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December 1, 2008 | last updated December 6, 2011 9:43 am

After the fall | One year later, Maine's legal community is still shaken by the John Duncan scandal at Verrill Dana

Photo/David A. Rodgers
Photo/David A. Rodgers
Gail Kingsley of Libby, O'Brien, Kingsley
Photo/David A. Rodgers
From left to right: Tim O'Brien, Victoria Sarfo-Kantanka, Gail Kingsley and Gene Libby of Libby, O'Brien, Kingsley LLC in Kennebunk
Photo/David A. Rodgers
Lois Lupica, a professor at the University of Maine School of Law, says oversight doesn't always prevent fraud.

A history of the Duncan matter


1978 John Duncan is admitted to the Maine State Bar and begins practicing law at Verrill Dana in Portland. He specializes in wills, estates and trusts.

1983 Duncan becomes a partner at the firm

Sept. 1997 Duncan deposits a check for payment for Verrill Dana services into his personal bank account and does not transfer the proceeds to the firm as required. From this point through Jan. 2007, Duncan deposits more than $480,000 into his own bank account meant for the firm or taken from clients whose estates he managed.

Jan. 2007 Ellie Rommel, Duncan's secretary, notices Duncan is diverting checks meant for the firm into his own bank account. Rommel begins reviewing Duncan's records from the previous three years.

May 29, 2007 Rommel gives her two week notice at the firm because of stress related to the evidence she's compiled against Duncan

June 2007 Rommel tells Verrill Dana managing partner David Warren and another prominent attorney at the firm that Duncan had stolen from a client. She provides documentation and tells Warren she wants to rescind her resignation and stay at the firm. Rommel claims Warren denied the request, though Verrill Dana denies this.

June 28, 2007 Duncan is confronted by Warren and admits he had diverted $77,500 from a client's account that should have gone to the firm. He offers to repay the firm and resign.

July 2, 2007 Duncan repays Verrill Dana $77,500 and denies any further wrongdoing. Throughout the summer, Duncan maintains he has not otherwise stolen from the firm or clients. The firm offers Rommel her job back.

Oct. 2007 Rommel's attorney notifies Verrill Dana of a possible lawsuit; the firm hires other law firms, including Norman, Hanson & DeTroy of Portland, to audit Duncan

Oct. 22, 2007 Duncan admits to Verrill Dana's legal counsel that he had diverted other funds to his personal bank account

Oct. 28, 2007 Verrill Dana's executive board accepts Duncan's resignation, effective Dec. 31, 2007

Nov. 8, 2007 Verrill Dana partners officially expel Duncan from the firm

Nov. 2007 Verrill Dana sends a letter of apology to approximately 1,000 past and present clients of Duncan, telling them he misappropriated funds and improperly billed clients

Jan. 2008 David Warren steps down as Verrill Dana's managing partner; Rommel settles a lawsuit against the firm for an undisclosed sum

June 10, 2008 Duncan pleads guilty to two counts of theft in Cumberland County Superior Court

July 1, 2008 Maine Supreme Court disbars Duncan for life. He is believed to be the only lawyer in Maine history ever to receive such a penalty.

Sept. 2008 Duncan is sentenced to 28 months in federal prison for tax evasion and theft

Libby, O’Brien, Kingsley LLC

Managing partner: Gail Kingsley
Founded: Nov. 26, 2007
Employees: Eight, including four attorneys
Services: Estate planning and administration; civil and criminal litigation; personal injury, family, employment and collegiate sports law; in offices in Maine and Mass.
Annual revenue: $1 million
Contact: 985-1815
www.lokllc.com

Verrill Dana LLP

Managing partner: Keith Jones
Founded: 1862
Employees: 195, including 103 attorneys
Services: Legal services in business, employment, environmental, estate planning, intellectual property, litigation and real estate; in offices in Maine, Mass. and Washington D.C.
Annual revenue: Did not disclose
Contact: 774-4000
www.verrilldana.com

The story some Maine lawyers wish everyone would forget won't leave Gail Kingsley alone.

On a drizzly afternoon barely one year after the public learned John Duncan, a respected estate attorney at one of Maine's oldest law firms, had stolen nearly half a million dollars from clients and the firm, Kingsley sits in the bright Kennebunk offices of Libby, O'Brien, Kingsley fiddling intently with her pen. Kingsley and her colleague, Tim O'Brien, glance at each other solemnly from across a small conference table, like a couple at a parent-teacher conference when the topic turns to discipline. O'Brien, in a navy blue Notre Dame sweater, waits for Kingsley to explain why she contradicted his recollection that strategy outweighed emotion the day the three partners decided to resign from Verrill Dana.

"It was emotional," Kingsley says softly. "It was very emotional."

Kingsley sighs. She paces her sentences slowly, her voice wavers. She's an estate and trust attorney, and Duncan was the head of her department.

"It's like death," she says. "It was a progression from just disbelieving to being…" She pauses, searching for the words. "Disbelief here, and angry here, and in between sick to your stomach like your dog just died."

Kingsley became a lawyer relatively late in life, enrolling in law school at Boston College at age 37, and for her law was always personal — she decided to become a trust and estate attorney after relying on one during the death of her first husband. Trust and estate work, she says, linking her fingers together, relies on trust. It's a pact between client and lawyer that Kingsley considers sacred. After years working for herself in Massachusetts and Maine, Kingsley was wooed from independent practice in 2005 by the only firm she would consider working for — Portland's Verrill Dana.

On Oct. 29, 2007, Kingsley and the staff of the firm's trust and estate department were gathered in a room and told that Duncan, a partner at Verrill Dana since 1983, had between 1997 and 2007 stolen more than $480,000 from clients and the firm, including $77,500 from an elderly woman whose estate he managed. The firm, according to news reports, learned of the embezzlement in May, but did not investigate Duncan until October. Verrill Dana would later fire Duncan on Nov. 8. On Nov. 16, O'Brien, Kingsley and former Verrill Dana general counsel Gene Libby tendered their resignations.

"It was definitely because of the handling of the Duncan matter that the three of us decided to leave Verrill Dana," says O'Brien, an employment and sports attorney who had worked at Verrill Dana for 11 years.

On Nov. 26, around the time the firm mailed a letter of apology to around 1,000 past and present clients of Duncan, the three lawyers and their former Verrill Dana office staff opened their firm in an office condominium off of U.S. Route 1 owned by Kingsley. O'Brien and Kingsley say the firm retained most of its clients from Verrill Dana, and has had what O'Brien and Kingsley describe as a banner first year, generating $1 million in revenue and hiring a fourth attorney, Victoria Sarfo-Kantanka, in March. "The loyalty of clients with faith in the integrity, experience and expertise of the founding partners," the firm's website states, "has made the firm's first year personally and professionally rewarding."

"We're definitely the silver lining in the Duncan matter," says O'Brien.

The Duncan matter, or the Duncan incident, or the Duncan embezzlement, to put it more bluntly, remains a very stubborn cloud over many heavy hitters in Maine's legal community, despite silver linings like O'Brien's. In a state where infractions of this magnitude are rare, few lawyers are willing to talk about the matter or how it affected their firms. Verrill Dana is currently the state's second largest law firm, employing 103 attorneys in offices in Portland, Kennebunk, Augusta, Boston, Hartford, Conn., and Washington, D.C. Of the nine other large law firms in the state, only two would speak to Mainebiz about the impact of the Duncan embezzlement on the Maine legal community. The other seven either declined to comment or did not respond to multiple inquiries. A spokesperson from one of the firms, when declining a request for an interview with the firm's head, explained that he is friends with lawyers at Verrill Dana.

An ongoing investigation by the Maine Board of Overseers of the Bar, the close-knit nature of the Maine legal community and the duration and depth of the embezzlement at one of the state's most prominent firms has even industry representatives backing away — neither Terrance Duddy, president of the Maine Trial Lawyers Association, nor Colby Wallace, chair of the trusts and estates section of the Maine State Bar Association, would comment. Wallace, after apologizing profusely for declining an interview, explained, "I just don't want my name attached to any kind of story related to that issue at all."

John Duncan's undoing

John Duncan is now in federal prison in Brooklyn, hundreds of miles from the state where his theft still raises hackles in part because it was so unusual and the retribution so public. Of the more than 4,869 lawyers licensed to practice in Maine, 13 were publicly sanctioned in 2007, according to the American Bar Association. As a percentage of lawyers licensed, Maine's rate of public disciplinary action has historically been among the country's lowest.

In early June 2007, Duncan's former secretary, Ellie Rommel, gave the firm's managing partner, David Warren, and another high-ranking Verrill Dana attorney documentation proving that Duncan had deposited checks totaling $77,500 from a client's account into his own, according to court documents. On June 28, Warren confronted Duncan, who offered to repay the firm and resign. Duncan did return the money to his client's account and maintained throughout the summer that he hadn't stolen any other funds. Verrill Dana's executive committee, according to the Portland Press Herald, voted unanimously that summer to reject Duncan's offer of resignation.

Meanwhile, Rommel claimed she was the one being turned out by Verrill Dana. Rommel had tendered her resignation shortly before giving the firm evidence on Duncan in June, but days later changed her mind. She told the paper that, when she tried to rescind her resignation, then-managing partner Warren resisted her because Rommel would have had to explain her change of heart to human resources at a time when many in the firm were unaware of Duncan's mishandling of his client's funds. (The firm has denied Warren refused Rommel's request to take back her resignation, and Rommel's attorney, Daniel Lilley, would not comment on the case because of a confidentiality agreement.) Rommel was eventually offered her job back, but it wasn't until she threatened to sue the firm that it brought in outside lawyers to investigate, according to the paper.

The investigators discovered in October that Duncan had stolen other funds, meant for clients and the firm, and by Oct. 22 Duncan had admitted to Verrill Dana's legal counsel that his indiscretions went beyond the theft Rommel flagged in June. On Oct. 28, Duncan resigned from the firm. The following day, Verrill Dana employees like Gail Kingsley found out about what Duncan had done.

Duncan, who was well respected in the legal community and in Greater Portland at large, had led Verrill Dana's private clients group, handling estate planning and administration. The revelation of his deceit, as well as Verrill Dana's apparent reluctance to notify police, made national news. In July of this year, Duncan was disbarred for life in what the state Board of Overseers of the Bar says is the most severe professional sanction ever imposed on a Maine attorney. Duncan is currently serving 28 months in federal prison for tax evasion and theft. Rommel settled a lawsuit with Verrill Dana in early 2008. David Warren, the firm's former managing partner, stepped down from the position in January, though he remains a partner at the firm.

The Maine Board of Overseers of the Bar, which can sanction lawyers for not properly reporting or remediating an ethical violation, is currently reviewing other lawyers at Verrill Dana, according to Gregg Ginn, a partner at the firm and its spokesman. Ginn said, because of this ongoing investigation, the firm would not comment on Duncan's case or its effect on internal ethics practices. "It draws more attention to Verrill Dana," Ginn said of press coverage now. "Lawyers do a very good job of presenting facts and drawing conclusions from those facts, and I don't want to influence these [Board of Overseers of the Bar] procedures in any way."

Resounding repercussions

At the Bangor-based law firm Eaton Peabody, trust and estate oversight was tightened after the John Duncan scandal, according to the firm's managing partner, Daniel McKay. At the beginning of this year, the firm put long-standing ethics policies to paper and established a Fiduciary Services Committee of firm lawyers that audits Eaton Peabody's attorneys monthly. Eaton Peabody also committed to an outside audit every three years.

"It's a matter of discussion," says Paul Chaiken, a lawyer at Rudman & Winchell in Bath and chair of the Maine State Bar's Rules and Professional Ethics Committee, of the Verrill Dana embezzlement. "I'm sure that virtually every firm at some point took a few moments to think about internal practices and oversight to do what they can to make sure that it doesn't happen to them."

Chaiken says his own firm conducted that review, but he wouldn't specify what, if anything, was changed. He said other firms in the state may be equally reluctant to divulge details about internal ethics practices because it could inadvertently reveal weakness. If review standards were changed, for example, that would suggest they weren't up to par to begin with.

"I'm sure most people would want this whole thing to go away, because it hurts us all when there's a bad lawyer out there," says Chaiken. "We wish it wouldn't have happened because it affects all of us."

"It's my impression that lawyers around the state think about professional ethics as part of their daily practice," says Maine State Bar Association President Brett Baber of Lanthem Blackwell in Bangor. "The key lesson is, even though it's rare, it could happen anywhere. So every firm around the state needs to be vigilant that their attorneys are upholding their ethical obligations."

Lois Lupica, a professor at the University of Maine School of Law who teaches a course on professional ethics, seconds Baber's point. "It served as a reminder of good procedures and the importance of following good procedures," she says. "I also think it was widely recognized that, no matter how good the procedures are, if someone is determined to commit some kind of fraud or untoward behavior, it can happen."

Landing on their feet

The law office of Libby, O'Brien, Kingsley feels worlds away from the epicenter of the Verrill Dana aftershocks in Portland. At the firm, which is tucked between an accounting firm and a children's nonprofit in the center of a cluster of gray office condos, O'Brien and Kingsley are surprised some of Maine's legal leaders won't talk about the Verrill Dana case even now. They glance at each other, mention a name or two, people who might want to discuss how the case affected lawyers, and then they fall silent. What do they think about Verrill Dana, one year later?

"I think we all have very good friends at Verrill Dana," says O'Brien, appearing surprised by the question. "We wish them every success in the world."

"Absolutely," agrees Kingsley. "There must still be 200 employees there, so there's 200 different families and they're doing a good job and they're good people. We couldn't feel worse about what they're going through and we certainly wish them the best. All of them."

After a pause, Kingsley recalls the day three years ago when her recruiter said Verrill Dana was interested in interviewing her. She had just been admitted to the Maine Bar, and the firm she revered suddenly came calling.

It was exciting.

"I mean, I think it's a spectacular firm," she says. "It still is."

Sara Donnelly, Mainebiz managing editor, can be reached at sdonnelly@mainebiz.biz.

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