asking why the attorney’s client mortgage that was paid and was kept alive for three months after it should have been satisfied.  Gilbert did investigate but chose not to close the trust account until March 11, 2014.  In those 12 days Sacks was able to steal an addition $95,000.

After the fact, it was discovered that Sacks had created the corporation SQWERTY to transfer funds into.  From February 2010 to March 2014, Sacks had transferred almost $4 Million out of the law firms trust account to SQWERTY.  According to the Florida Bar Sacks stole over $4.7 million from Gilbert’s trust account.   Old Republic was Sacks largest victim having to pay out over $3.6 million in title insurance claims.  Ironically, Gilbert lost approximately $1 Million when Sacks failed to pay off the original mortgage on Gilbert’s home when it was refinanced.

The referee recommended a 2 year suspension, but the Florida Bar filed a petition arguing that disbarment was appropriate.  The Florida Supreme Court disbarred Gilbert.

 

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