Delaware Attorney Suspended and Banned from Reviewing Financial Records
The managing partner of a Delaware law firm has been suspended and permanently banned from reviewing or overseeing his law firm’s financial records after the state supreme court concluded he didn’t learn his lesson about the need to supervise bookkeepers. Andre Beauregard, the managing partner of Brown, Shiels & Beauregard has been suspended for six months beginning July 2 for failing to take remedial action to correct bookkeeping errors. He also filed inaccurate certificates stating that the law firm had complied with accounting requirements.
Beauregard was publicly reprimanded in 2005 for failing to supervise client funds following an investigation that found an employee stole $140,000 from his prior law firm. During that time, Beauregard’s mother and father-in-law both passed away, and he underwent shoulder surgery, and was also “diagnosed with a debilitating medical condition.” The reprimand ordered him to dissolve the firm, which he did.
In the new disciplinary action, the Delaware Supreme Court said Beauregard was aware of his responsibilities because of what had occurred over a decade ago. The partner had evidently reviewed trust account records each month, but the court found “that review could not have been done with any precision” because there were negative balances for at least four clients over a five-month period ending in April 2015.
Beauregard raised the issue with the employee handling the firm’s accounts and was told the negative balances were a “glitch in the program” and had nothing to do with missing money. The employee later testified that there had been some overpayments, resulting in the negative balances.
A client filed a complaint with the Office of Disciplinary Counsel in March 2015 after receiving two $1,000 checks in a retainer refund, when there should have been just one check. Beauregard suspended the employee after reviewing the accounts and hired two new bookkeepers.
The new employees said there were no missing funds. However, a compliance audit in 2015 found some problems, including issues with bank reconciliations, with failing to remove earned fees from accounts, and with negative client balances in a fiduciary account of about $8,000 every month.
Beauregard addressed the deficiencies, hired inside and outside bookkeepers, upgraded the firm’s accounting software, and increased the time he spent supervising nonlawyer employees. According to the court, Beauregard did not have a dishonest, self-serving motive, made a timely and good faith effort in reviewing and attempting to correct violations, was cooperative throughout, and had presented favorable character and reputation evidence.
However, the prior violation weighed heavily in the final decision. “Lawyers cannot stick their heads in the sand and blind themselves to their professional obligations,” the supreme court said in its opinion. “Beauregard was previously disciplined for substantially the same books and records violations, and thus should have been in a hyper-vigilant state when he assumed the same supervisory responsibilities at his new law firm.”
During Beauregard’s six-month suspension, he will still be allowed to defend criminal cases assigned by the Office of Conflicts Counsel. However, according to the order, when the suspension is up, “Mr. Beauregard is permanently barred from maintaining his or a law firm’s books and records or acting in a supervisory capacity over the law firm’s books and records.”