Gross' problems arose when told his secretary, Claudette McCarthy, about the gift. She had worked for Gross for many years and he gave her glowing evaluations, the DRB said.
McCarthy testified that she typed an invoice setting up the Keene payment and a letter advised Keene to send the check to Gross in an envelope marked "personal and confidential." Letters not marked that way would be opened in the mailroom and the check would have automatically been set aside for deposit in the firm account, according to testimony.
Gross instructed McCarthy to remove the letter from her computer and told her not to tell anyone in the firm about it. She kept quiet about it until 2002, when she decided to get even because Gross had begun treating her badly, she testified. The mean treatment began in 1999 after she refused to take time from a busy schedule to do some work for Gross' wife, Heidi Gross, a lawyer in the firm. There were other incidents, one of which ended with Gross calling McCarthy a "fucking idiot," she told the Daily Business Review.
In 2002, not long after Gross wrote "no" across her vacation request and threw it into a wastebasket, McCarthy told members of the firm about the 1998 check.
"The secrecy that Respondent [used] to cover his conduct shows he did know there was a policy," Richter told the court in In the Matter of David Gross, D-61-09.
Justice Virginia Long asked whether the firm's policy required disclosure or to not keep the money.
All gains, Richter said, were assets of the firm.
The issue for the DRB in deciding whether it was a permissible gift or a misappropriation was whether Budd Larner had a policy requiring attorneys to tell the partnership about such payments and receive approval before keeping them. The firm said its 1980 partnership agreement required Gross to give the $50,000 to the firm.
Gross argued that it was his understanding there was no such policy and that at a time when he was head of the firm he so advised another lawyer who had been offered a $65,000 Mercedes-Benz from a client.
Long noted that the firm in the past had allowed its attorneys to keep other gifts, such as jewelry and four trips to Hawaii.
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