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Calif. Bar Staffer Stole $675,000 Over 8 Years, Says State AG
The Recorder
April 09, 2009
For about eight years, Sharon Pearl collected rent from the tenants leasing space in the California Bar building at 180 Howard St. in San Francisco. Only it may have been going into her own pockets.
Late Monday, the attorney general's office filed embezzlement and tax evasion charges against the State Bar's former director of real property, and accused her of keeping more than $675,000 in rent and related payments by tenants.
"The defendant managed to get away with embezzling money from right under the noses of her co-workers for years," Attorney General Jerry Brown said in a prepared statement. "She was responsible for collecting rent from tenants. But instead of turning over the rent to the State Bar, she decided to use the money for a lavish lifestyle."
Pearl couldn't be reached for comment on Tuesday. An Oakland telephone number listed for her had been disconnected, and Fremont, Calif., lawyer Leon Mezzetti, whom the AG's office said is representing her, didn't return a call seeking comment.
Pearl, who was fired on Oct. 3, is expected to turn herself in to the Alameda County Sheriff's Department and be booked on $80,000 bail. According to the court clerk's office, Pearl is set to be arraigned at 8:45 a.m. Monday before Alameda County Superior Court Judge Robert McGuiness.
If convicted, she could face up to nine years in state prison, the AG's press statement said.
State Bar Deputy Executive Director Robert Hawley, to whom Pearl sometimes reported, said the alleged theft stunned Pearl's fellow employees, and he said in hindsight someone should have noticed what was going on.
"The truth is Sheri was a highly trusted employee who had created an image of herself as an enforcer around here and had gained the complete trust of the whole organization," he said. "She was an instrumental architect in designing the controls around the rent-control process. In a way, she was kind of a mole. It was an absolutely shocking betrayal."
According to court documents, Pearl had worked for the Bar since 1996.
Hawley said the State Bar has filed a claim under its theft loss insurance policy and also intends to seek restitution in criminal court. He said the State Bar also sued Pearl in Alameda County Superior Court to preserve her assets for possible recoupment.
According to the AG's press release, Pearl allegedly started embezzling payments made by tenants of the 13-story building in 2000 -- a year after the State Bar bought it -- by creating invoices directing them to make payments to "PLOT" or "PLOT -- The State Bar of California." Tenants would either deliver their checks directly to Pearl, the AG said, or leave them on the front desk and directed to her attention.
Pearl allegedly would deposit the checks in the Oakland bank account of the Piedmont Light Opera Theatre, a nonprofit organization she served. She would then transfer the funds to her personal account.
The AG accuses Pearl of spending the ill-gotten money on spa treatments, high-end clothing stores, expensive restaurants and ritzy hotels.
The alleged scheme began to fall apart on June 13 when Pearl submitted a check request for $10,800 to return a security deposit. On July 2, she said the check had been lost in the mail and requested a new one. Suspicious State Bar officials conducted a records search and quickly found evidence of embezzlement.
"In several cases," the AG said, "Pearl took no action to hide the nonpayment or to create a paper trail to explain her actions. There are simply large gaps in her files in which one would expect to find invoices, check copies and deposit receipts."
Brown said Pearl was also charged with tax evasion because she didn't report the stolen funds on her tax returns.
Ivan Resnikoff, who owns The UPS Store on the State Bar building's first floor, called the alleged theft "an unfortunate mess" that caught all tenants by surprise. Resnikoff said tenants felt Pearl's integrity was "impeccable."
"It really hurt people personally," the store owner said. "And it didn't help the State Bar's reputation."
According to an arrest warrant issued for Pearl, other tenants over the years have included Caboodle Cartridge, Beta Nineties, Tetra Tech Inc., Catholic Charities, Lenos Software, Howard Street Coffee Roastery, Rotee Express, CFF Group and the W. Haywood Burns Institute.
Hawley said the State Bar Board of Governors has asked for an internal investigation to find out how Pearl was allegedly able to embezzle an average of nearly $85,000 a year for about eight years.
"I do agree with them completely," Hawley said, "that this is something that should be looked closely at."
