Slow Disbarment for Sexually Conflicted Attorney Who Billed Fake Clients

Disbarment Urged for Lawyer Who Billed Fake Clients
The New Jersey Law Journal - May 25, 2010

The New Jersey Disciplinary Review Board is recommending disbarment for a lawyer who manufactured fake billings for nonexistent clients, first at Fox Rothschild and then at Margolis Edelstein. The board found that Kenneth Denti, 51, violated ethics rules against fraud by drawing a salary while pretending he had done $350,000 worth of work. He also submitted phony expense accounts and had sex with a matrimonial client while she was trying to reconcile with her husband, creating a conflict of interest, the board added. A special master had recommended an 18-month suspension because there was no finding of criminality or knowing misappropriation. But in an opinion made public on Friday, the DRB asked the New Jersey Supreme Court to lift Denti's law license because he "engaged in an insidious plot that, coupled with his obvious untruthful testimony, shows a deficiency of character that compels disbarment."

Here's what happened, according to the DRB. Denti, a former New Jersey deputy attorney general, had a matrimonial, zoning and land use practice when he arrived at Fox Rothschild in Princeton as a contract partner in January 2005 with a salary of about $200,000. He brought work with him, or so Fox Rothschild thought when it saw the time sheets he entered for clients listing services rendered. Work on one matrimonial matter exceeded $100,000, according to the time sheets. But the firm became suspicious when he submitted no invoices for payment. An internal investigation led by lawyers in Fox Rothschild's main office in Philadelphia showed the cases didn't exist. Many of the clients had been Denti's at Duane Morris in Cherry Hill but stuck with that firm when he left. After 14 months at Fox Rothschild, Denti was told to leave, and the firm filed a grievance with the New Jersey Office of Attorney Ethics in September 2006. But the grievance was confidential, and Margolis Edelstein, which hired him for its Westmont office, had no way of knowing he had left Fox Rothschild under a cloud. Fox Rothschild's counsel, Thomas Paradise, who works in the firm's Philadelphia office and led the internal inquiry into Denti, declines to comment. But ethics rules in New Jersey that permit grievants to make their complaints public do not require them to do so, and Pennsylvania's rules require grievants to keep their complaints confidential. Denti brought an alleged book of business to Margolis Edelstein's Westmont office. But when the firm confronted him as the Fox Rothschild partners had, he resigned in August 2007. Margolis Edelstein filed a grievance later that year and learned it wasn't the first firm to do so. "He submitted fictitious time sheets for more than two and one-half years, encompassing more than $350,000 in fees," a violation of Rule of Professional Conduct 8.4(c), the stricture against fraud and misrepresentation. "His motive was financial self-interest -- he wanted to continue his employment and his receipt of compensation." He also was found guilty of submitting phony expense accounts and the board found that his sexual relationship with a client conflicted with her interest in reconciling with her husband. Both Denti and the woman denied during testimony that they had sex, asserting that seemingly steamy e-mails between them were merely playful jokes just to blow off steam. Denti, who represented himself, could not be reached for comment. Directory assistance had no number for the address listed for him in the Lawyers' Diary and Manual . He testimony during the ethics proceedings suggested that he had done work for the clients but hadn't kept good records. The DRB didn't buy it and rejected the 18-month suspension recommended by Special Master Milton Gelzer, a retired Superior Court judge. It noted that the Supreme Court has disbarred attorneys who defrauded their law firms on the theory that there is no ethical distinction between bilking a client and bilking a firm. "Although respondent's conduct did not constitute criminal theft and although he was not charged with knowing misappropriation of law firm funds, he carried out a longstanding and pervasive scheme of defrauding two law firms of which he had been a partner," the DRB said.

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So...What Does it Take to Get Disbarred in New Jersey?

The AMLAW DAILY by Zach Lowe - May 25, 2010

A fair number of disciplinary actions against lawyers come across our radar, and we see state officials constantly struggling to draw a line between conduct that merits a suspension and conduct that merits full disbarment. In one recent case, for example, Illinois authorities concluded that altering one's transcript did not merit disbarment. The same body had previously disbarred lawyers for lying about the accumulation of 297 parking tickets and, in a separate case, failing to come clean about prior criminal convictions. Which brings us to New Jersey, where authorities are going back and forth over whether a former Fox Rothschild and Margolis Edelstein lawyer should be disbarred after having been found to have fabricated $350,000 worth of billings for work he never did and, ahem, for sleeping with a female client he was representing in a matrimonial case. (It does not help matters that the woman apparently wanted to reconcile with her husband, according to a story about the lawyer, Kenneth Denti, in the New Jersey Law Journal, an Am Law Daily sibling publication.) A special master recommended suspending Denti for 18 months, but the state's Disciplinary Review Board disagrees and has asked the state Supreme Court to disbar Denti, the NJLJ says. Denti, who also worked at Duane Morris at one point during his career, joined Fox Rothschild's Princeton office as a contract partner earning about $200,000 per year in January 2005, the NJLJ says. Fox Rothschild believed Denti had portable business, and he bolstered that impression by submitting time sheets showing work on various matters, the NLJ reports. But when firm higher-ups asked for invoices, Denti could not provide them, the story says. The firm started an internal investigation and found Denti was fabricating the business. They asked him to leave in 2006 and filed a grievance with the New Jersey Office of Attorney Ethics.

Problem: Such grievances can remain confidential under New Jersey rules unless the complaining party wants to make them public. Fox Rothschild opted not to, and Margolis Edelstein hired Denti without any knowledge of his alleged prior misdeeds, the story says. (We wonder, though, whether anyone at Margolis Edelstein contacted Fox Rothschild about Denti.) The same fact pattern repeated itself at Margolis, and Denti resigned in 2007 after partners became aware of his allegedly fraudulent time sheets. State authorities have already found Denti violated ethics rules, according to the NJLJ. During a disciplinary hearing, Denti apparently testified that he simply kept poor records of his work and that he and the female client had never slept together, the NJLJ says. (The woman also denied having sex with Denti, saying the two exchanged dirty e-mails to "blow off steam," the paper says.)
So: Is this enough to merit disbarment? We'll find out.

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