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In re Cox

Supreme Court of South Carolina

June 22, 2016

In the Matter of James C. Cox, Jr., Respondent. Appellate Case No. 2016-000925

          Submitted May 24, 2016

          Lesley M. Coggiola, Disciplinary Counsel, and Sabrina C. Todd, Assistant Disciplinary Counsel, both of Columbia, for Office of Disciplinary Counsel.

          James C. Cox, Jr., of Hartsville, pro se.

          PER CURIAM:

         In this attorney disciplinary matter, respondent and the Office of Disciplinary Counsel (ODC) have entered into an Agreement for Discipline by Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court Rules (SCACR). In the Agreement, respondent admits misconduct and consents to the imposition of a public reprimand or definite suspension not to exceed nine (9) months. In addition, respondent agrees to pay the costs incurred in the investigation and prosecution of this matter by ODC and the Commission on Lawyer Conduct (the Commission) within thirty (30) days of the imposition of discipline. He further agrees to complete the Legal Ethics and Practice Program Ethics School, Trust Account School, and Law Office Management School within one year if a public reprimand is issued and no later than one year after reinstatement if a period of suspension is imposed. We accept the Agreement, issue a public reprimand, and impose conditions as stated hereafter in this opinion. The facts, as set forth in the Agreement, are as follows.

         Facts and Law

         Matter I

         Edward E. Saleeby, Sr., was the managing partner of Saleeby, Saleeby, and Herring, and remained so until his death in 2002. In 1971, respondent was hired as an associate at Saleeby, Saleeby and Herring, P.A. Respondent became an equity partner during the 1970s.

         Edward E. Saleeby, Jr., (Mr. Saleeby) joined the firm in 1978. Mr. Saleeby became a partner approximately two years before his father's death and became managing partner upon his father's death.

         A few years after his father's death, Mr. Saleeby hired paralegal Rebecca Puleo Shaw who had previously worked for the firm. In the years that followed, Mr. Saleeby was often absent from the office due to health and personal problems but remained managing partner. In April of 2003, Shaw began misappropriating funds from the firm's trust account. She continued misappropriating trust account funds until she was terminated in March of 2008 for other reasons.

         During Shaw's employment, firm procedures required preparation of a disbursement sheet itemizing all receipts and disbursements associated with the case. The disbursement sheet was always reviewed with the client and respondent almost always reviewed the disbursement sheets in his cases before they were sent to the office manager. The office manager was to issue checks based on figures listed on the disbursement sheet and the staff member assisting on the file would prepare letters and mail payments to the respective parties.

         Shaw did not have authority to issue or sign checks. Although there is evidence that in at least one case she prepared an alternate disbursement sheet, Shaw generally was able to request the issuance of trust account checks without proving the disbursements were proper. This was the result of a breakdown in official procedures without the knowing assistance of the office manager.

         Sometimes, Shaw would have a check issued to a fictitious payee and, at other times, she would request a check payable to the client or a relative of the client. Shaw generally, but not always, chose to issue a check in an amount equal to the savings that resulted from medical providers agreeing to accept reduced payments. She then forged the payee's endorsement, endorsed the check with her own signature, and cashed the check or deposited it into her own account.

         In total, Shaw misappropriated $349, 227.34 through the issuance and negotiation of 201 checks. Seventeen of those checks totaling $75, 766.95 were issued in connection with an underage client whose medical bills exceeded the total insurance available in the case. The child's mother filed a complaint. The majority of the improperly issued and negotiated checks, including those issued in the child's case, were issued on Mr. Saleeby's files, however, some of the misappropriations occurred on respondent's files and those of firm associates.

         Respondent discovered Shaw's misappropriation when the mother of one of his clients reported her son continued receiving medical bills after settling his case. Respondent learned a check had been issued in connection with the case to a person neither he nor his client's mother recognized. Respondent attempted to reach Shaw as she had worked on the file, but she had since been terminated on other grounds. Shaw spoke with the office manager. Shaw admitted the payee was fictitious. Shaw failed to appear for a scheduled meeting with respondent, but provided the office manager with a cashier's ...

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