Notable developments in the legal world saw an incident of significant embezzlement by an ex-CFO of a Biglaw firm. Last week, the former Chief Financial Officer, John Dunlea, confessed and pleaded guilty to embezzling over $1.5 million from McElroy, Deutsch, Mulvaney & Carpenter, a law firm that ranks No. 246 on the NLJ 500. Along with this, Dunlea admitted to evading state income tax payments in connection with the financial heist.
As reported by Reuters, it was alleged by the New Jersey attorney general’s office, that between 2017 and 2022, Dunlea paid himself an unauthorized compensation topping around $1.2 million. The state also mentioned that he had the firm McElroy Deutsch pay around $355,000 worth of credit card charges, which he claimed were business expenses but in fact were covering his personal expenses for flights, hotels, and restaurants.
Alongside these allegations, Dunlea was also accused of evading state taxes amassing over $22,000 linked to the income from the credit card scheme. He finally pleaded guilty to two counts of theft by deception and five counts for failing to pay taxes.
Dunlea, who had previously confessed and apologized to the firm, eventually resigned in April 2023. A statement provided by his lawyer attests that Dunlea had made a grave mistake and will pay for it for the rest of his life. Meanwhile, McElroy Deutsch, who have refrained from commenting on Dunlea’s guilty plea, have filed a civil lawsuit against him.
For his actions, it is the recommendation of the prosecutors that Dunlea serves a five-year sentence, along with providing restitution to the firm. His sentencing is scheduled for June 14. This notable episode serves as a reminder for legal professionals of the implications of financial misconduct in the industry.