Summary: Florida attorney Randall Gilbert must suffer the consequences of being disbarred after he made a stupid choice of hiring a convicted embezzler that then stole from his law firm too.
Once an embezzler, always an embezzler. Or at least this is what one attorney has learned was true in his instance. Randall L. Gilbert, a Hollywood, Florida attorney, hired a man currently living in a halfway house after serving prison time for embezzlement to handle his law firm’s finances. Gilbert met Steven Sacks in 2005, setting in place the events that would lead to his disbarment, according to the Miami Herald.
Hiring Sacks to handle the accounting books at Gilbert’s law practice, Gilbert & Caddy, ended up costing Gilbert $1 million plus his career. Gilbert was ultimately disbarred by the Florida Bar for failing to exercise proper control of Sacks, who stole $4.8 million from clients through Gilbert’s trust account.
Sacks, 60, pleaded guilty to wire fraud, putting him under control of the Federal Bureau of Prisons until June 2021. The discipline report for Gilbert’s disbarment read, “Whether Gilbert was aware of or personally involved in the theft is not the critical inquiry. Indeed, this case gives new meaning to the phrase ‘turning a blind eye.’”
A friend and client of Gilbert’s introduced him to Sacks, who told him he was a CPA and disbarred attorney. This was not true, according to the Supreme Court and Referee’s Report. The Referee’s Report even noted that Gilbert was “curiously uncurious” about Sacks past actions. Either Gilbert did not conduct any fact-checking into Sack’s claims or did learn about who Sacks’ really was but did not care.
Federal probation officer Jeffrey Feldman did not know Gilbert but gave him a clear sign of what legal troubles he was getting himself into with Sacks. Two months after hiring Sacks, Feldman made Gilbert sign a PROB 32 form, which ensures the employer understands the risks of employing a person on probation and their nature of the probationer’s crimes. The form Gilbert signed explained that Sacks had been convicted in 2002 of 11 counts of wire fraud, sentenced to 41 months in prison and five years’ probation plus $7,906,332,14 to be paid back in restitution.
Feldman told the Referee that he in the thousands of cases he supervised, he had only required a few dozen employers to sign the form. The State Supreme Court added, “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.”
Feldman’s warning was not without merit. Just three months later, Sacks stole a check from the firm, forging Gilbert’s signature so he could pay $20,950 for his girlfriend’s cosmetic surgery. Gilbert found out about the theft so Sacks returned the check before the surgery. Gilbert fired him but ended up hiring Sacks back just a few months later in October 2005. In the meantime, he avoided Feldman’s questions about why Sacks had been fired because he knew that Sacks would be in trouble for violating his probation. Gilbert also failed to tell Feldman that he made Sacks the chief financial officer of the law firm.
Sacks was off probation by 2010 and in charge of the law firm’s real estate closing department. This position enabled the master embezzler to do more. He created a shell company, Sqwerty. When he was supposed to be wiring real estate closing money for clients’ mortgages, he was actually wiring money from the law firm’s client escrow account at Chase Bank to his company’s account at Chase Bank. He hid his actions by continuing to make monthly payments on the mortgages.
Gilbert made it appear that he was keeping an eye on Sacks, quickly looking over account statements each month. When Sacks started living a fancier lifestyle, Gilbert wrote it off as being financed by Sacks’ girlfriend’s trust fund.
It wasn’t until February 27, 2014 that Gilbert truly understood that something was amiss, even then he took too long to take action. A fellow attorney called Gilbert asking why their client’s mortgage was still being paid when it should have been paid off. In the 12 days between receiving that phone call and Gilbert closing the firm’s trust account, Sacks had stolen another $96,000.
The state Supreme Court wrote, “From February 2010, through March 2014, Sacks stole $4,750,708.70 from Gilbert’s trust account. 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 tried to save face by self-reporting the theft to the Florida Bar. He stopped accepting paychecks from the firm and instead put the net profits to reimbursing those who lost money. He has paid out $1.03 million in reimbursements.
Despite Gilbert’s efforts, his absence of oversight and deception with Feldman was cause for the Supreme Court to call the situation fraud and disbar the attorney. The Referee’s Report had recommended a two-year suspension but the state Supreme Court felt Gilbert had seen plenty of opportunities to prevent Sacks from embezzling thousands.
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To learn more about attorneys disbarred over embezzlement, read these articles:
- Tax Attorney Steven Etkind Indicted for Embezzlement
- Attorney Nichole A. Collins Charged with Embezzlement and Burglarizing
- Disbarred Attorney Embezzles $737K From Milwaukee Law Firm
Photo: law.com