Thieving accountant, wrong number proved costly for lawyer; court lifts suspension
An Oklahoma lawyer learned a costly lesson when he left payment of taxes to an accountant who embezzled from him and took out a mortgage of more than $100,000 on his home.
After the accountant quit the job in 2005, lawyer Larry Douglas Friesen discovered more problems, according to the Oklahoma Supreme Court, which lifted an interim suspension for Friesen in a May 26 opinion. The accountant had failed to pay $150,000 in Friesen’s office bills and failed to pay employment taxes for various times beginning in 1999.
That wasn’t Friesen’s only money problem, according to the opinion, which was noted by the Legal Profession Blog. Friesen had once represented members of the Outlaws motorcycle club, which had been under investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The ATF investigated Friesen, a gun enthusiast and former gun dealer, and discovered that the wrong serial number had been recorded for a World War II submachine gun that he had legally purchased.
He was charged and tried for the recording error, which resulted in a mistrial, but the government also discovered another issue. As a gun dealer, Friesen was supposed to keep separate log of guns he purchased for himself from the ones his business owned. One gun he legally purchased for himself was not on his personal log. By the time Friesen pleaded guilty to the second charge, a misdemeanor, in a 2009 plea deal, he had spent $250,000 on legal representation.
After Friesen discovered the accounting problems, Friesen’s lawyer told ethics authorities, Friesen faced a “perfect storm” of financial duress. He had to fight the gun charges and pay overdue office bills to keep his law practice, and he needed to pay the back taxes. He couldn’t afford to do it all so he didn’t begin to made regular tax payments until after the 2009 guilty plea. He was charged in March 2014 with withholding employee taxes but failing to pay the money to the IRS for three quarters in 2007.
Friesen was sentenced in September 2014 to probation and weekend incarceration on the tax charges and ordered to pay nearly $320,000 in restitution and interest. A government sentencing memorandum noted that Friesen had paid $35,000 to remodel his home and office while failing to pay taxes.
He paid $110,000 of the restitution amount before pleading guilty and paid another $130,000 towards state and federal taxes. He was placed on interim suspension in 2014.
The Oklahoma Supreme Court noted that Friesen took responsibility and expressed remorse for his actions. Friesen admitted he was lackadaisical and said he “was enjoying the practice of law but was not taking care of the business of law,” according to the opinion.
In lifting the suspension, the Oklahoma Supreme Court said it was reserving the right to revisit the decision if Friesen violates his probation in the tax case. “We believe the respondent’s lesson from failing to pay his tax obligations will deter other attorneys from following that path,” the court said.
