Opinion ID: 2386034
Heading Depth: 1
Heading Rank: 5

Heading: concealment of payments to runners double checking

Text: Morris S. Berman testified that to maintain a supply of cash from which payments could be made to runners or loans to clients, he resorted to what he called double checking. When a case was settled and the insurer's check was received, the full settlement check was deposited in Berman's escrow account. The client was asked to place his endorsement on the back of two blank checks drawn on Berman's escrow account made payable to the client. Berman then would fill in the front of one check with the amount which the client actually received. The second check would be filled in with the amount paid a runner or advanced to the client as a loan. As many of his clients preferred payment in cash, Berman would cash both checks, already endorsed by the client. The client was paid what he was to receive from the first check and Berman would keep the cash from the second check. Ostensibly the client had received the proceeds from both checks as they were both made payable to the client, whereas in fact Berman had recouped cash he had improperly advanced. In cases where Berman had submitted falsely inflated medical expenses (discussed infra), he would list for the client as an expense the full amount supposedly to be paid to the doctor. In fact Berman would not pay the full amount of the medical bills to the doctor. Instead he would ostensibly increase the client's share of the settlement by the amount of the second of the double checks, which was converted to cash and kept by Berman. Berman testified that he informed Respondent of this practice within a few months after their association and that Respondent used the system. Mrs. Benner testified that she was thoroughly familiar with the double checking which occurred at time of settlement and that Respondent used the system when he conducted a settlement. Respondent denied any knowledge of double checking stating that he first learned of it in 1975 after he had left Berman. Berman stated that Commission Exhibits 1, 2 and 3 represented a typical case of double checking. These exhibits are three checks drawn by Respondent on Berman's escrow account dated March 6, 1974, endorsed on the back by a client named George L. McGill. The front of Commission Exhibit 1 is in the handwriting of the Respondent made payable to George L. McGill in the amount of $451.00. The front of Commission Exhibit 3 is also in Respondent's handwriting made payable to George L. McGill in the amount of $25.00. Commission Exhibit 2 made payable to George L. McGill is not completed with reference to amount or drawer's signature. These exhibits according to the testimony of Berman indicated that McGill received by way of Commission Exhibit 1, $451.00 as his share of the settlement. Commission Exhibit 3 was cashed and $25.00 was kept for reimbursement of monies previously paid out in connection with McGill's case. Commission Exhibit 2, the blank check, was not utilized. Although Respondent identified his handwriting on the checks, he was unable to give any explanation for their existence but denied that it was part of a double checking scheme. McGill also had no specific recollection of Exhibits 1, 2 and 3, but conceded that Exhibit 3 possibly could represent payment by him to Respondent for legal services previously rendered. Even if this were the case, Respondent still used double checks in order to receive cash from McGill without any record of payment to him, as on its fact Exhibit 3 represented money received by McGill rather than Respondent.