A Florida attorney, his wife and $107,000 that an auditor says was ‘misappropriated’

The trust account of a Jacksonville attorney was overdrawn when it should’ve had about $107,630 owed to two clients from settlements, a Florida Bar auditor says.

Among places that money appears to have gone, according to the auditor: a nail spa, Publix, American Express, Citibank and other credit card companies.

That’s why James Alfred “Al” Stanley begins his emergency suspension on May 26.

Stanley’s been a member of the Florida Bar since 1989. His 10-year discipline record is otherwise clean, although in 2019 he did plead no contest to reckless driving after the charge was reduced from DUI, a first offense.

Stanley did not immediately respond to an email or a phone message from the Miami Herald.

Trust and trust accounts

Bar discipline documents say a bounced trust account check drew the attention of Bar financial investigators to Stanley.

Lawsuit settlement checks go into a law firm’s trust account. Clients receive their money from that account. Checks or cash from a lawyer or law firm’s operating account pay for bills, employees and other day-to-day costs. Law firms cannot cross the money streams. When trust account checks bounce, the bank will alert the Florida Bar.

PNC Bank told the Bar that on Oct. 6, there was an $1,046.14 overdraft on Meyers, Mooney, Meyers, Stanley & Hollingsworth’s trust account. The Bar reached out to Stanley for an explanation and documents to back up that explanation.

Stanley, according to the Bar’s request for emergency suspension, blamed the overdraft on “a clerical error” and “stated that he asked his bookkeeper and office manager to issue a check in the amount of $4,500 to him for fees and for some unknown reason two checks were issued for that same amount.

“[Stanley] advised that he had no knowledge of the transactions as his signature was affixed by a stamp.”

The Bar started a compliance audit on Jan. 9 and requested trust account records and closing statements back to Jan. 1, 2021. Stanley, the Bar claimed, came across with only bank statements and not even all of those requested. In addition to two months of bank statements, also missing were “deposit tickets, canceled checks, journals, ledgers, reconciliations, monthly comparisons, written trust plans, and closing statements.”

A Bar investigator dropped off a subpoena on Feb. 21 “to an individual identifying herself as staff employee Teresa McElwee (believed to be [Stanley’s] wife)“ at Stanley’s office. One of the email addresses turned up in a Herald database search for Teresa Stanley was “tmcelwee@astanleylaw.com.”

Stanley didn’t answer the subpoena. From what he had, Bar auditor Matthew Herdecker created a day-to-day chart of the trust account’s balances from June 1, 2023, through Jan. 31, 2024; the settlement checks from Client 1 and Client 2; the minimum amount the account should’ve had based on those monies; if the account was short and, if so, by how much.

Herdecker’s chart said the account first fell behind on June 20, 2023, and remained so until the end of the chart. The least it was underwater was $30,131.46, from July 7 through July 11. The most it was under was $107,630, from Oct. 6 through Oct. 9, the days after the overdraft.

Settlement checks and balances

Herdecker’s report said Client 1’s $110,000 settlement hit the trust account in August 2022. Hypothesizing a 40% contingency fee giving $44,000 to Stanley, Herdecker said $66,000 of Client 1’s money should’ve been in the account as of June 1.

Client 2’s settlement checks, totaling $70,000, went into the trust account on July 7. Using the same contingency fee calculation, Herdecker theorized that $28,000 was Stanley’s and $44,000 was Client 2’s. The only payment to Client 2 was on July 10 for $370 and that cleared that day.

So, on Oct. 6, the account should’ve had at least Client 1’s $66,000 and Client 2’s $41,630, a total of $107,630. Instead, from Oct. 6 through Oct. 9, it was overdrawn — $0 balance.

After the bounced check, numerous deposits covered the overdraft and built the account back up to $14,108.98 by Dec. 20, when a $4,000 check to Client 1 cleared, according to Herdecker’s chart. Still, the account was $93,521 short.

“The shortage was caused or increased by checks issued from [Stanley’s] trust account and deposited into” two separate bank accounts at PNC Bank and Truist for the benefit of Stanely or his wife, Herdecker wrote.

The PNC Bank personal account, Herdecker said, was for Stanley and “Teresa E. Stanley.” The Truist account was the firm’s operating account, “on which he and his wife appeared to be the only signatories ... ”

Herdecker pointed to two August trust account checks payable to Stanley and worth $4,600 going into the Stanley’s PNC personal checking account when “Stanley did not appear to be entitled to the payments as fees or costs.”

Those deposits into the PNC personal account, Herdecker said, “corrected overdrafts in the account and were spent on payments to American Express, Citicard, Poshmark, Apple Card, The Home Depot, BB Nails & Spa, Publix, and Capital One.”

(A check of Google Maps and St. Johns County Property Records say there’s a BB Nails location less than 1.9 miles from the Stanley’s 3,899 sq. ft. Ponte Vedra Beach house.)

Also in August, Herdecker said, four trust account checks payable to Stanley and totaling $19,000 “that didn’t appear to be payments for fees or costs” went into the operating account.

“The funds from the trust account corrected an overdraft in the Truist Bank operating account and also were used for payments to Poshmark, individuals for payroll, tax payments to the Internal Revenue Service, Comcast, a bookkeeping service, Amazon, and Atlantic Self Storage,” Herdecker wrote.