US: law firm is victim of fraud

32 year old George Michael Perez has not yet been required to enter a plea on the indictment that alleges that between late 2005 and early 2007 he diverted funds from the firm's clients' account to his own.

The case shows an interesting hole in the firm's management systems that, prosecutors allege, allowed Perez to get away with it.

Instead of requiring printouts from the accounting system and bank statements to verify, the firm's senior partner met Perez monthly and at those meetings, Perez was required to produce and present a spreadsheet showing the firm's position.

Perez, prosecutors say, simply fiddled the figures on the spreadsheet.

The money in the accounts came from property repossessions. Basically, Perez paid off mortgagees but shortchanged the equity holders who would otherwise have received any balance after paying off secured loans and costs, prosecutors say.

Worse, less than two weeks after his final transaction, Perez allegedly set a fire at the law firm which was so intense that firecrews had difficulty in extinguishing it.

He is charged with five counts of laundering relating to payments made out of his personal account.