Fast little loans
A former client of personal injury lawyers Ronald Bobroff and his son, Darren, who believes she was overcharged by the pair, has lodged a court application to have the attorneys struck off the roll.
And her application contains damning allegations that suggest the Bobroffs may have been cashing cheques made out to road accident victims for themselves, not recording the fees their practice charged, and committing income and value-added tax (VAT) contraventions.
Johannesburg-based Bobroff & Partners have helped large numbers of accident victims to claim compensation from the Road Accident Fund (RAF) and typically work on a no-win, no-fee (contingency) basis.
Jennifer Graham, the wife of an accident victim for whom the Bobroffs acted, initially laid a compliant with the Law Society of the Northern Provinces in June last year, claiming that Ronald Bobroff & Partners had massively over-reached (overcharged) on her husband’s account.
Graham’s husband, Matthew, suffered brain injuries after an accident in 2006, and Bobroff & Partners obtained a settlement of R1.9 million and costs of R300 000 from the RAF for him.
Graham engaged Bobroff on the basis that she would pay 30 percent of any award the RAF paid out.
However, the couple received only R1.1 million. The Bobroffs kept the remaining 40 percent, or R1.1 million, in lieu of legal fees and fees for doctors, advocates and other professionals they claimed were used to obtain the settlement.
In her application to the Gauteng North High Court last month, Graham says the Law Society has yet to hold a disciplinary hearing, and her lawyer, George van Niekerk of Edward Nathan Sonnenbergs, is of the view that the Bobroffs may block a hearing indefinitely (see “Law Society yet to take action”, below).
Discovery Holdings is paying Van Niekerk’s legal fees. The Grahams’ belong to Discovery Health Medical Scheme, which sought to recoup the medical expenses that Graham’s husband recovered from the RAF. Discovery has concerns about the Bobroffs’ practices in this case and other similar cases.
Graham and her lawyer say that in August they provided the Law Society with a report by a leading forensic chartered accountant who reviewed Bobroff & Partners’ ledger accounts for the Grahams’ case, as well as those for another client of the Bobroffs, Jean de la Guerre.
De la Guerre also had a contingency fee agreement for 30 percent of the award and received R1.5 million from Bobroff & Partners after the RAF paid out R2.5 million. She has lodged a court application to recover more of her settlement from the Bobroffs.
The forensic accountant, Vincent Faris, says he found evidence in the records of the Graham and the De la Guerre cases of contraventions of the Income Tax Act, the VAT Act, the Companies Act, the Attorneys Act and the rules of the Law Society.
In his affidavit, which forms part of Graham’s application, Faris says the transactions recorded in Bobroff & Partners’ ledger do not agree with the statements of account given to the Grahams and De la Guerre.
Faris says no legal fees were recorded in the accounting records of the Graham matter and therefore no VAT was paid on the fees, but a payment of R758 000 was recorded only as having been made to a Bidvest Bank account. This raises the suspicion that the payment of R758 000 was made instead of the fee passing through the law firm’s books, Faris says.
“There has thus been manipulations of the records to avoid ... the payment of income tax and VAT,” he says.
Faris says in his affidavit there is a suggestion that the procedures followed in the accounting of the Graham and the De la Guerre cases were not isolated.
He recommends that the audited financial statements of Bobroff & Partners’ trust accounts be obtained and that the allegedly irregular payments are traced.
Graham and Van Niekerk say in Graham’s court application that despite the fact that they passed this recommendation on to the Law Society, it has not inspected the Bobroffs’ practice.
Further to Faris’s report, Graham includes in her application an affidavit from Bernadine van Wyk, who was the Bobroffs’ bookkeeper until they fired her last month.
Van Wyk made her affidavit as a whistleblower as defined in the Protected Disclosures Act.
Van Wyk says typically a law firm’s bookkeeper would record the legal fees as a payment against the settlement as soon as it was made, but this did not happen at Bobroff & Partners.
She says “fictitious disbursements” were issued for expenses incurred during cases, or cash cheques were drawn for clients and then endorsed to enable the partners to take money out of the practice.
As part of her affidavit, Van Wyk includes a statement of another former bookkeeper at Bobroff & Partners, Christy de Beer, made to Andre van der Merwe, the auditor of the Bobroffs’ trust accounts.
The statement alleges that a cheque for R115 599 was made out to a client, but the cheque was not crossed. The cheque was subsequently endorsed and deposited into Darren Bobroff’s account.
In her affidavit, Van Wyk also alleges that:
* After Van Niekerk asked Ronald Bobroff for the files pertaining to the Graham case and those of other Discovery Health members, Darren Bobroff worked on 70 of the files and manufactured accounts for them. She says she was instructed to pass the relevant ledger entries so that the ledger correlated.
* Bobroff presented “sanitised” financial information to Van Nie-kerk for the cases he investigated, and notes regarding the time the attorneys spent with these members on their cases were “fabricated”.
* The Bobroffs contacted their Discovery Health member clients and offered them additional payments, saying that during a “cleaning up” it had been discovered they had been short paid.
* A payment that Faris noted in his report on the De la Guerre matter for R385 513 to L Berman as a “referral fee” was in fact made to Lisa Berman Bobroff, Darren Bobroff’s wife.
* Before the South African Revenue Service audited the Bobroffs’ practice in July 2012, VAT invoices were “manufactured”.
In response to a list of questions Personal Finance sent to Ronald and Darren Bobroff about the issues raised in the High Court application, Ronald Bobroff replied that he did not personally represent Matthew Graham.
He also launched an attack on Van Wyk’s integrity, and said none of the directors or professional staff of Ronald Bobroff & Partners has ever, during its 38 years in existence, had to face any charges of professional misconduct before the Law Society.
LAW SOCIETY YET TO TAKE ACTION
Jennifer Graham laid a complaint with the Law Society of the Northern Provinces against Ronald and Darren Bobroff in June last year, but in her court application, Graham and her lawyer, George van Niekerk, say the Bobroffs have avoided answering the complaint and failed to allow a proper inspection of the firm’s trust account.
An investigating committee of the Law Society considered the complaint in February this year and recommended 22 charges against the Bobroffs for over-reaching (over-charging), falsifying case file notes and claiming they attended to the Grahams’ case for many more hours than they actually did.
A disciplinary committee was convened, but the Bobroffs obtained a court interdict to stop the Law Society from proceeding.
The Law Society subsequently agreed to convene a new disciplinary committee to meet later this month. But Van Niekerk says he fears that the Bobroffs will continue to use obstructive techniques to delay the hearing and will ultimately argue for a permanent stay of the hearing.
Graham and Van Niekerk say the conduct of the Bobroffs and the Law Society “creates real dangers that unsuspecting members of the public [will] fall prey to unprofessional and dishonest conduct”.