The Law Society of the Northern Provinces (LSNP) last week filed a damning forensic audit report in the Pretoria High Court, following a recent intensive investigation into the business practices of Gauteng personal injury law firm Ronald Bobroff & Partners (RBP). The affidavit and report – by two chartered accountants – form part of on-going litigation, in which road accident victim Matthew Graham and his wife Jennifer allege that RBP overcharged them and in which they have been asking for an accounting from the Bobroffs for almost five years.
The affidavit alleges, “The Bobroffs’ trust banking account lost its identity” and the report concludes by saying that RBP “does pose a risk to trust creditors of the firm”.
Attorneys have a business account for their own money and a trust account for their clients’ money. The Attorneys Fidelity Fund insures money in the latter and the most grievous professional sin that an attorney can commit is to confuse his clients’ money with his own.
The affidavit and the 136-page report detail extensive breaches of the Attorneys Act and rules by RBP and its directors, as well as the massive overcharging of road accident and medical negligence victims, false bookkeeping entries, theft of client funds, tax evasion and VAT fraud. Ronald Bobroff and his son, Darren, are named in the report as is director Stephen Bezuidenhout.
- The Bobroffs employed various tactics to unlawfully reduce [their] income tax and VAT liabilities.”
- The Bobroffs failed to ensure that trust monies were kept separate from other monies.”
- The Bobroffs failed to ensure that, when making a transfer from their trust banking account to their business banking account, that the amount transferred was identifiable and did not exceed the amount due to the firm.”
- The Bobroffs failed to ensure that withdrawals from their trust banking account were made only to or for or on behalf of trust creditors of the firm or as transfers to their business bank account in respect of fees or disbursements due to the firm.”
- The Bobroffs failed to pay amounts due to clients within a reasonable time.”
- The Bobroffs failed to pay the reasonable fees and disbursements of other practitioners, medical practitioners and other experts within a reasonable time.”
- The Bobroffs made themselves guilty of unprofessional, dishonourable or unworthy conduct by overreaching clients.”
- The Bobroffs failed to retain their accounting records for a period of five years.”
Blame the bookkeeper
The Bobroffs claim that a vendetta is being waged against them and have laid blame at the feet of all and sundry including their former bookkeeper, Bernadine van Wyk, who, in 2012, deposed to an explosive affidavit detailing wrongdoing by the Bobroffs and RBP.
Ronald Bobroff told the LSNP auditors that it was Van Wyk who told him to hide their own money in the firm’s trust account. The auditors noted: “It would also seem unusual that the directors of the firm, whom have a substantial amount of experience in running a practice and administering a trust account, would merely rely and act on the advice of their bookkeeper whom is not a tax specialist.”
Overcharging of clients
In every client file scrutinised by the auditors, overcharging by RBP was revealed. The report says that the Bobroffs had entered into multiple fee agreements with clients. There would usually be three agreements signed with each client. One would be the unlawful common law contingency fee agreement. Another would be a mandate in terms of which client would be charged on an hourly basis. The third would be the agreement in terms of the Contingency Fees Act (CFA). The first two agreements would be used by the Bobroffs to ‘reverse engineer’ the firms fees so that the hourly fees, when added up, would equal the 30% that firm was to take as its contingency fee. The CFA was presented to a Judge when a settlement agreement with the Road Accident Fund or medical negligence insurer was made an order of court so that the judge would believe that the firm had complied with the law relating to contingency fees when it had not.
The report names two whistleblowers who made disclosures in terms of the Protected Disclosures Act. The affidavits and disclosures of Berndaine van Wyk and Cora van der Merwe feature prominently in the report and are corroborated by the auditors.
Van der Merwe came to Moneyweb to blow the whistle on the Bobroffs.
Moneyweb sent the LSNP affidavit and report to Van Wyk and Van der Merwe who issued a joint statement in which they said that although they had to endure public disparagement by the Bobroffs, they had done the right thing and had now been vindicated by the LSNP audit team. Both expressed disappointment at the rest of the staff at RBP who knew what was going on but were not prepared to say or do anything about it.
One of the former RBP clients that Moneyweb tried to track two years ago is Filipe Pombo. His matter features in Van Wyk’s affidavit and in the report. We alleged that Darren Bobroff had forged his father’s signature on an RBP cheque made out to “F Pombo” for R115 600. The Bobroffs denied this.
The report confirms Moneyweb’s conclusion at the time: “The inspectors’ view is that the depositing of the abovementioned cheque into Darren Bobroff’s personal account was intentional. The monies due to Pombo were only repaid to him two years later. This does not negate the initial misappropriation of Pombo’s monies.”
The Grahams attorney, George van Niekerk, told Moneyweb: “We are vindicated at last by the findings of the inspectors into the Bobroff practice. It shows that the Bobroffs are not fit to practice and should be struck from the Roll of Attorneys.”
The Attorneys Fidelity Fund told Moneyweb that it was monitoring developments in the Bobroff matter and taking legal advice. “We are unable to provide further information at this stage.”
The Bobroffs had not commented at the time of publication.
The matter will be argued in the Pretoria High Court from March 14-16.