Albert M. Graham and Martha A. Graham - Page 14

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          totaling $25,296 that he had endorsed to her to reimburse her.              
          Edgar deposited those checks in her account on June 17, 1997.               
               On August 22, 1997, Edgar wrote a check to petitioner in the           
          amount of $6,210.  On August 27, 1997, a $6,310 American Savings            
          Bank cashier’s check payable to petitioner was deposited in                 
          Edgar’s account instead of petitioner’s business account.                   
                    b.   Askew Legal Fees                                             
               In 1997, a client, Mr. Askew (Askew), owed a substantial               
          amount of legal fees to petitioner.  When Askew filed for                   
          bankruptcy, Sieveke filed a claim in bankruptcy court for                   
          petitioner for unpaid attorney’s fees.  Sieveke collected                   
          $14,704.67 from Askew and, on August 22, 1997, deposited those              
          funds in Sieveke’s client trust account.                                    
               Instead of depositing the $14,704.67 in the law firm’s                 
          business account, on petitioner’s instructions: (a) Sieveke wrote           
          checks to the IRS for $10,000 and to the Franchise Tax Board for            
          $3,000 to pay petitioner’s personal taxes, and (b) Sieveke paid             
          the $1,704.67 balance to Edgar.                                             
                    c.   Other Legal Fees Paid to Petitioner and Not                  
                         Deposited in the Business Account                            
               In 1998, petitioner collected fees totaling $135,421.64                
          ($100,000 + $22,000 + $13,421.64) from former clients Donald                
          Arnett (Arnett), Angela Chen (Chen), and Brian Markam (Markam).             
          None of these amounts were deposited in petitioner’s business               







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