Howard County’s chief public defender, Steve Raquet, is facing possible discipline from the Indiana Supreme Court in a case involving mismanaged funds and a bookkeeper who state officials say took advantage of Raquet’s lack of oversight.
Raquet – a former partner in Raquet, Vandenbosch & Steele who is now "of counsel" to the firm – was the focus of a disciplinary complaint filed this spring by the Supreme Court’s Disciplinary Commission. It is his second foray in front of the commission following a more than decade-old case involving child pornography.
This spring’s complaint, filed April 24, details a series of checks cashed in Raquet’s Interest on Lawyers Trust Account (IOLTA) at Salin Bank. The checks were cashed in fall 2017 and resulted in continuous overdrafts.
The state describes IOLTA accounts as “bank accounts into which an attorney or firm deposits client funds that either are so small in amount, or will be held for such a short amount of time, that they will not earn interest income sufficient to cover the costs incurred to secure such income.
“Interest earned on IOLTA accounts is paid to the Indiana Bar Foundation to support pro bono legal aid and other public services.”
In November 2017, the Disciplinary Commission sent notices of the overdrafts to Raquet and “demanded a documented explanation for the series of overdrafts” to the trust account.
The commission is an agency of the Indiana Supreme Court that is responsible for investigating and prosecuting claims of misconduct against Indiana lawyers. Indiana Supreme Court justices, however, have exclusive power to act against a lawyer’s license, according to the state’s website.
Raquet could not be reached for comment but told the Kokomo Perspective in a story earlier this week the complaint is “a very unfortunate situation, and the matter I have with the Supreme Court is going to be concluded by agreement in the very near future.”
Howard County public defender board member DJ Bolinger did not return a request for comment.
Court records show Raquet, represented in the case by Indianapolis lawyer Margaret Christensen, filed a motion for extension of time on May 21. It is the most recent movement in the case. A hearing officer, who manages the case, was appointed in late April.
Raquet responded to the commission the same month as its notices, according to the complaint, admitting that a bank employee had told him the account was overdrawn.
He said his wife, Paula Raquet, had been responsible for the trust account’s bookkeeping duties until the end of 2016, when she retired.
The bookkeeping was then reassigned to another employee of the law firm.
Raquet told the commission that after receiving notice about the overdrafts, he and his wife reviewed every entry in the law firm’s books, including checks written from the trust account.
The review showed that throughout 2017 multiple deposits had been placed into incorrect accounts, including the law firm’s general account and other attorneys’ trust accounts.
Raquet told the commission that the employee responsible for the incorrect deposits had been placed on administrative leave pending further review by a certified public accountant.
A CPA later found, in part, that funds were not property deposited to Raquet’s trust account and that some funds were deposited to accounts belonging to other attorneys.
Meanwhile, “some of the cash receipts from clients were not deposited to any bank accounts at all,” according to the complaint, which refers to the actions as “bookkeeper errors and theft” that led to improper disbursements of money and deposits that never happened.
The bookkeeper who replaced Raquet’s wife and was handling his trust account was later identified as Kimberly Jackson.
Jackson's responsibilities, starting Jan. 2, 2017, included “creating deposit tickets and depositing money into [Raquet’s] trust account, other attorneys’ trust accounts, and a general operating account … of the firm,” along with a monthly spreadsheet with financial information pertinent to Raquet and his trust account.
Raquet, notes the complaint, did not review deposits before they were made and did not review Jackson’s monthly spreadsheets other than to confirm the account’s total remaining amount was the same as shown on his bank statement.
Raquet, in his initial responses to the commission, acknowledged that Jackson misled him by pocketing “cash receipts from clients, but had entered those receipts in [his] accounting ledgers as if they had been properly deposited in his attorney trust account.”
Jackson also deposited checks that should have been going into Raquet’s trust account into the trust accounts of other attorneys.
“Jackson had presumably orchestrated a scheme to ‘misdirect deposits [in] an effort to avoid an overdraft in the other accounts, from which she was siphoning funds,” notes the complaint.
Jackson was charged by the Howard County prosecutor’s office in January 2018 with one count of theft, a Level 5 felony, and seven counts or forgeries, Level 6 felonies.
Court records show Jackson pleaded guilty in late April in Howard Circuit Court to felony theft and one count of felony forgery and was given three years of supervised probation. The remaining counts were dismissed.
Evidence submitted at a court hearing showed Jackson illegally took $58,851 belonging to Raquet, Vandenbosch & Steele. She was ordered to pay restitution.
But the Jackson fiasco has now come back to haunt Raquet in a new way.
The disciplinary complaint states Raquet “admitted that he is responsible for Jackson’s mismanagement of his trust account” and that “he probably did not supervise Jackson regarding his trust account.”
Raquet also learned during the CPA’s investigation that he had held earned funds of more than $5,000 in his trust account, along with client funds, that had not been disbursed from the account over numerous years.
Raquet’s internal policy, states the complaint, was to deposit both client funds and his own earned funds into his trust account. The Indiana Judicial Branch, however, notes on its website that lawyers are required to maintain client and third-party funds separate from their own funds.
The five disciplinary charges filed against Raquet include his failing “to deposit all funds held in trust in accounts clearly identified as ‘trust’ or ‘escrow’ accounts,” a violation of a state rule.
The complaint alleges Raquet also failed to deposit all receipts into his trust account intact, anther rule violation, while also failing to hold client or third-party property separate from his own property, a professional conduct violation.
The complaint, meanwhile, cites another professional conduct violation against Raquet for keeping “more of his own funds in the trust account than necessary to be reasonably sufficient to maintain a nominal balance.”
It slaps Raquet with a third professional conduct violation for failing to “make reasonable efforts to ensure that Jackson’s conduct was compatible” with his own professional obligations since he had direct authority over her.
The complaint ends by saying Indiana Supreme Court Disciplinary Commission Executive Director Michael Witte “prays that [Raquet] be disciplined as warranted for professional misconduct” while also being ordered by the court to pay expenses related to the case’s investigation, hearing and review procedures.
Raquet, in 2007, received a 30-day law practice suspension imposed by the Indiana Supreme Court for a case involving child pornography. That case is cited on the first page of the April complaint and could be used as a possible aggravating factor.
Court documents show for around three months in 2001 Raquet viewed child pornography on the Internet, printed photographs and paid an unknown online provider for the illicit material.
The documents note that Raquet later stopped viewing child pornography and in December 2002 began receiving counseling.
Electronic evidence of Raquet’s conduct, however, eventually became known to federal authorities, causing Raquet to obtain counsel and begin cooperating with investigators.
In March 2004, Raquet was charged in state court with possession of child pornography, a Class A misdemeanor, and by May 2004 had entered into a pretrial diversion agreement with the court. In June 2005, Raquet successfully completed the diversion program and his case was dismissed.
The Disciplinary Commission then filed a verified complaint against Raquet “based on his conduct involving child pornography.”
The Supreme Court ultimately ruled that Raquet’s conduct furthered “the sexual exploitation of children” and that it called “for sterner discipline than a reprimand.”
Still, the court decided to eschew the precedent of a two-year suspension following child-pornography-related misconduct after finding there were “substantial mitigating factors” in the case, citing the fact Raquet’s “encounter with child pornography was brief” and occurred six years prior.
The Supreme Court also credited Raquet for seeking professional help, cooperating with investigators and admitting his misconduct, which the court called “the only blot on his legal career” since his law career began in 1983.