And that decision, eventually, cost Randall Gilbert $1 million and his law career.
Gilbert has been disbarred, according to the Florida Bar discipline report, for failing to exercise proper control of Sacks as the embezzler stole $4.8 million from Gilbert's clients through the firm's trust account. The Federal Bureau of Prisons now exercises control of Sacks, 60, until June 2021 after he pleaded guilty to wire fraud.
"Whether Gilbert was aware of or personally involved in the theft is not the critical inquiry," the Florida Supreme Court stated in its disbarment decision. "Indeed, this case gives new meaning to the phrase 'turning a blind eye.' "
Sacks told Gilbert, who was referred to Sacks by a friend and client, he was a disbarred attorney and a CPA. As both the Supreme Court and the Referee's Report pointed out, minimal investigation would've pulverized those lies. The Referee's Report called Gilbert "curiously uncurious" regarding Sacks' past.
Whether Gilbert didn't do any fact-checking or did and chose to ignore Sacks falsehoods, it played a role in the disbarment decision.
Federal probation officer Jeffrey Feldman wasn't Gilbert's friend or client, but nobody gave Gilbert a bigger legal hint. Feldman made Gilbert sign a PROB 32 form two months after Gilbert hired Sacks. A PROB 32 formally states the employer knows the risks of employing the person on probation and the nature of the probationer's crimes.
Gilbert signed the form that stated Sacks had been convicted of 11 counts of wire fraud in 2002 and been sentenced to 41 months in prison with five years' probation and $7,906,332.14 in restitution.
Feldman told the Referee that despite the thousands of people he had supervised on probation, he'd required only a few dozen employers to sign a PROB 32.
"Officer Feldman also told Gilbert that he felt it was inappropriate for Sacks to be working at a law firm given Sacks’ history of fraud and embezzlement," the state Supreme Court's opinion read.
Feldman knew of what he spoke. Three months later, in July 2005, Sacks stole one of the firm's operating checks and forged Gilbert's signature to pay $20,950 for Sacks' girlfriend's cosmetic surgery.
Sacks returned the check before the surgery when Gilbert found out about it. Gilbert fired Sacks, but rehired him by October 2005. In the interim, he deflected Feldman's questions about Sacks' firing, knowing the check theft would get Sacks busted on a probation violation. Gilbert also didn't tell Feldman he'd made Sacks the chief financial officer for Gilbert & Caddy.
By 2010, Sacks was off probation and in charge of Gilbert & Caddy's real estate closing side. That's all the experienced embezzler needed.
As Sacks' federal court admission stated, he created a shell company, Sqwerty. Instead of wiring real estate closing money to pay off clients' mortgages, he wired the amounts out of the law firm's client escrow account at Chase Bank to the Chase Bank account for Sqwerty. Sacks hid the embezzlement by making the monthly payments on the mortgages.
Meanwhile, Gilbert kept a lax attitude toward Sacks. Bar discipline documents say he reviewed monthly account statements for two to four minutes per month. He thought Sacks' lifestyle upgrade came from his girlfriend's trust fund.
Gilbert knew nothing until he got a Feb. 27, 2014, call from an attorney wondering why a client's mortgage was still being paid when it should have been paid off. In the 12 days between that phone call and Gilbert closing the firm trust account, Sacks stole another $96,000.
"From February 2010, through March 2014, Sacks stole $4,750,708.70 from Gilbert’s trust account," the state Supreme Court said. "Of that amount, $4,542,410.70 benefited Sacks and other third parties to whom he gave stolen trust account funds. The difference, according to the Bar, $208,298.03, benefited Gilbert’s law firm.
"Old Republic was the single largest victim of Sacks’ thefts, paying out $3,612,374.10 in title insurance claims. Gilbert himself lost approximately $1 million when Sacks failed to pay off the original mortgage on Gilbert’s home when he and his wife refinanced it."
Gilbert self-reported Sacks' thievery to the Florida Bar. He stopped taking paychecks from the firm and devoted net profits to reimbursing those who suffered losses. He eventually dished out $1.03 million in reimbursements.
Still, the Supreme Court found Gilbert's absence of oversight and hiding of Sacks' firing from Feldman created the scenario for the fraud. So, the court rejected the Referee's recommendation of a two-year suspension and went for disbarment.
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He let an embezzler of $7.9 million handle his law firm's books. What could go wrong?
1 comment:
He's sorry now!
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