John Dunlea, who was fired from his CFO role last year at one of New Jersey’s largest law firms for giving himself unapproved compensation bumps, pleaded guilty in New Jersey state court last week to two counts of second-degree theft by deception and five counts of third-degree evasion of state income taxes.
On top of the $1,538,221 he illegally paid himself over five years, according to his plea, he also charged tens of thousands of dollars in first-class airline tickets and luxury resorts around the world for him and his family.
The case began in a civil suit filed by the firm last year, which accused Dunlea of misappropriating over $3.2 million going back 10 years. It was in the filing of this case that the state stepped in and pursued criminal charges against Dunlea.
Dunlea’s wife Nicole Alexander, who was also employed at the firm as director of legal recruiting, said she had no involvement or idea about her husband's embezzlement. Although she lost her bid to obtain the firm’s payroll and credit card information earlier this year in a suit of her own, she has denied any wrongdoing on this matter.
Alexander has not been charged by the state for any crime. Her countersuit claims she had knowledge of about $700,000 per year in income between her and her husband from the firm, a side business that was pre-approved, and a “substantial inheritance” she received in 2017.
She claims she was not only unaware of her husband’s embezzlement but that he was also still paying alimony to his ex-wife. The two had separate bank accounts, other than one joint account for mortgage payments. Their home has now become a restitution target for the firm, according to Law360.
“This case involves the aggressive and relentless victimization of a woman, merely because of who she is married to and because of the perceived inappropriate lifestyle as judged by this misogynistic law firm,” Alexander’s amended countersuit said.
Dunlea is due in court for sentencing on June 14. In his plea agreement, the state will recommend five years in state prison and restitution be paid to the law firm.
Financial controls failure
According to court filings, one of Dunlea’s responsibilities as CFO was managing and overseeing the firm’s wage and salary payment processes. This also included the paying and accounting for salary increases and bonus payouts.
It appears as if Dunlea was able to pay himself more than he was allotted for a significant amount of time, while also being able to control visibility on how corporate credit cards — like the ones he used to charge his luxurious trips — were being spent.
Dunlea’s lawyer, Ricardo Solano Jr. of Gibbons, called it a difficult day for “a highly successful professional and caring family man, who made a terrible decision that he regrets and for which he will pay for the rest of his life.”