California Bar Journal
CBJ - November 2008 #08.
State Bar reports possible embezzlement of rent money
California Bar Journal November 2008 State Bar reports possible embezzlement of rent moneyThe State Bar has reported to the Special Crimes Unit of the California Department of Justice in San Francisco the possible embezzlement by a long-term former employee of rents received from tenants at the bar's 180 Howard St. headquarters. The bar requested the DOJ to assume jurisdiction due to the bar's state agency status and the Special Crimes Unit's expertise with white collar financial crime investigations. The DOJ criminal investigation is independent of the bar's own internal investigation.
Bar officials alerted the board of governors Audit Committee when discrepancies in tenant rents were discovered. The committee promptly retained an outside audit firm to determine the extent of the loss and to evaluate the bar's internal controls. Preliminary audit results indicate that several hundred thousand dollars may be involved.
The State Bar's primary source of revenues - attorney licensing and other fees - are unaffected. The loss is limited to real property tenant rent revenues in San Francisco. The full extent of the loss is still being quantified as well as how the employee evaded internal controls.
The State Bar is audited annually by independent financial auditors and every other year by the California State Auditor.
"This is a situation of major concern which has been reported to law enforcement authorities and is being fully...