Bar hearing reveals ex-partner’s money, sex habits

Posted Dec. 14, 2010, at 6:14 a.m.

LEWISTON, Maine – A former partner of a prominent Portland law firm who went to prison for stealing from his firm and clients was “a complete emotional wreck” and having an affair, sending sexually explicit e-mails and surfing pornographic websites, a witness testified in court Monday.

It was the first day of a hearing in 8th District Court brought by the Maine Board of Overseers of the Bar, which is seeking sanctions against six lawyers for allegedly failing to take swift and appropriate action against the former partner, John Duncan. Maine Supreme Judicial Court Justice Donald Alexander presided over the procedure.

Duncan was convicted in 2008 and served two years in prison for two counts of theft, totaling nearly $300,000. More than one-third of that amount was stolen from six of the firm’s clients. The remainder represented fees that should have been paid to the firm, but were deposited by Duncan into his bank account.

David Warren, the former managing partner at Verrill Dana, said Monday that Duncan’s legal secretary first reported in early June 2007 his questionable check-writing and use of the firm’s Internet. Warren said he was told by someone at the firm that Duncan was having a homosexual affair, sending sexually explicit e-mails and surfing pornographic websites on the firm’s computer.

But it wasn’t until nearly five months later that Duncan was forced to resign from the firm and his actions were reported to authorities. And it wasn’t until that time that a client’s estate, from which Duncan had been embezzling, was finally reimbursed.

Warren said he worried about Duncan’s fragile mental state.

J. Scott Davis, counsel for the Bar, began presenting his case Monday against Warren and five other lawyers who comprised the law firm’s executive board.

In his opening remarks, Davis said the firm “should have reported this from the get-go,” but waited for months to report what Duncan’s legal secretary, Eleanor Rommel, had already figured out, that Duncan was stealing from his client’s estate.

Warren testified that when he confronted Duncan in late June about the checks written on the account of the estate of Janice Thomas, a client, Duncan answered three questions: Did the checks Duncan wrote to himself from the Thomas account represent fees properly owed to the firm? Were the fees the proper amount? Were there any other cases of him writing and depositing improper checks?

Warren said Duncan answered yes to the first two questions and no to the third. Warren said he believed Duncan, saying he had “absolutely unquestioned” credibility.

Duncan promised to “pay it all back” and offered to write a check on the spot, Warren said.

When asked why he did it, Warren said Duncan told him: “‘Bad judgment, very bad judgment.’”

Duncan was embarrassed and distraught, Warren said, and offered to leave.

Warren told him not to resign yet. He said he wanted to find out more about the extent of Duncan’s violation of firm policy about turning over to the firm fiduciary fees paid to the firm’s attorneys.

Warren said whenever he saw Duncan after that, Duncan appeared to have come unhinged. He was “falling apart,” Warren said, “extremely distraught, extremely upset.” He was often seen reading the Bible at his desk.

Fearing Duncan might commit suicide, Warren said he was reluctant to press the matter and confront Duncan further.

“He was a complete emotional wreck,” Warren said. “I did not want to be responsible for pushing him over the edge.”

Warren had told James Kilbreth III, chairman of the executive board about Duncan and kept him abreast of developments. In July, they informed the firm’s executive board, which agreed unanimously with Warren’s recommendation not to ask for Duncan’s resignation. He said he didn’t believe Duncan had done anything illegal.

Warren said he didn’t believe Duncan was a threat to the firm’s clients until that fall, when it was revealed there were more financial discrepancies linked to Duncan, who had apparently lied to Warren about the extent of his deception. Under questioning, Warren said he could have been more thorough sooner in his investigation.

The hearing is expected to continue Tuesday with the testimony of Rommel and other non-attorney staff at the firm.

Copyright (c) 2010, Sun Journal, Lewiston, Maine

Distributed by McClatchy-Tribune Information Services.

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