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The Accountant Charged The Receivership 285,885 In Legal Fees To Fleming 179,734.38 In Legal Fees To The Respondent

In about 1990, Fleming hired a certified public accountant to prepare a compilation of USIC receipts and disbursements to file with the court as his account. From about 1990 through 1995, the respondent provided legal services to USIC, including but not limited to furnishing information to the accountant for the final report and reviewing and revising the reports submitted by the accountant for approval by the receiver. The respondent failed to appreciate that her attempt to represent USIC created a conflict of interests in several ways: USIC’s interests differed from the interests of the respondent and Fleming, the respondent’s interests differed actually or potentially from Fleming’s, and the respondent’s personal and professional relationship with Fleming interfered with her independent judgment on behalf of USIC. The respondent did not and could not properly seek consent to these various conflicts of interests. The respondent billed USIC from January 1993 to August 1, 1995, at the rate of $50 per hour. From August 1, 1995, through December 1995, the respondent billed separate rates of $50 per hour and $100 per hour for mostly clerical or administrative work.

The compilation prepared by the accountant charged the receivership $285,885 in legal fees to Fleming; $179,734.38 in legal fees to the respondent; and for office rent, equipment, salaries, and other charges not attributable to the receivership. The respondent took no action to protect USIC’s interest regarding these charges against its assets. The report compiled by the accountant was finished by no later than January 1993. The respondent took no action of substance to compel Fleming file the report with the court. The report was not filed until December 7, 1995. Due to the delay, USIC was charged additional expenses. The report included inflated, unjustified, inaccurate, and otherwise unwarranted charges to the receivership. The respondent did not disclose the fraud to the court. The court called for justification of Fleming’s and the respondent’s fees. Fleming and the respondent created after-the-fact records purporting to record hours spent on the receivership. These records showed intentionally inflated and inaccurate numbers of hours for Fleming. The respondent’s records inflated the number of hours she spent on administrative tasks. The respondent did not protect USIC’s interests in having accurate records provided to the court.

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