Trustee alleges law firm’s credit card used for family vacations, Disney World
By Peter Vieth
The Daily Record Newswire
RICHMOND, VA — A veteran Richmond area bankruptcy lawyer – suspended last year for mishandling client money – now has been disbarred amid allegations that she drained her law office bank accounts and snatched office equipment to avoid creditors.
Nnika E. White has practiced in Richmond’s U.S. Bankruptcy Court for more than 10 years. Records show she has handled more than 1,900 cases. Her husband, Mark, worked at her Midlothian law firm and handled office computer systems, according to court documents.
The Chesterfield County couple has two minor children, court records show.
The U.S. Bankruptcy Trustee is now seeking the couple’s assets to satisfy creditors.
VSB first to act
White came under scrutiny from the Virginia State Bar last year after a bankruptcy client asked her to handle $50,074 in inheritance money. White allegedly paid herself $33,490 from the money, saying it covered fees for years of legal work. Bar prosecutors questioned the claim.
Bar prosecutors alleged White had commingled client money with office accounts since 2004 and failed to maintain proper bookkeeping records. Her trust account had been set up to provide overdraft protection for her operating account and was used for that purpose 138 times in 2013 and 2014, the bar said.
The VSB suspended White for three years in December.
The VSB findings triggered review by the U.S. Trustee’s Office. The Whites filed for reorganization, but the trustee’s office opposed five successive Chapter 13 plans. The trustee’s lawyers said White and her husband “significantly understated their income.”
Moreover, the trustee claimed the Whites used her law firm’s accounts to make “thousands of dollars in personal purchases without treating those purchases as personal income.”
The law firm’s credit card was used for family vacations in Honolulu, San Diego, Myrtle Beach and Williamsburg, the trustee alleged. The White family spent more than $200,000 in law firm money in a year’s time, the trustee alleged.
The family spent hundreds with a law firm credit card for a Disney World family vacation in November, just after White’s license was suspended, the trustee said.
Judge finds abuse
In December, a bankruptcy judge said the Whites “gamed the system” and “hijacked the bankruptcy process to the detriment of their creditors.”
“The Court finds that White, who was until recently a longstanding member of the Bar of this Court, used her familiarity with the Chapter 13 bankruptcy process to manipulate the system …,” wrote Judge Kevin R. Huennekens.
The judge’s opinion is In re: White (VLW 016-4-004).
The judge converted the Whites’ bankruptcy case from a Chapter 13 reorganization to a Chapter 7 liquidation. Later, the judge allowed the trustee to put White’s law firm into Chapter 7, as well.
Office stripped, bank accounts emptied
When Richmond lawyer Lynn L. Tavenner – acting as trustee – arrived with a locksmith at White’s law office on Dec. 4, the office had been “raided” and picked clean of most items of value, according to Tavenner’s sworn statement filed in bankruptcy court.
The locksmith allegedly spotted White and her husband carrying items from White’s law office.
“[C]omputers were either missing or left on the floor with parts displaced and in some instances hard drives removed; desks were emptied of all supplies; one office server was missing; at least one office safe had been removed; certain physical client files had been removed from the Corporate Offices; televisions had been removed from the walls…,” Tavenner wrote.
Information related to one client’s case had been left behind, but the trustee contended the Whites “willfully and maliciously systematically attempted to cover their tracks by removing the entirety of the Corporate Property.”
A trip to White’s bank confirmed that each account of the law firm had been drained of all funds and closed on Dec. 2, the trustee said.
In a court pleading, White said the missing client files and client information were not property of the bankruptcy estate and she was obligated to preserve and deliver them to the former clients or to their new lawyers.
White failed to appear April 22 before a VSB Disciplinary Board panel considering charges that White had neglected to advise clients that her license was suspended.
The board heard from Tavenner, who reportedly testified that White’s office had been found in “complete disarray” with client files remaining in no apparent order.
Six former clients swore they had heard nothing from White since her suspension and received no refunds, the board said.
The VSB Disciplinary Board revoked White’s license, effective that day.
White allegedly cited the Fifth Amendment when asked last month about her firm’s tax returns and the location of its books and records. The trustee’s office has asked the bankruptcy court to deny a discharge of debts for the Whites.
The Whites agreed June 4 to turn over all law firm property in their control and agreed to be barred from any action adverse to the firm’s clients.
White is represented in the bankruptcy actions by McLean attorney Daniel M. Press, who did not immediately respond to a request for comment.
The White firm’s website advises that the “Law Office of White and Associates is no longer open for business.” The website gives a phone number – 804-274-9002 – for questions.
Buehler also disbarred
Another lawyer was disbarred after an April 22 hearing over allegations that he failed to follow up with clients after a VSB suspension.
David P. Buehler, now of New Orleans, essentially ignored the bar after a 2014 suspension for dropping the ball on a business client, bar prosecutors alleged. The terms of the six-month suspension called for the attorney to notify clients and arrange for transfer of cases.
Buehler never provided proof of compliance to the bar, the VSB said. He reportedly left a client hanging in a civil case in Richmond Circuit Court.
Buehler also was a no-show at the April VSB hearing. The Disciplinary Board revoked his license, effective that day.
Buehler was disbarred in Maryland last year for a “pattern of misconduct” that included the allegations of neglecting his Virginia client.
