Disbarment Urged for Lawyer Who Billed Fake Clients
Henry Gottlieb
New Jersey Law Journal

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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