Warsaw attorney faces felony fraud and theft charges

(photo supplied / Times-Union)

A local attorney may have to retain his own legal counsel as a warrant for his arrest on fraud and theft charges was filed Tuesday.

Scott J. Lennox, 50, Warsaw, is facing two counts of fraud on a financial institution, level 5 felonies; and six counts of theft, level 6 felonies, according to the probable cause affidavit filed by special prosecutor Vicki Elaine Becker, 54th Judicial Circuit. Lennox’s bond was set at $5,000 surety and $250 cash.

Kosciusko County judges Michael W. Reed, David C. Cates and Torrey J. Bauer all have recused themselves from the case, which was referred to Chief Judge of the District, the Honorable Dean Colvin, to assign a special judge in the matter.

On Nov. 27, Warsaw Police Department Det. Sgt. Ryan Coble met with attorney Matthew Buehler who advised he is a partner in the law firm with Joseph Sobek and Lennox. Buehler said Lennox had illegally taken money from three trust funds and also had taken money from the business operating account of Lennox, Sobek and Buehler LLC.

Buehler said that on about Dec. 21, 2017, Lennox, Sobek and Buehler law firm opened an Interest On Lawyers Trust Account (IOLTA) with Lake City Bank. IOLTA accounts are trust accounts for attorneys for the short-term holding of client funds not yet earned or disbursed, according to court documents. The Indiana Professional Rules of Conduct govern the use of trust accounts and prohibit the use of IOLTA funds unless earned or matured for disbursement. However, on Oct. 30, 2018, Buehler found that Lennox was removing money from the trust account for personal use. Buehler removed Lennox from the trust account on Nov. 15, 2018, so that Buehler was the only person authorized to access the trust account funds.

Buehler said he was notified by the law firm’s bookkeeper, Amy Slone, that Lennox made a cash withdraw on Oct. 30, 2018, of $5,500 from the trust account, of which $5,000 had then been deposited into the law firm’s business account, but no fees had been earned to justify the withdrawal.

Numerous withdrawals from the business account appeared to have been made by Lennox for personal expenses. Buehler also said that on Nov. 7, 2018, Lennox made a cash withdraw of $3,500 from the trust account and $3,000 was deposited into the law firm’s business account. Again, numerous personal expenses for Lennox were taken from the law firm’s account. Buehler said about Nov. 8, 2018, Lennox made a cash withdraw of $4,000 from the trust account and $3,500 was deposited into the law firm’s business account. Buehler said Lennox had no justification to remove any of the money from the trust account as no fees had been earned from it nor disbursements to clients were justified  at that time.

On Nov. 21, 2018, Lennox made an online transaction from the trust account to Lennox’s personal Verizon wireless account for $1,620.71, Buehler also said.

Kosciusko County Sheriff’s Office Det. Shane Bucher spoke with a woman concerning the law firm trust account. She confirmed the dates the account was opened and the date Lennox was removed from the trust account. She said on Nov. 15, 2018, Lennox attempted to withdraw funds from the trust account and was told by a Lake City Bank manager that he was no longer an approved signor on the account.

The woman further advised that on Nov. 21, 2018, Lennox went to Lake City Bank’s main branch in Warsaw and presented a typed document specifically claiming authorization to add his name back on the trust account. Buehler had not given authority to Lennox to do so. The manager told Lennox that Buehler had removed him from the account and Lennox was no longer able to do transactions on the trust account. However, on Nov. 23, 2018, Lennox presented and cashed a check from the law firm trust account, made payable to him, for $1,243 at the Lake City Bank east branch. The check was endorsed by Lennox.

On Nov. 26, 2018, Lennox presented and cashed a check at the Columbia City Lake City Bank from the law firm trust account made payable to Lennox for $743. It also was endorsed by him.

The woman said Lennox cashed the two checks made payable to him after being told he was no longer a signor on the law firm’s trust account. The bank credited the law firm’s trust account and took a loss of $1,986. She said Lake City Bank is a federally insured financial institution.

On Nov. 29, 2018, Coble spoke with Slone who said the firm also is the administrator of the Reed & Earhart IOLTA and the Reed, Earhart, Lennox and Barrett IOLTA, both older IOLTAs from Lennox’s prior law firms.

Slone said that on Dec. 14, 2016, at Lennox’s direction, she wrote a check to Bowers Jewelry for $7,000 and another check to The Car Company for $6,000 and Lennox signed both checks. The checks were written on Reed & Earhart’s IOLTA. She said Bowers Jewelry was not a client and had never been a client of the law firm. She said the check to Bowers Jewelry was for an engagement ring and the check to The Car Company was payment for Lennox’s son’s vehicle.

In a different case, Lennox also must appear before the Marshall Superior Court at 1 p.m. April 15 to show cause as to why he should not be held in contempt and/or sanctioned for failing to appear at a scheduled hearing March 5 in Kosciusko Superior Court. The order was made March 25 by Kosciusko Superior Court I Special Judge Dean Colvin.

In that case, Lennox appeared on behalf of the petitioner Feb. 1 and for scheduling conference Feb. 8 wherein the case was scheduled for hearing at 9 a.m. March 5.

The Indiana Supreme Court has ruled that an attorney may be punished for direct contempt of court for failing to appear at a judicial proceeding that he or she is legally required to attend, absent a valid excuse.