A Hollywood lawyer was disbarred Thursday after hiring a felon already convicted of multimillion-dollar wire fraud who later went on to steal about $4.8 million from the firm’s trust account after he was left unsupervised.
Randall Gilbert, a construction lawyer with the small firm Gilbert Law Group, knew he was hiring paralegal Steven Sacks fresh out of federal prison. But the attorney did not dig into Sacks’ work history or criminal past, which involved embezzling nearly $8 million in New York.
Gilbert soon discovered Sacks tried to steal $20,000 from the firm to pay for a girlfriend’s cosmetic surgery. He fired the paralegal—but then paid for him to go to therapy, rehired him and lied to Sacks’ probation officer to help keep him out of prison, according to the Florida Supreme Court. Gilbert even named Sacks the firm’s chief financial officer.
Sacks went on to steal nearly 200 more times from 2010 to 2014. Evidence of theft was in nearly every monthly account statement during that time, but Gilbert said he didn’t notice it.
“This case gives new meaning to the phrase ‘turning a blind eye,’” the court observed in a per curiam decision.
The referee in the case, Palm Beach County Court Judge Leonard Hanser, recommended a two-year suspension for Gilbert, based on mitigating factors including the attorney’s clean Florida Bar disciplinary record and his lack of a selfish or dishonest motive.
But the justices found disbarment was the only option with such “egregious facts.”
Gilbert’s missteps began in 2005 when a friend referred Sacks for the paralegal job, the court found. Sacks said he was a disbarred attorney and a certified public accountant, even though he had never been either.
The construction lawyer didn’t look into the claims and signed off on a form acknowledging Sacks’ criminal conviction. The felon’s probation officer told Gilbert he didn’t think hiring Sacks would be appropriate given his history of financial crime.
“With respect to the serious baggage Sacks presented as an employee of his law firm, Sacks was ‘curiously uncurious,’” Hanser wrote in his referee’s report.
Over the years, Sacks passed out business cards calling himself a J.D. and CPA. After the foreclosure crisis, he was put in charge of the firm’s growing real estate closing work. Gilbert then allowed Sacks to be solely responsible for balancing books and preparing QuickBooks and trust account reconciliations, according to the court.
Sacks started embezzling from the firm’s trust account, transferring money to a company he created called Sqwerty LLC, among other entities and people such as his landlord and his girlfriend’s ex-husband.
In the meantime, Gilbert was spending less than five minutes a month reviewing account statements that would have revealed the thefts, he testified. He noticed Sacks had a fancier lifestyle but believed he was getting money from his girlfriend, the beneficiary of a large trust.
“Gilbert, as an attorney and fiduciary, was directly responsible for his firm’s trust account and for the supervision of employees,” the justices wrote. “As an attorney, he owed a duty to the public and to his clients to safeguard their money. Instead, he flouted the system by lying to a federal probation officer and allowing a non-attorney to hold himself out as a law school graduate and a certified public accountant.”
Some Florida attorneys have observed the state Supreme Court is increasingly willing to dole out harsher discipline than a referee recommended, particularly when trust account theft is involved. The trend may stem from the reputational hit the legal profession took when Fort Lauderdale attorney Scott Rothstein’s $1.2 billion Ponzi scheme was discovered in 2009.
Gilbert, who was already suspended when the disbarment order came down, was represented by David Rothman and Jeanne Melendez of Rothman & Associates in Miami. Rothman did not immediately respond to a request for comment.
The Florida Bar prosecutors were Adria Quintela and Randi Klayman Lazarus of Sunrise.
For his part, Sacks pleaded guilty to wire fraud in 2014 and was sentenced to a little more than seven years in prison. He also must pay $4.5 million in restitution.